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US Regulators Find Serious Deficiencies At Theranos Lab (wsj.com)
An anonymous reader writes: 2016 has not started well for blood-testing startup Theranos. Already facing allegations of data manipulation, the Centers for Medicare and Medicaid Services have found problems with Theranos' laboratory in Newark, California, putting the company's relationship with the Medicare program in danger. WSJ reports: "It isn't clear exactly what regulators have faulted Theranos for in their latest inspection, which took several months. Adverse findings would be another regulatory setback for one of Silicon Valley's highest-profile startups, valued at about $9 billion in 2014. Theranos already has stopped collecting tiny samples of blood from patients' fingers for all but one of its tests while it waits for the Food and Drug Administration to review the company's applications for wider use of the proprietary vials called 'nanotainers.' In October, the FDA said it had determined that the nanotainers were an 'uncleared medical device.'"
Theranos has been making extraordinary claims and providing no proof (to the public, anyway).
Why do you say they are technically savvy? Their marketing appears to be savvy, but all the impartial stories I've seen (including from Reason, which is usually against regulators and incumbents who benefit from regulations) give the impression of dodgy technology at Theranos.
Actually, we're not. I'm pretty high up in finance in the California division of the largest testing company. I don't speak for my company so I'm posting as AC.
It's an interesting situation. We're taking a wait-and-see approach to what Theranos is doing. This is a very highly regulated business, and Theranos' approach was backwards-- they set up their business associations before getting the necessary governmental and regulatory approvals. Start-up style, if you will. And it's coming back to bite them now.
That's not to say that we won't adopt some of their approaches if it works out. From a business perspective, their plan for consumer-driven testing is an fascinating one. They are targeting the healthcare consumer rather than the physician, which turns the testing world on its head. Unfortunately, that's a lot harder in California than it is in most other states, though.
The medical testing field is weird that way. The physician, who is the only one who can order most testing, is our customer. So are the insurance companies, and the government, in their role as Medicare/MediCaid administrators. The patient, who supplies the sample and usually pays part of the bill, currently has little or no say about what company actually does the testing. Theranos plans to turn that sideways, which is a very interesting approach. I hope it works out because we'll all benefit. I'd probably be executed for saying so, but if our company has to give up a little so that the patients benefit, I don't have a problem with that.
"Are you so sure? Does it not make some sense that advancements could be made on how much you need to collect?"
On this point, yes, we're pretty sure.
Here's the problem: when there's something bad (bacteria, virus, mutated DNA) in your system, it usually appears in very small copy numbers (copy number is a technical term that tells you how many copies of something you see in a given sample). The relative abundance (another commonly used term that tells you how common your target is compared to everything else in the sample) of the bad stuff (not a technical term) is usually very small compared to the good stuff. So much so, that often times you need a large sample just to get a single copy of a bad thing. In most biological systems, we're talking needle-in-a-haystack small copy numbers for bad things.
Think of it this way: Let's say you have a gallon bucket full of coins with only a few quarters. You randomly sample a cup of coins. Can you confidently say there are no quarters in the bucket? Now say the coins are flowing through a series of tubes (no, these are not bitcoins on the internet) and your sample is determined by the coins present when you siphon off your cup's worth. What would the relative abundance need to be before you can confidently say quarters are present in the system using a cup for sampling? How about using a quart for sampling?
Somewhat like the laws of thermodynamics limit the ability to create perpetual motion machines, relative abundance/copy number place hard limits on the sample sizes needed to detect things in blood with confidence.
-Chris