Founder and CEO of Theranos, Elizabeth Holmes, at TEDMED 2014. (credit: TEDMED)
After investigations revealed major problems at its blood-testing lab in California, the high-profile medical startup Theranos is in deep water with the Centers for Medicare and Medicaid Services (CMS). As Ars has reported before, the company faces sanctions, including losing its approval to test human samples.
But, according to a Wednesday report in The Wall Street Journal, the sanctions may also include banning Theranos' CEO and founder, Elizabeth Holmes, and its president, Sunny Balwani, from owning or running any lab for at least two years. The potential ban was mentioned in a letter dated March 18 from the CMS to Theranos. The letter has not been publicly disclosed, but WSJ reporters viewed it.
According to those reporters’ sources, Theranos had 10 days to respond, which it did. The CMS is now looking over its response. If the agency is still displeased with Theranos’ performance, the revocation of its approval to test blood samples and the ban could go into effect within 60 days. Theranos could still appeal the decision, the WSJ noted, but appeals rarely succeed. Between 2001 and the end of 2010, the CMS did not lose a single such case.
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