Please create an account to participate in the Slashdot moderation system

 



Forgot your password?
typodupeerror
Biotech Businesses Medicine News Science Technology

Theranos CEO Elizabeth Holmes Banned From Owning a Lab (engadget.com) 146

An anonymous reader quotes a report from Engadget: The Wall Street Journal reports U.S. regulators have devised to ban the owners and operators of Theranos from running a lab for two years. That includes CEO and founder Elizabeth Holmes, as confirmed by a press release issued tonight. The Centers for Medicare and Medicaid Services (CMS) revoked the lab's Clinical Laboratory Improvement Amendments (CLIA) certificate and imposed a civil money penalty for an unspecified amount. The ban does not take effect for 60 days, however Theranos says it will not do any testing at the Newark, CA lab CMS investigated, and instead will serve customers from its lab in Arizona. Elizabeth Holmes wrote: "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."
This discussion has been archived. No new comments can be posted.

Theranos CEO Elizabeth Holmes Banned From Owning a Lab

Comments Filter:
  • by Anonymous Coward on Friday July 08, 2016 @05:09AM (#52469517)

    Take THAT, Elizabeth Holmes

  • But this is a problem I believe the markets and courts actually could handle.

    • by vadim_t ( 324782 ) on Friday July 08, 2016 @05:33AM (#52469569) Homepage

      The vast majority of people, even the really smart ones working for the justice system aren't expert biologists able to evaluate the quality of a lab's work. Neither would they be granted enough access to actually run a proper evaluation, even if they did have the knowledge.

      And what's the benefit to allowing a lab that produces incorrect results to keep operating?

      We need both. Regulation ensures that every lab performs correctly, and the free market ensures the labs compete against each other on the price and services they offer. With both those things in place and working properly we can ensure you can't go wrong by choosing a lab, and just have to concentrate on finding one that does what you need at an acceptable price and speed.

      • by advocate_one ( 662832 ) on Friday July 08, 2016 @05:36AM (#52469585)

        Regulation ensures that every lab performs correctly

        Not just regulation, but an inspection and certification regime as well. Random, unannounced inspections work best of all...

        • While the traditional "Hi, I'm here to inspect your lab (surprise!!!)" approach does have some merit, in this case I think that more effective regulation could come from sending test samples to multiple competing labs and checking for agreement. Some of these test samples could be "announced" but, of course more effective regulation would come from "stealth" samples that look like regular daily work. This is the kind of result that should be collected, investigated to explain discrepancies, and published

        • by Spazztastic ( 814296 ) <spazztastic@gmail . c om> on Friday July 08, 2016 @10:42AM (#52471331)

          > Random, unannounced inspections work best of all...

          The FDA does this regularly, especially if you have had any audit findings. Major and Critical findings almost always result in a random follow up audit.

          • Indeed. And if that random audit goes badly you might just get a followup from the nice ladies and gentlemen in the yellow jackets. In fact, if a few more CEOs were perp walked by OCI, compliance might go a whole lot easier.
            • if a few more CEOs were perp walked by OCI, compliance might go a whole lot easier.

              Indeed. Perp walking is a wonderful deterrent, because it destroys lives and careers, while requiring no legally admissible evidence or due process, much less an actual conviction in a court of law. One of the wonderful things about America is that we can destroy people with extra-judicial punishment at the sole discretion of police and prosecutors, while still considering ourselves superior to other countries because, at least on paper, there is a presumption of innocence.

              Did you know that you can buy th

              • I wonder how you react when it's a poor black man getting walk instead of a Job Creator, Peace Be Upon Them? At one point in its history, the FDA routinely jailed CEOs for violations by their firms. After all, that's why they make the big bucks, right? They have so much more to risk than an average worker!
                • I wonder how you react when it's a poor black man getting walk instead of a Job Creator, Peace Be Upon Them?

                  The solution to injustice is justice, not more injustice for other groups. Perp walks and other extra-judicial punishments, are wrong, and should be universally condemned, regardless of the ethnicity of the victims.

                  At one point in its history, the FDA routinely jailed CEOs for violations by their firms.

                  Absolute hogwash. The FDA has never had the authority to jail anyone.

        • by Nevo ( 690791 )
          Many labs routinely participate in accreditation audits. The accrediting agency sends a box of samples to the lab, the lab runs tests on the samples, and sends results back to the accreditation agency. If your results don't match expected results, things start happening.
    • by Anonymous Coward on Friday July 08, 2016 @06:09AM (#52469657)

      How? For those who don't know, Theranos is mainly in the business of performing blood tests on behalf of the government, hospitals, pharmacy companies, employers and suchlike. The people who actually stand to lose from faulty test results are by and large the people whose blood is being tested, but these are not the people who pay for the tests directly, nor are they the people who choose which lab should perform the analysis. Since there is no financial connection between the actors and the desired outcome, the free market can in this case never work and hence regulation is required.

      • by tnk1 ( 899206 )

        I mostly agree, but it should be pointed out that unless those entities are trying on purpose to exclude, misreport, or disqualify the people whose blood is being tested, they are just as interested in getting back legitimate results as those being tested. Yes, there is probably an insulation factor, especially if it is a bureaucracy involved, and that means that the feedback from those sources could be delayed or muted.

        It's my opinion that you probably could have the free market fulfill this function, but

      • It already has worked. For example, Walgreens recently dumped the pilot they were doing with Theranos.

        A company that had considered working with them has to maintain its legitimacy. Your company's reputation is a market force.

        • Re: (Score:3, Informative)

          by whoever57 ( 658626 )

          It already has worked. For example, Walgreens recently dumped the pilot they were doing with Theranos.

          The free market wasn't responsible for that. Walgreens only dumped Theranos because of the government laws and regulations. It was a regulatory investigation of Theranos that discovered the issues.

          • by ranton ( 36917 )

            It already has worked. For example, Walgreens recently dumped the pilot they were doing with Theranos.

            The free market wasn't responsible for that. Walgreens only dumped Theranos because of the government laws and regulations. It was a regulatory investigation of Theranos that discovered the issues.

            My guess is the original poster meant that this government enforced punishment was unnecessary, not the regulations which found the misconduct. If that was the intent then I do agree with it. This does seem punitive and not that necessary. Now that the improper conduct was discovered I think the free market was able to prevent the behavior by simply no longer doing business with Theranos.

          • Wow! Above post modded as "Troll". There must be some butt-hurt libertarians with mod points!
    • by K. S. Kyosuke ( 729550 ) on Friday July 08, 2016 @06:12AM (#52469665)
      So we don't need to ever protect consumers from dangerous food either - if it kills you, you simply won't buy it the next time!
      • by Anonymous Coward

        Those who advocate things like this always say that the free market will ensure that companies that kill their consumers will see a drop in profit (nobody seems to get punished regardless of negligence, like a profit dip is punishment enough). Anyway, what I always wonder is what makes those advocates so sure that it will *never* be them that eats the contaminated food or is killed because of a vehicle flaw (newsflash, it doesn't need to be your vehicle, just one that you're near) or get their water supply

        • Re: (Score:3, Insightful)

          by tnk1 ( 899206 )

          You have a point, although it should be pointed out that natural selection, which is ultimately what the so-called "free market" really is, can create some very complex self-regulation which is very adaptive.

          The problem, as many would be happy to tell you, is that such selection does often happen at the expense of individuals. So we get regulation to try and prevent those outcomes.

          Of course, we know that even regulation doesn't save everyone, and it can have its own problems which are inherent to intervent

          • by xanthos ( 73578 )

            "That said, I don't think those forces have ever really been allowed to operate to their full extent, for a sufficient amount of time, outside of fictional accounts"

            Is the word "monopoly" fictional? That is the end result of non-regulated market forces. Next time you read about a blockbuster M&A just substitute "increased market share" with "reduced competition". And with reduced competition comes less pressure to innovate and improve.

            My guess is that Theranos will stop marketing itself as a technolo

            • by ranton ( 36917 )

              "That said, I don't think those forces have ever really been allowed to operate to their full extent, for a sufficient amount of time, outside of fictional accounts"

              Is the word "monopoly" fictional? That is the end result of non-regulated market forces.

              I'm not sure if there have ever been monopolies that existed without government forces helping out. The Dutch East India Company is probably the largest monopoly, for its day at least, and even it relied heavily on funding from multiple countries. It was the original "Too Big to Fail" corporation. Crony capitalism was also heavily involved in the formation of the large US corporations which eventually needed to be busted up over the past 150 years.

              Perhaps if you allow crony capitalism to exist within your d

            • by tnk1 ( 899206 )

              Monopolies are not fictional, but what we have seen with them may not be the entire story. That's why I am very much tying the time frame of evolution to what would be needed to allow the free market to work properly. You can't simply look at something like a Gilded Age vertical or horizontally integrated monopoly and suggest that what happened can necessarily remain in existence forever.

              When people see a monopoly, they think that it is the end result of capitalism, but how many monopolies have actually e

      • by dcw3 ( 649211 )

        So we don't need to ever protect consumers from dangerous food either - if it kills you, you simply won't buy it the next time!

        Whatever kills you makes you stronger...oh, wait.

      • by JustAnotherOldGuy ( 4145623 ) on Friday July 08, 2016 @09:05AM (#52470613)

        So we don't need to ever protect consumers from dangerous food either - if it kills you, you simply won't buy it the next time!

        Exactly. The magical "invisible hand" of the "free market" at work!

        This is the blind spot most libertarians have: they never stop to think that they might be the ones getting fucked, it'll always be the other guy. It'll never be YOUR wife or YOUR child who dies from some untested medication or contaminated food or unsafe electrical appliance.

        It'll always be some other guy whose wife or kid dies, and then the Magical Invisible Hand Of The Free Market will punish that company and force them out of business, so they'll be safe, right?

        But it won't be your wife or your kid, no way. And if it IS your kid or your wife, well shucks, you can just take them to court for damages, right? Because that's the magical Libertarian answer to any problem that occurs: don't try to prevent a problem from occurring through regulation or legislation, just sue someone after something bad happens!

        • by dog77 ( 1005249 )
          Most libertarians believe in liability and rule of law. So in a libertarian utopia, it is not just the free market that punishes a wrong doer.
          • Most libertarians believe in liability and rule of law.

            No, most of them do not appear to believe in most laws nor do most of them appear to believe in any regulation, or at least any that might interfere with their pie-in-the-sky notions of "liberty" or "freedom", which they can't define except in the most nebulous ways. Most libertarians don't even like the idea of driver's licenses, which seems like a common sense measure. But "common sense" and libertarianism often seem to be mutually exclusive.

            -

            So in a libertarian utopia, it is not just the free market that punishes a wrong doer.

            Oh, yes, the magical libertarian utopia, which never existed an

            • No, most of them do not appear to believe in most laws

              How many do and how many don't? I'm interested in the sample size you've used to calculate "most".

              • How many do and how many don't? I'm interested in the sample size you've used to calculate "most".

                How many? Practically every single one I've ever heard opposes all taxes, all licenses, and almost any kind of regulation.

                By now that number is in the multiple hundreds, which includes the Libertarian presidential candidates. (Those guys are hilariously cracked, they all sound like they just escaped from a mental hospital for the Criminally Ridiculous.)

                Tell me, where do property rights come from in Libertarian Land?

    • by ceoyoyo ( 59147 )

      Except they didn't? Theranos operated fraudulently for some time, requiring a lot of tests to be redone. They also seem to have lied to investors, customers and the public about what they were and could do, creating a serious distortion of a free market, where accurate information is available to all.

    • But this is a problem I believe the markets and courts actually could handle.

      Yeah, don't try to prevent a problem or the deaths that might occur from it, just let the survivors sue in court after they've lost their child or spouse!

    • She ran a scam against the people and the government. So she should be able to just walk away with her millions, the free market will take care of it?

      Fuck that.

    • This isn't new regulation. This is a part of enforcing regulations.

  • Lol Business (Score:1, Interesting)

    by Anonymous Coward

    What would she need to own a lab for? She never did any research to begin with?

    Holmes is 100% pure corporate CEO/Board-member. She has connections, extraordinary bullshitting abilities, and is tied in to god knows how many VC and Silicon valley based "ventures". She doesn't need a lab, or scientists, or engineers. She hires the people who hire them.

    Holmes will be back with a bio-med big-data startup within 3 years. Bookmark this post.

    • Re:Lol Business (Score:5, Insightful)

      by Anonymous Coward on Friday July 08, 2016 @07:58AM (#52470047)

      Holmes is persona non-grata right now. She raised the money she did through family connections; her parents were both highly placed bureaucrats who knew top level folks which is why her Board was made up of politicians and why she still retained a majority stake despite all the funding. Her first real round of money came from Tim Draper of Draper Fischer Jurveston, who is a personal friend of her parents and the scuttlebutt says helped her next round of funding too, which included people like the Larry J Ellison Trust (around $20-$30M). Her big round of $400M was a mix of private equity money and Blue Cross Blue Shield Ventures, so insurance firms hoping her cheap tests would make testing more affordable; only BCBS Ventures has any real experience investing in biotech and even them it's from an insurance angle, not from an angle of real science.

      However, she will not work in biotech again. The interesting thing is that all of her investors were not typical biotech investors, and the real biotech VC funds such as Lateral Ventures, Flagship, Polaris, Domain, New Leaf, funds that have experience investing in real science that creates real medical products, they all turned her down thinking she was a fraud. Miss Holmes got lucky when she got Theranos going as there was a wave of money entering biotech from non-traditional sources, mostly tech entrepreneurs looking for new places to put their money and thinking biotech was the next hot thing. Many of these investors dumped money into ideas that sounded great because they were neat technology, but unlike in software in biotech having the best tech does not guarantee you success, you also need to pass both the regulatory and the insurance reimbursement hurdles and those hurdles require a level of design sophistication and validation most in tech aren't used to. The result was many of these typical tech investors and entrepreneurs dumped a ton of money into ideas that had no chance of success based purely on charisma of the leader and the gee-whiz factor of the technology without truly understanding what they were getting into. The easy money from 2011-2015 for biotech from non-traditional sources is gone completely now, leaving the traditional investors standing and those guys won't touch her; reputation in biotech matters way too much and they won't want her anywhere near their companies.

      No, Holmes is finished in Biotech. What I suspect is she will be on the Board of Theranos while a new CEO steps in, who will find the company a giant mess and essentially either wind it down or find some buyer to make the shareholders come out ok. Most of her shareholders likely hold preferred equity to Miss Holmes' common, meaning they get to divide up the money before she does and I doubt anything will be left over. Meanwhile she'll lay low for a few years and let the next big crisis make Theranos fade from memory, then she'll end up a partner and some venture fund investing in companies and make her essentially the next Ellen Pao.

      • Brilliant post.
        Thank you.
      • by khallow ( 566160 )

        Holmes is persona non-grata right now. [...]

        However, she will not work in biotech again. [...]

        No, Holmes is finished in Biotech.

        Unless, of course, those assertions turn out false. Never underestimate the power of dumb money to pay someone to tell it what it wants to hear.

    • Re:Lol Business (Score:5, Insightful)

      by AntronArgaiv ( 4043705 ) on Friday July 08, 2016 @08:04AM (#52470091)

      What would she need to own a lab for? She never did any research to begin with?

      Holmes is 100% pure corporate CEO/Board-member. She has connections, extraordinary bullshitting abilities, and is tied in to god knows how many VC and Silicon valley based "ventures". She doesn't need a lab, or scientists, or engineers. She hires the people who hire them.

      Holmes will be back with a bio-med big-data startup within 3 years. Bookmark this post.

      She's an interesting example of how far you can get with money, influence and a positive approach, in the absence of any real understanding of the details of the business you're in.

      Maybe she can use the time off to finish college.

  • by wonkey_monkey ( 2592601 ) on Friday July 08, 2016 @05:16AM (#52469531) Homepage

    Theranos CEO Elizabeth Holmes Banned From Owning a Lab

    But labs are so sweet!

    Maybe she could get a beagle instead.

    • Theranos CEO Elizabeth Holmes Banned From Owning a Lab

      But labs are so sweet!

      Maybe she could get a beagle instead.

      Note that the ruling does not ban her beagle from owning a lab . . .

      • Especially if it's done through a shell corporation based in the Vanuauauauauauauauatua Islands.

      • by dcw3 ( 649211 )

        Theranos CEO Elizabeth Holmes Banned From Owning a Lab

        But labs are so sweet!

        Maybe she could get a beagle instead.

        Note that the ruling does not ban her beagle from owning a lab . . .

        Seems much like G. Gordon Liddy...When asked how he was able to maintain such a close relationship with guns despite his status as a convicted felon, Liddy replied, "Mrs. Liddy has an extensive collection of firearms, some of which she keeps on my side of the bed."

      • by NetNed ( 955141 )
        Bow chicka bow wow!
    • by Trogre ( 513942 )

      Er, about that CAT scan you're booked in for next week...

  • by ortholattice ( 175065 ) on Friday July 08, 2016 @05:46AM (#52469621)

    " While we are disappointed by CMS' decision,..."

    If she had any sense of ethics, she would be grateful the CMS is doing its job of protecting the public from dishonest people like her. Why isn't she in jail for falsifying test results and endangering people's lives?

    She's not sorry she did it, only that she got caught. Typically psychopathic behavior, Sadly she'll probably be successful someday, lying, cheating, and using people on her way up.

    • by Anonymous Coward on Friday July 08, 2016 @09:40AM (#52470899)

      " Why isn't she in jail for falsifying test results and
      endangering people's lives?

      Perhaps because she's a scion of Millennial Feminism and female STEM empowerment.

      • Either that or because her parents are super rich and she is very well connected politically.

        Hell, maybe some of the politicians were in on the scam and she has them by the metaphorical balls preventing her from being prosecuted?

  • by smooth wombat ( 796938 ) on Friday July 08, 2016 @06:02AM (#52469651) Journal

    As the hits keep coming, it might benefit Ms. Holmes to openly admit she's been a fraud from day one. She's ripped off investors with false claims and has endangered people's lives with her false results.

    To date, Theranos has never allowed a peer review of her process, has never submitted to government tests and has admitted they don't use their own testing procedures, instead going back to the tried and true method.

    Give it up, Holmes. Your days are numbered.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      As the hits keep coming, it might benefit Ms. Holmes to openly admit she's been a fraud from day one. She's ripped off investors with false claims and has endangered people's lives with her false results.

      To date, Theranos has never allowed a peer review of her process, has never submitted to government tests and has admitted they don't use their own testing procedures, instead going back to the tried and true method.

      Give it up, Holmes. Your days are numbered.

      I've followed Theranos rather closely for years. I'm not sure she can admit fraud, because admitting it first means you have to believe it and I don't think she does. The sheer arrogance of the woman is astonishing, to think that she as a college dropout knew more about biochemical testing than thousands of clinical pathologists, and all she had to do was dilute samples to run them on her machine, or it turns out standard machines from Siemens as her machine wasn't even used. Then the non-stop gushing med

      • because admitting it first means you have to believe it and I don't think she does.

        Delusional psychopaths* generally have this problem.

        * I'm probably not using the correct term but you get my meaning
        • Competent marketers first have to believe their own bullshit, if only for a second.

          • by slew ( 2918 )

            Competent marketers first have to believe their own bullshit, if only for a second.

            Disagree. Actually, competent marketers (like sales people) understand what their audience believes, yet they have to be grounded in reality**.
            My experience (having worked with marketing folks in several startups and large companies) is that the moment they get sucked into their own reality distortion field (aka drink their own koolaid), they are generally lost in a cesspool of over-promise and under-deliver and damage control unless they get religion and crawl their way out.

            The best marketers are actual a

            • Marketers always 'over promise'. The rest of the company has to be setup to control them. Asking them to not lie, is like asking a bird not to fly. You'd hope they would know they were lying, but to pull off a convincing lie you have to believe...like you say a little schizo.

              It's ultimately why tech companies fail, more or less, when marketing takes over the CEO role. They turn into marketing companies, in some cases that reflects the reality that they are now making commodity stuff. In others it's just

  • Sorry, who? What is Theranos? I do not want to google it, and will not click any google links for this one either, dont care, but why isn't there a single sentence with half a description on what this Theranos is and why the fucking government messing with it?

    • Agree 100%. What the fuck is the CONTEXT??

      Hey /. editors -- how about you get off your lazy asses for once:

        Elizabeth Holmes, CEO of Theranos (a health-technology and medical-laboratory-services company), Banned From Owning a Lab

      /Oblg. <voice="Nick Burns> "See, was that so hard?"

    • That must be a pretty nice rock you just crawled out from under.
      For someone with such a low slashdot ID, you must not check in very often; just searching Slashdot for "theranos" returned 10 articles since 2013.
      Holmes' spectacular rise and fall was the punchline of a joke in the season finale of HBO's Silicon Valley, so even Hollywood writers know who she is/was.
      • I remember seeing something with it's name here I think, that does not matter, because obviously I did not find it relevant for me to remember. I am not finding it relevant to me now either, but that is not the point once again. It is the ridiculous way these stories are smarized, there is no context, there isn't even a link to an earlier story where the context could be derived. It is all circular and self referencing and the only reason I bothered to leave this comment is specifically because of this h

        • after all, it is a story of government oppression of the individual rights,

          Individual rights? This is government regulation of fraudulent medical testing. Maybe you don't care if your liver function/blood sugar/HIV test might be correct, but I do.

  • But what about other breeds? Could she have a fox terrier or a dachshund?

  • by JoeyRox ( 2711699 ) on Friday July 08, 2016 @08:53AM (#52470519)
    Interesting how it was all about her when Theranos was the best thing since slice bread but suddenly it's "we" in her statement yesterday even though she was the one specifically banned from the industry for 2 years.
  • Can she own a beagle or a terrier?

  • All she needs is an old RV and a guy like Jesse to show her the ropes.
  • She's still hot and rich.

    • by slew ( 2918 )

      She's still hot and rich.

      She might be still hot, but rich? According to the "experts", her common-stock stake in Theranos is worth approx $0...

  • Because quackery and junk science get passed off as the real deal every day across the globe. Was she a Trump supporter or something, or what was going on behind the scenes that convinced the establishment to come down so hard on this specific fraudster? Not that I disagree with making life hard for snake-oil salesmen, but it's so strange to me that some charlatans get so severely punished while others are quietly swept under the rug our outright supported.

  • Then only outlaws will have labs?

    Miss Heisenberg, perhaps...

  • Elizabeth Holmes looks like some sort of ghoul, or vampire in that picture, slavering and bloodthirsty. Yikes.

  • So her response to being banning from owning a Lab is to state that she is building a better Lab?

  • It concerns me that the governemnt medicare and medicade services has the power to hand out punishments; in particular when it comes to individuals. Shouldn't this be done through law enforcement and the courts?

Bringing computers into the home won't change either one, but may revitalize the corner saloon.

Working...