What Can We Learn from the Theranos Experience?

Theranos, a blood testing laboratory, has been the subject of media scrutiny after a number of articles were published in the Wall Street Journal. Since clinical testing laboratories are not usually regulated by the FDA, this article will provide a short history of what has happened and some lessons learned to consider for the future.

Theranos Background

Theranos was founded in 2003 with the mission to make actionable health information accessible to people everywhere at the time it matters[1]. The company pioneered much smaller blood samples and a different cost model. They established Theranos Wellness Centers to make it easier to access testing and apps to enable users to get their own test results.

Theranos wanted their tests to be approved by the FDA to show the technology and proprietary test technologies meet the same standards as existing in vitro diagnostic (IVD) tests. In July 2015, Theranos received a decision of substantial equivalence or 510(k) clearance for their Herpes Simplex Virus, HSV-1, test.

Like any company that has a cleared product, Theranos was now eligible for an FDA audit, which occurred August 25 to September 16, 2015. The 483 observations[2],[3] across 2 locations were consistent with a company that was unfamiliar with the quality management system regulations, including design controls and complaint handling (as defined in 21 CFR 820). In addition, the nanotube used to collect specimens was shipped across state lines to be used at all Theranos test collection centers. Therefore, it was determined to be a medical device.

Beginning in October 2015, the Wall Street Journal published several articles based on information from former employees. Those former employees describe specific actions that may be considered inconsistent with good laboratory practices. Since then, Theranos has also dealt with the business ramifications in its blood testing centers within Walgreens and parted ways with Safeway over planned centers.

Laboratory Developed Tests

Laboratory Developed Tests (LDT) are IVD tests that are developed, manufactured, and used in a single lab. The FDA has generally not enforced premarket review or other FDA requirements since they were simple tests using well characterized reagents and procedures. The other primary use of LDT has been for very rare tests that might be sent to a national center of excellence, such as Mayo. However, each test lab, under the Clinical Laboratory Improvement Amendments (CLIA), is responsible for its own technical standard and practices including quality and generating correct clinical results.

Lessons Learned

• LDT and IVD are regulated differently. Companies that intend to obtain FDA approval for their tests must integrate FDA regulations, especially design controls, into their product development process. Retroactively developing key elements of design controls will lead to 483 observations.
• Companies new to the IVD market should encourage and evaluate feedback from employees who have experience in clinical test labs or in developing IVD products.
• The success of any new entrant to the blood testing market is underpinned by the assumption of accurate test results. Once that is called into question, the rest of the business is suspect.

Closing Thoughts

I applaud the mission of Theranos and its mission to change access to testing. They have done a great job challenging the status quo. However, there is more to entering the test market than a great strategy. Between FDA and CLIA, test developers have a significant responsibility to ensure their tests work as planned.

[1] https://www.theranos.com/leadership

[2] https://www.fda.gov/ucm/groups/fdagov-public/@fdagov-afda-orgs/documents/document/ucm469396.pdf

[3] https://www.fda.gov/ucm/groups/fdagov-public/@fdagov-afda-orgs/documents/document/ucm469395.pdf