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Theranos agrees to 2-year blood testing ban

April 18, 2017

Theranos Inc. pledged to stay out of the blood-testing business for at least two years in exchange for reduced penalties from federal health authorities, the company said, in an agreement that resolves a year-long regulatory impasse.

The main lab regulator first had proposed barring Theranos founder Elizabeth Holmes from the medical lab business for two years in March 2016 after the company failed to correct testing problems at its main lab in Newark, Calif., ones inspectors earlier had said put patients in “immediate jeopardy.”

The development removes a major overhang for the troubled Silicon Valley startup. But Theranos continues to face other challenges, including criminal and civil investigations examining whether it has misled investors, lawsuits by from several investors saying they were duped, and claims from patients saying they received inaccurate test results. Theranos is fighting the suits and cooperating with the probes.

Theranos already had made major changes in the face of regulators scrutiny. After CMS completed its proposed sanctions in July, the company began to shift its focus to a business strategy that involves developing laboratory devices to sell to third parties, rather than doing tests itself.


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