The CEO of Theranos has been banned from operating labs for 2 years
Theranos has been the subject of high-profile media coverage about the effectiveness of its blood-testing methods. Its flagship product is a finger-prick blood test, but reports claimed that the test didn't produce accurate results.
Controversy over the effectiveness of Theranos' tests caused its main retail partner, US chain Walgreens, to end its relationship with the company.
Now CEO Elizabeth Holmes is coming under investigation by federal health regulators. The Wall Street Journal reports that Holmes has been hit with a two-year ban from operating a lab that test blood samples, and also a fine. Theranos' lab in California has also had its approval revoked. These sanctions won't stop Theranos from operating, but it's a major blow to the company that does nothing to improve its public image.
Theranos issued the following statement to The Wall Street Journal about the regulators' decision:
"We accept full responsibility for the issues at our laboratory in Newark, California, and have already worked to undertake comprehensive remedial actions. Those actions include shutting down and subsequently rebuilding the Newark lab from the ground up, rebuilding quality systems, adding highly experienced leadership, personnel and experts, and implementing enhanced quality and training procedures.
While we are disappointed by CMS' decision, we take these matters very seriously and are committed to fully resolving all outstanding issues with CMS and to demonstrating our dedication to the highest standards of quality and compliance."