Theranos founder and former CEO continues down the path she began by defrauding her investors and lying to clinical laboratory leaders about her technology’s capabilities
As a result of the ban, Holmes is “barred from receiving payments from federal health programs for services or products, which significantly restricts her ability to work in the healthcare sector,” ARS Technica reported.
So, Holmes, who is 39-years old, is basically banned for life. This is in addition to her 11-year prison sentence which was paired with $452,047,200 in restitution.
“The exclusion was announced by Inspector General Christi Grimm of the Department of Health and Human Services’ Office of Inspector General,” ARS Technica noted, adding that HHS-OIG also “excluded former Theranos President Ramesh “Sunny” Balwani from federal health programs for 90 years.” This is on top of the almost 13-year-long prison sentence he is serving for fraud.
“The Health and Human Services Department can exclude anyone convicted of certain felonies from Medicare, Medicaid, and Pentagon health programs,” STAT reported.
“Accurate and dependable diagnostic testing technology is imperative to our public health infrastructure,” said Inspector General Christi Grimm (above) in an HHS-OIG statement. “As technology evolves, so do our efforts to safeguard the health and safety of patients, and HHS-OIG will continue to use its exclusion authority to protect the public from bad actors.” Observant clinical laboratory leaders will recognize this as yet another episode in the Elizabeth Holmes/Theranos fraud saga they’ve been following for years. (Photo copyright: HHS-OIG.)
Why the Ban?
“The Office of Inspector General (OIG) for the Department of Health and Human Services (HHS) cited Holmes’ 2022 conviction for fraud and conspiracy to commit wire fraud as the reason for her ban,” The Hill reported.
“False statements related to the reliability of these medical products can endanger the health of patients and sow distrust in our healthcare system,” Grimm stated in the HHS-OIG statement, which noted, “The statutory minimum for an exclusion based on convictions like Holmes’ is five years.
“When certain aggravating factors are present, a longer period of exclusion is justified,” the statement continued. “The length of Holmes’ exclusion is based on the application of several aggravating factors, including the length of time the acts were committed, incarceration, and the amount of restitution ordered to be paid.”
Rise and Fall of Elizabeth Holmes
Readers of Dark Daily’s e-briefs covering the Holmes/Theranos fraud saga will recall details on Holmes’ journey from mega success to her current state of incarceration for defrauding her investors.
In November 2022, she was handed an 11-year prison sentence for not disclosing that Theranos’ innovative blood testing technology, Edison, was producing flawed and false results. Theranos had “raised hundreds of millions of dollars, named prominent former US officials to its board, and explored a partnership with the US military to use its tests on the battlefield,” STAT reported.
To get Holmes physically into prison was a journey unto itself. At one point, evidence showed her as a potential flight risk. “In the same court filings, prosecutors said Holmes and her partner, William Evans, bought one-way tickets to Mexico in December 2021, a fact confirmed by her lawyers,” Dark Daily’s sister publication The Dark Report revealed in “Elizabeth Holmes’ Appeal Questions Competence of CLIA Lab Director.”
Drama around her move into prison continued. “The former CEO’s attorneys are making last-minute legal moves to delay her prison sentence while she appeals her guilty verdict,” Dark Daily reported.
At the same time, Holmes appeared to be on a mission to revamp her public image.
In the Times piece, Holmes talked about her plans to continue to pursue a life in healthcare. “In the story, Holmes contended that she still thinks about contributing to the clinical laboratory field. Holmes told The Times that she still works on healthcare-related inventions and will continue to do so if she reports to prison,” The Dark Report covered in “Elizabeth Holmes Still Wants ‘To Contribute’ in Healthcare.”
In the meantime, her legal fees continued to mount beyond her ability to pay. “Holmes’ prior cadre of lawyers quit after she could not compensate them, The Times reported,” The Dark Report noted. “One pre-sentencing report by the government put her legal fees at more than $30 million,” according to The New York Times.
Apparently, this closes the latest chapter in the never-ending saga of Elizabeth Holmes’ fall from grace and ultimate conviction for defrauding her investors and lying to healthcare executives, pathologists, and clinical laboratory leaders.
FDA says the move will make it easier to gain authorization for other clinical laboratory tests to utilize at-home collection kits
In another sign of how diagnostic testing is responding to changing consumer preferences, the US Food and Drug Administration (FDA) granted marketing authorization to LetsGetChecked for the company’s Simple 2 test for chlamydia and gonorrhea, which includes at-home collection of samples sent to the test developer’s clinical laboratories in the US and in Ireland.
This marks the first time the FDA has cleared a diagnostic test for either condition in which samples are collected at home. It’s also the first test with at-home sample collection to be authorized for any sexually transmitted infection (STI) other than HIV, the FDA said in a new release.
Samples are collected through a vaginal swab or urine sample. “Results are delivered online in approximately 2-5 days with follow-up virtual consultations and treatment available if needed,” the company press release states.
Previously authorized tests for the conditions required sample collection at the point of care. The company also offers telehealth and online pharmacy services.
“This authorization marks an important public health milestone, giving patients more information about their health from the privacy of their own home,” said Jeff Shuren, MD, JD (above), Director of the FDA’s Center for Devices and Radiological Health. “We are eager to continue supporting greater consumer access to diagnostic tests, which helps further our goal of bringing more healthcare into the home.” With this emphasis on at-home testing from the FDA, clinical laboratories in the US and Ireland will likely be processing more at-home collected samples. (Photo copyright: FDA.)
Simple 2 Process and Costs
Prior to collecting the sample, the user goes online to complete a questionnaire and activate the kit, the FDA news release notes.
LetsGetChecked, headquartered in New York City and Dublin, Ireland, says its US labs are CLIA– and CAP-certified. The company currently offers more than 30 at-home tests covering STIs, men’s health, women’s health, and COVID-19, at prices ranging from $89 to $249 per test.
The Simple 2 test costs $99, and is not covered by insurance, Verywell Health reported. Consumers can get discounts by subscribing to quarterly, semiannual, or annual tests.
New Regulatory Pathway
The FDA said it reviewed the test under its De Novo regulatory pathway, which is intended for “low- to moderate-risk devices of a new type,” according to the news release.
“Along with this De Novo authorization, the FDA is establishing special controls that define the requirements related to labeling and performance testing,” the agency stated. “When met, the special controls, in combination with general controls, provide a reasonable assurance of safety and effectiveness for tests of this type.”
This creates a new regulatory classification, the agency said, that will make it easier for similar devices to obtain marketing authorization.
Citing data from the federal Centers for Disease Control and Prevention (CDC), the FDA news release states that chlamydia and gonorrhea are the most common bacterial STIs in the US. The CDC estimates that there were 1.6 million cases of chlamydia and more than 700,000 cases of gonorrhea in 2021.
“Typically, both infections can be easily treated, but if left untreated, both infections can cause serious health complications for patients, including infertility,” the news release states. “Expanding the availability of STI testing can help patients get quicker results and access to the most appropriate treatment, ultimately helping to curb the rising rates of STIs.”
Experts Praise the FDA’s Authorization of the Lab Test
STI experts contacted by STAT said they welcomed the FDA’s move.
“There are many people who would like to be tested for STIs who may not know where to go or who have barriers to accessing medical care,” said Jodie Dionne, MD, Associate Professor of Medicine in the University of Alabama at Birmingham (UAB) Division of Infectious Diseases. “If we are going to do a better job of reaching more sexually active people for STIs … we need to be creative about how to get them tested and treated in a way that is highly effective and works for them.”
Family physician Alan Katz, MD, a professor at the University of Hawaii John A Burns School of Medicine, told STAT that the Hologic assay is also used by clinicians who treat people in remote locations to diagnose STIs and is regarded as being highly accurate.
“This option is exceptionally useful for individuals who live in rural areas or are geographically distanced from a clinic where STI testing can be done and there is no telehealth option available,” he told STAT.
With this latest move, the FDA is recognizing that it is time to give consumers more control over their healthcare. This is a signal to clinical laboratories that they should be developing their own strategies and offerings that serve consumers who want to order their own tests. Of course, many states still require a physician’s signature on lab test orders, but that is likely to change over time.
High court decision in 2012 altered patent law and effectively blocked protections for certain clinical laboratory diagnostic tests and procedures
Clinical laboratory leaders and pathologists will be interested to learn that a US Supreme Court (SCOTUS) decision from 2012 may be partly to blame for the shortage of at-home COVID-19 rapid antigen tests while the SARS-CoV-2 Omicron variant surged this past winter.
During that time, consumer demand for all COVID-19 at-home tests quickly depleted the already dwindling supply. However, the 2012 SCOTUS ruling in Mayo Collaborative Services v. Prometheus—which rewrote patent law in the biotech industry—effectively blocked patent protections for many medical laboratory diagnostic tests and procedures, wrote Paul R. Michel in a column he penned for STAT.
Michel served on the United States Court of Appeals for the Federal Circuit from 1988 to his retirement in 2010, and formerly was its chief judge from 2004 to 2010.
Shortage of COVID-19 Home Tests Due to ‘Tsunami of Demand’
The diagnostic test shortage that continued throughout the second year of the pandemic has been blamed on a “tsunami of demand,” as vaccine and testing mandates went into effect, according to CNBC. Other causes of the shortages were linked to shortages of raw materials and the US Food and Drug Administration’s slow review process, The Wall Street Journal reported.
However, as Michel noted in STAT, Mayo v. Prometheus “was a legal bombshell that upended the prior law on patent eligibility. And it has had disastrous real-world consequences for Americans.”
San Diego-based Prometheus Laboratories had developed a diagnostic test that measured how well patients metabolized medicines to treat autoimmune diseases. When Mayo Collective Services, which does business as Mayo Clinic Laboratories, developed its own test based on the Prometheus design, Prometheus sued for patent infringement. But it lost when the case reached the Supreme Court.
Michel points out that developing new clinical laboratory diagnostic tests and methods is “slow and expensive” work that becomes financially unsustainable for biotech companies when patent protections are removed.
In the “wake of the Mayo decision,” he wrote, many small biotech companies that had been focused on developing new diagnostics went out of business. Simultaneously, some major research centers, such as the Cleveland Clinic, ended programs aimed at discovering new diagnostic methods.
Financial Repercussions of the SCOTUS Ruling
“In essence, in the four years following Mayo, investment in disease diagnostic technologies was nearly $9.3 billion dollars lower than it would have been absent Mayo,” wrote A. Sasha Hoyt, in her analysis of financial repercussions caused by the loss of venture capital investment in new medical laboratory diagnostics. Hoyt is an incoming associate and judicial extern at Finnegan, Henderson, Farabow, Garrett and Dunner, LLP in Washington DC.
“However,” she added, “it is important to note that the yearly investment totals for disease diagnostic technologies have generally increased in the years following Mayo—but it has increased at a lower rate compared to all other industries.”
Shahrokh Falati, PhD, JD, director of the Patent Law Clinic at New York Law School, maintains that the Supreme Court-created exceptions to existing patent law have damaged America’s standing as a leader in new technology development and commercialization.
“The US Supreme Court effectively redefined the scope of patent eligible subject matter when it decided Mayo. This decision focused on medical diagnostic technology and has had a profound effect on the biotechnology and personalized medicine industries in the United States …,” he wrote in the North Carolina Journal of Law and Technology.
“[The Supreme Court’s ruling] has caused havoc in the biopharmaceutical industry by not only making it a near impossibility to obtain a patent in certain fields, but also by vastly increasing the number of medical diagnostic patents being invalidated based on Section 101 of Title 35 of the US Code,” said Shahrokh Falati, PhD, JD (above), director of the Patent Law Clinic at New York Law School, in an article he wrote for the North Carolina Journal of Law and Technology. Funding for clinical laboratory diagnostics development also has curtailed since the SCOTUS ruling. (Photo copyright: Albany Law School.)
Precision Medicine at Risk without Intellectual Property Protection
Elizabeth O’Day, PhD, CEO and founder of Olaris, Inc., a precision medicine company, has advocated for reform of Section 101. In an Olaris blog post, she argues that reform should provide intellectual property protection for therapeutic companies that develop biomarkers and algorithms used in precision medicine.
“We have the omic technologies (genomic, proteomic, metabolomic, etc.) and analytical tools needed to uncover biomarkers that could dramatically enhance our ability to detect and treat disease,” O’Day wrote. “Let’s reform Section 101 so that these breakthrough products have the opportunity to reach the people that need them.”
In, “CMS Cuts BRCA Price by 49% in Response to Competition,” Dark Daily’s sister publication, The Dark Report, highlighted the negative consequences the Mayo decision had on the clinical laboratory diagnostic testing industry.
“It is past time that Congress act to address this issue,” they wrote. “To assist us as we consider what legislative action should be taken to reform our eligibility laws, we ask that you publish a request for information on the current state of patent eligibility jurisprudence in the United States, evaluate the responses, and provide us with a detailed summary of your findings.” That letter went to Hirshfeld on March 5, 2021, with a request for findings no later than March 5, 2022.
For now, patent reform appears to be locked in uncertainty, which means SCOTUS’ decision that altered patent law affecting the biotech industry may continue to hamper development of new diagnostic tests as well as the current supply of at-home COVID-19 tests. Clinical laboratory leaders involved with diagnostic test developers will want to closely monitor for any changes to the Supreme Court’s ruling.
Decision is part of UK effort to diagnose 75% of all cancers at stage I or stage II by 2028 and demonstrates to pathologists that the technology used in liquid biopsy tests is improving at a fast pace
Pathologists and medical laboratory scientists know that when it comes to liquid biopsy tests to detect cancer, there is plenty of both hope and hype. Nevertheless, following a successful pilot study at the Christie NHS Foundation Trust in Manchester, England, which ran from 2015-2021, the UK’s National Health Service (NHS) is pushing forward with the use of liquid biopsy tests for certain cancer patients, The Guardian reported.
NHS’ decision to roll out the widespread use of liquid biopsies—a screening tool used to search for cancer cells or pieces of DNA from tumor cells in a blood sample—across the UK is a hopeful sign that ongoing improvements in this diagnostic technology are reaching a point where it may be consistently reliable when used in clinical settings.
The national program provides personalized drug therapies based on the genetic markers found in the blood tests of cancer patients who have solid tumors and are otherwise out of treatment options. The liquid biopsy creates, in essence, a match-making service for patients and clinical trials.
Liquid Biopsy Genetic Testing for Cancer Patients
“The learnings from our original ‘Target’ study in Manchester were that genetic testing needs to be done on a large scale to identify rare genetic mutations and that broader access to medicines through clinical trials being undertaken across the country rather than just one site are required,” Matthew Krebs, PhD, Clinical Senior Lecturer in Experimental Cancer Medicine at the University of Manchester, told The Guardian.
Krebs, an honorary consultant in medical oncology at the Christie NHS Foundation Trust, led the Target National pilot study.
“This study will allow thousands of cancer patients in the UK to access genetic testing via a liquid biopsy. This will enable us to identify rare genetic mutations that in some patients could mean access to life-changing experimental medicines that can provide great treatment responses, where there are otherwise limited or no other treatment options available.”
Detecting cancers at earlier stages of disease—when treatment is more likely to result in improved survival—has become a strategic cancer planning priority in the UK, theBMJ noted.
“The NHS is committed to diagnosing 75% of all cancers at stage I or II by 2028, from around 50% currently,” the BMJ wrote. “Achieving such progress in less than a decade would be highly ambitious, even without disruption caused by the COVID-19 pandemic. In this context, considerable hope has been expressed that blood tests for circulating free DNA—sometimes known as liquid biopsy—could help achieve earlier detection of cancers.”
The Guardian noted that the UK’s initiative will use a liquid biopsy test made by Swiss-healthcare giant Roche.
“We can’t guarantee that we will find a fault in the genetic code of every cancer patient we recruit, or that if we do, there will be a suitable drug trial for them,” Matthew Krebs, PhD (above), lead scientist of the NHS’ Target National pilot study, told The Guardian. “However, as we learn more about the genetics of cancer in this study, it will help doctors and scientists develop new treatments to help people in the future. Ultimately, we hope liquid biopsy testing will be adopted into routine NHS care, but we need studies such as this to show the benefit of the test on a large scale and provide the evidence that patients can benefit from being matched to targeted medicines on the basis of the blood test.” (Photo copyright: Cancer Research UK Manchester Centre.)
In her article “The Promise of Liquid Biopsies for Cancer Diagnosis,” published in the American Journal of Managed Care (AJMC) Evidence-based Oncology, serial healthcare entrepreneur and faculty lecturer at Harvard Medical School Liz Kwo, MD, detailed the optimism surrounding the “revolutionary screening tool,” including its potential for:
identifying mechanisms of resistance to therapies,
measuring remaining disease after treatment,
assessing cancer relapse or resistance to treatment, and
eliminating risk surrounding traditional biopsies.
The AJMC article estimated the liquid biopsy market will be valued at $6 billion by 2030. However, Kwo also noted that clinical adoption of liquid biopsies in the US continues to face challenges.
Welch compared the investor hype surrounding liquid biopsies to that of the now-defunct blood testing company Theranos, which lured high-profile investors to pour millions into its unproven diagnostic technology.
“Effective cancer screening requires more than early detection. It also requires that starting therapy earlier helps people live to older ages than they would if they started treatment later,” he wrote. “If that doesn’t happen, liquid biopsies will only lead to people living longer with the knowledge they have a potentially incurable disease without extending their lives. These people would be subjected to cancer therapies and their toxicities earlier, but at a time when they would otherwise be experiencing no cancer-related signs or symptoms.”
And so, while there’s much excitement about the possibility of a minimally invasive way to detect cancer, anatomic pathology groups and clinical laboratories will have to wait and see if the hype and hope surrounding liquid biopsies is substantiated by further research.
CDC advises clinical laboratories and microbiologists encountering C. auris to follow their own protocols before adopting federal agency guidelines
In July, the Centers for Disease Control and Prevention (CDC) warned healthcare facilities and clinical laboratories to be on the alert for Candida auris (C. auris) infections in their patients. An outbreak of the drug resistant and potentially deadly fungus had appeared in two Dallas hospitals and a Washington D.C. nursing home.
Since those outbreaks, researchers have studied with urgency the “superbug’s” emergence in various types of healthcare facilities around the nation, not just hospitals. Their goal was to discover how it was successfully identified and contained.
“Seeing what was happening in New York, New Jersey, and Illinois [was] pretty alarming for a lot of the health officials in California [who] know that LTACHs are high-risk facilities because they take care of [very] sick people. Some of those people are there for a very long time,” the study’s lead author Ellora Karmarkar, MD, MSc, told Medscape. Karmarkar is an infectious disease fellow with the University of Washington and formerly an epidemic intelligence service officer with the CDC.
“One of the challenges was that people were so focused on COVID that they forgot about the MDROs (multi-drug resistant organisms] … Some of the things that we recommend to help control Candida auris are also excellent practices for every other organism including COVID care,” she added.
According to Medscape, “The OCHD researchers screened LTACH and vSNF patients with composite cultures from the axilla-groin or nasal swabs. Screening was undertaken because 5%–10% of colonized patients later develop invasive infections, and 30%–60% die.
Medscape also reported that the first bloodstream infection was detected in May 2019, and that, according to the Annals of Internal Medicine study, as of January 1, 2020, of 182 patients:
22 (12%) died within 30 days of C. auris identification,
“This is really the first time we’ve seen clustering of resistance in which patients seemed to be getting the infections from each other,” Meghan Lyman, MD, Medical Officer in the Mycotic Diseases Branch of the CDC, told Fox News.
The graphic above illustrates how Candida auris is “spanning the globe,” The New York Times reported. Clinical laboratories that encounter this potentially deadly fungus are advised to contact the CDC immediately for guidance and to take proactive steps to prepare for the “superbug’s” arrival. (Graphic copyright: The Scottish Sun.)
Be More Proactive than Reactive in Identifying C. Auris, CDC Says
C. auris is a type of yeast infection that can enter the bloodstream, spread throughout the body, and cause serious complications. People who appear to have the highest risk of contracting the infection are those:
Who have had a lengthy stay in a healthcare facility,
Individuals connected to a central venous catheter or other medical tubes, such as breathing or feeding tubes, or
Have previously received antibiotics or antifungal medications.
It tends to be resistant to the antifungal drugs that are commonly used to treat Candida infections.
It can be difficult to identify via standard laboratory testing and is easily misidentified in labs without specific technology.
It can quickly lead to outbreaks in healthcare settings.
“With all this spread that we’ve been seeing across the country we’re really encouraging health departments and facilities to be more proactive instead of reactive to identifying Candida auris in general,” Lyman told STAT. “Because we’ve found that controlling the situation and containing spread is really easiest when it’s identified early before there’s widespread transmission.”
There continues to be concerns over this highly drug-resistant infection among hospital physicians and medical laboratories. “Acute care hospitals really ought to be moving toward doing species identification of Candida from nonsterile sites if they really want to have a better chance of detecting this early,” Dan Diekema, MD (above), an epidemiologist and clinical microbiologist at the University of Iowa, told Medscape. (Photo copyright: University of Iowa.)
Candia Auris versus Other Candida Infections
C. auris can cause dangerous infections in the bloodstream and spread to the central nervous system, kidneys, liver, spleen, bones, muscles, and joints. It spreads mostly in long-term healthcare facilities among patients with other medical conditions.
The symptoms of having a Candida auris infection include:
Fever
Chills
Pain
Redness and swelling
Fluid drainage (if an incision or wound is present)
General feeling of tiredness and malaise
C. auris infections are typically diagnosed via cultures of blood or other bodily fluids, but they are difficult to distinguish from more common types of Candida infections, and special clinical laboratory tests are needed to definitively diagnose C. auris.
Whole-genome Sequencing of C. Auris and Drug Resistance
The CDC conducted whole-genome sequencing of C. auris specimens gathered in Asia, Africa, and South America and discovered four different strains of the potentially life-threatening Candida species. All four detected strains have been found in the United States.
There are only three classes of antifungal drugs used to treat Candida auris infections:
However, 85% of the infections in the US have proven to be resistant to azoles and 38% are resistant to polyenes. Patients respond well to echinocandins, but more effective therapies are needed especially as some isolates may become resistant while a patient is on drug therapy, STAT reported.
“Even while it might be susceptible upfront, after a week or two of therapy, we may find that the patient has an infection now caused by an isolate of the same Candida auris that has become resistant to the echinocandins and we are really left with nothing else,” Jeffrey Rybak, PhD, PharmD, Instructor, Department of Pharmaceutical Sciences, St. Jude Children’s Research Hospital, told Infection Control Today.
Although relatively rare, C. auris infections are on the rise. The good news is that there may be further pharmaceutical help available soon. New antifungal agents, such as Ibrexafungerp (Brexafemme) show promise in fighting C. auris infections, but more research is needed to prove their efficacy.
What Should Clinical Laboratories Do?
The CDC stresses that clinical laboratories and microbiologists working with known or suspected cases of Candida auris should first adhere to their own safety procedures. The CDC issued guidelines, but they are not meant to supersede the policies of individual labs.
The CDC also recommends that healthcare facilities and clinical laboratories that suspect they have a patient with a Candida auris infection immediately contact the CDC and state or local public health authorities for guidance.
