Theranos inks Medicaid deal and snags CLIA waiver to expand Dx reach

Theranos CEO Elizabeth Holmes

Theranos has been on a roll lately, scoring FDA approval last week for its finger-stick herpes test and striking its first deal to provide its tests for a private insurer, making its products available to Capital BlueCross of Pennsylvania's 1 million members. And the company is continuing in the same vein, teaming up with a managed care provider to offer its tests to Medicaid patients and snagging a CLIA waiver from the FDA for its herpes testing system.

Palo Alto, CA-based Theranos will work with AmeriHealth Caritas to provide its tests to low-income populations in the U.S. AmeriHealth operates in 16 states and DC and serves more than 6.6 million members, including individuals on Medicaid. The deal will allow Theranos to "bring groundbreaking health care technology to disadvantaged individuals and underserved communities who typically do not have access to these health care advancements," the company said in a statement. Theranos bills its finger stick tests as superior to traditional lab tests, as the products don't require large needles or vials of blood and come with shorter processing times.

"Over 40 percent of lab test orders don't get filled because testing services are inconvenient or cost too much. Improved access is the best way to help save lives, because access to information puts the focus on earlier detection and prevention instead of diagnosis and treatment," Theranos CEO Elizabeth Holmes said in a statement. "AmeriHealth Caritas has lived this mission of serving Medicaid for more than a quarter of a century. … We are proud to be able to partner with them in this important work."

Theranos also notched another win this week after the FDA handed it a CLIA waiver for its recently approved herpes simplex 1 virus IgG (HSV-1) testing system. The agency based its decision on a review of "extensive data" showing that the company's test works just as well in the field with nonlab workers as it does in a traditional lab with trained clinicians, Theranos said in a statement. The waiver could help expand the company's geographical reach, as it strives to make its tests available in a variety of settings. Theranos already operates its technology through its Wellness Centers in Arizona, California and Pennsylvania, and also offers its tests at Walgreens ($WAG) stores in Arizona and California through a partnership with Walgreens Boots Alliance.

Meanwhile, Theranos is working hard to distinguish itself from the pack. The company, which is already valued at $10 billion, is looking to replace business models laid out by industry heavyweights such as LabCorp ($LH) and Quest Diagnostics ($DGX). To do that, it's making transparency the name of its game, claiming to be the first diagnostics lab to publish all its pricing. Theranos is also planning to submit all its tests to the FDA for review--something that other lab companies have yet to accomplish, Holmes told Bloomberg.

"They haven't filed any of their lab tests with the FDA, and we're trying to create a model with the FDA being the gold standard," Holmes said.

- here's Theranos' statement
- read more about Theranos' CLIA waiver

Special Report: Top women in medical devices 2014 - Elizabeth Holmes, Theranos