WSJ: Inspection report details problems at Theranos' Arizona lab

Elizabeth Holmes
Theranos failed to comply with its own policies and procedures while operating its Arizona lab, according to a federal inspection report obtained by The Wall Street Journal.

Last month, it came out that Theranos was hiding results from a federal inspection of its Arizona lab from patients and investors. Now, an inspection report obtained by The Wall Street Journal details the lab’s failings, which include performing tests on incorrectly configured equipment and not meeting its own quality-control policies.

Additionally, the company did not ensure that some patients who received potentially incorrect diabetes results were told, the WSJ reported. The Arizona lab was inspected in September.

In May 2016, Theranos threw out two years’ worth of blood test results and corrected or voided tens of thousands of other test reports. But a month later, the company reversed itself, saying that corrections had been made out of “an abundance of caution.”

The report also showed that Theranos “repeatedly violated” manufacturer’s instructions for lab equipment as well as its own procedures, the WSJ said.

Theranos has been trying to right its ship since WSJ reports raised concerns about the company’s proprietary blood-testing tech in the fall of 2015. In October 2016, it abandoned its original mission entirely to focus on developing a tabletop blood sample processor, closing labs and Theranos Wellness Centers in California, Arizona and Pennsylvania in the process. But problems still plague the Silicon Valley company.

Walgreens, an early validator of the fingerprick tests, exited its partnership with Theranos last summer and then filed a suit for breach of contract. The drugstore giant is seeking $140 million in damages to match its investment in Theranos.

Meanwhile, Theranos is appealing sanctions handed down by the Centers for Medicare and Medicaid Services, which include banning CEO Elizabeth Holmes from owning or operating a lab for two years. The sanctions came after an inspection of the company’s Newark, CA lab turned up major deficiencies.