WSJ: How Theranos Put Patients in 'Immediate Jeopardy'

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Theranos founder and CEO Elizabeth Holmes at the Fortune Global Forum, November 2015. ( Stuart Isett/Fortune Global Forum)

On Jan. 25, the Centers for Medicare & Medicaid released a letter it sent to the blood-test startup Theranos, informing the company an inspection of its Newark, California lab had found it to be deficient in five areas. CMS said  deficiencies in one of those areas -- hematology -- put patients in "immediate jeopardy," which is defined by the agency as a situation likely to cause "serious injury or harm, or death" to patients.

Sounded serious, to say the least. But what CMS did not release are the actual problems it found in the lab that caused it to reach such a dire conclusion. Those were detailed on Form CMS-2567, called a Statement of Deficiencies. When we asked CMS for that, a spokesperson would only say the form would become "releasable" after Theranos' plan of correction was approved.

Well, The Wall Street Journal, which has just about single-handedly extinguished the hype around Theranos as a "disruptor" of the blood-test industry, has talked to "people familiar with the report."

Those sources said CMS found that Theranos "ran an important blood test on 81 patients in a six-month period despite erratic results from quality-control checks meant to ensure the test’s accuracy," the Journal said.

The test, called the prothrombin time test, measures how long it takes blood to clot. Inaccurate results "can be especially serious for patients taking blood thinners such as warfarin" (better known as Coumadin), the paper said.


Any doctors who received results from tests conducted between April 23 and Sept. 15, 2015, when the quality control problems emerged, should have patients retested as soon as possible," one academic in laboratory medicine told the Journal. “Those results are not worth anything,” said Timothy Hamill,  professor emeritus at the University of California, San Francisco.

In response to the Journal report, Theranos released a statement in which it said it had contacted "any potentially affected patients." Dr. Kingshuk Das, the new director of the lab, said: "We have conducted assessments to identify any patients affected or having the potential to be affected by the issues identified by CMS, and we have no reason to believe that these issues have affected patients’ health.”

Report Held

News of these details raise the question of why CMS didn't release them in the first place?

"The company has asked CMS not to publicly release the inspection report on the grounds that doing so would compromise Theranos trade secrets, according to people familiar with the company's position," wrote the Journal.

Meanwhile, Theranos watchers are waiting for the other shoe to drop regarding its partnership with Walgreen's. Last week, The Financial Times reported the drug store chain is looking for a legal way out of its contract with Theranos.

Also last week: 32-year-old Theranos founder Elizabeth Holmes backed out of speaking at a conference on the future of genomic medicine. Why, we don't know.

You can read the entire Wall Street Journal report below. And if you want to see Wall Street Journal reporter John Carreyrou give the inside story of his Theranos reporting, here he is in an extensive, wide-ranging interview on Feb. 4.