Theranos’ Elizabeth Holmes banned from running labs for 2 years

Theranos’ Elizabeth Holmes banned from running labs for 2 years
Credit: Krista Kennell /

Over the past eight months, Theranos has been in the news for all the wrong reasons. The medical company claimed to be able to deliver accurate test results from just a single drop of blood, but it was discovered that it voided results from tests conducted in 2014 and 2015. Last month, Forbes revised founder Elizabeth Holmes’ net worth from $4.5 billion to zero.

Now, Centers for Medicare & Medicaid Services (CMS) has imposed sanctions on Theranos’ Newark, California laboratory and CEO Holmes following its 2015 survey.

The Newark facility will have its Clinical Laboratory Improvement Amendments (CLIA) certificate revoked, and Holmes has been barred from operating labs for the next two years.

In addition, the company will have to pay a monetary penalty of unspecified value and the lab’s approval to receive Medicare and Medicaid payments for all laboratory services will be canceled.

That’s a serious blow to Theranos, whose reputation has already taken a tremendous beating over the past year. Just last month, drugstore chain Walgreens ended a partnership with the company to offer blood tests in its outlets, as health regulators geared up to impose sanctions on Theranos; it previously decided to stop working with the Newark lab in January.

Theranos’ Newark lab won’t have its certificate revoked for the next 60 days, but it will cease patient testing during that period and work with CMS to resolve issues with its processes. Meanwhile, the company will continue to run its services through its Arizona lab.

Holmes said:

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.

The story of the CEO’s troubled journey in creating a multi-billion dollar healthcare business is reportedly being made into a film, with Jennifer Lawrence set to portray Holmes in the Adam McKay-directed drama.

Theranos Receives Notice of Sanctions from the Centers for Medicare & Medicaid Services on Theranos

Read next: Reddit now tracks when you visit external links, but you can opt out