(Reuters) – U.S. federal health regulators have proposed banning Theranos Inc founder Elizabeth Holmes from the blood-testing business for at least 2 years after determining that the company failed to fix certain problems at its California laboratory, the Wall Street Journal reported.
The Centers for Medicare and Medicaid (CMS), in its letter dated March 18, said it planned to revoke the lab’s federal license and prohibit Holmes and Theranos’s president, Sunny Balwani, from owning other labs for at least two years, the WSJ said on Wednesday.
The proposed ban would include Theranos’s only other lab, located in Arizona, which along with the California lab generates most of the company’s revenue, the Journal said.
The Journal said CMS gave Theranos about 10 days to provide adequate evidence of why the sanctions should not be imposed. Theranos had responded and the CMS was reviewing the response, the WSJ said, citing a person familiar with the matter.
A Theranos spokeswoman told Reuters that the CMS had not imposed any sanctions on the company as yet.
Theranos had promised to shake up medical testing by conducting a wide range of tests with just one drop of blood in a user-friendly manner with quick results.
The company has been in the spotlight after reports in the WSJ suggested that the blood-testing devices were flawed and had problems with accuracy.
The CMS in January had said that deficient practices at the California lab posed an “immediate jeopardy to patient health and safety”.
Around that time, Walgreens Boots Alliance Inc, the largest U.S. drugstore chain, said it would stop using the services of the lab until all issues raised by the CMS were addressed.