US bans Theranos CEO Elizabeth Holmes from running labs for 2 years

Elizabeth Holmes, founder and chief executive officer of Theranos Inc., at an interview in San Francisco, California, on, Oct 6, 2015.
Elizabeth Holmes, founder and chief executive officer of Theranos Inc., at an interview in San Francisco, California, on, Oct 6, 2015. PHOTO: BLOOMBERG

NEW YORK (AFP) - US regulators have banned Elizabeth Holmes, the founder and chief executive of Theranos, from operating laboratories for at least two years, the troubled blood-testing company said late Thursday (July 7).

Theranos said that the Centres for Medicare & Medicaid Services (CMS) had imposed sanctions on the company after finding problems at its Newark lab in northern California.

Theranos has been under investigation by civil and criminal authorities for months amid questions over the reliability of its innovative blood tests. The Silicon Valley startup says its technology delivers quicker, less expensive blood-test results than traditional laboratories.

Theranos said that the CMS sanctions revoke its federal license for lab testing of human specimens at the Newark facility, including "a prohibition on owners and operators of the lab from owning, operating or directing a lab for at least two years."

The CMS also cancelled the laboratory's approval to receive payments for lab services from Medicare and Medicaid, the government health insurance programmes for seniors and low-income people.

"We accept full responsibility for the issues at our laboratory in Newark, California, and have already worked to undertake comprehensive remedial actions," Holmes said in a statement.

"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."

Theranos said it would continue to provide services to its customers through its Arizona lab.

Founded in 2003 by Holmes, then 19, Theranos made the young entrepreneur a billionaire. The company came under scrutiny after The Wall Street Journal late last year published articles questioning the reliability of its technology.