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Is the Government Trying to Stamp Out Cheap Medical Testing Technology?

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The government claims it wants to bring down medical costs and also make Americans healthier. But does it really? Or is it mostly interested in creating and protecting medical monopolies that can lead to big campaign donations? Action Alert!

The innovative blood testing company Theranos is now facing even harsher sanctions from the Centers for Medicare and Medicaid Services (CMS). We at ANH-USA have been following this story of lab-testing innovator Theranos for some time. We are not only concerned here with crony medicine. Cheap and reliable testing is absolutely vital for natural medicine.

The company is in the process of perfecting blood-testing technology that is cheaper, faster, and more convenient for consumers. The basic idea is simple—create testing technology that would allow individuals to keep tabs on their own health at a fraction of the cost and inconvenience of traditional blood testing.

Unfortunately, for the past year or so, the company has been hit with attack after attack from federal regulators (see our recent articles for more background).

The most recent actions come from CMS. After the agency inspected Theranos’s facility late in 2015, it sent a letter in January 2016 detailing a number of supposed deficiencies that were found in one of the company’s labs.

Theranos responded in February with a plan to address the alleged deficiencies, but CMS shot back in a letter dated March 18 that Theranos had failed to address 43 out of 45 deficiencies that had been identified by their inspectors last year. In the March letter, CMS stated that it intends to revoke the California lab’s license and prohibit Elizabeth Holmes, the founder, chairman, and CEO of Theranos, from owning or running any other lab for at least two years. In the world of lab testing, this is unprecedented and clearly intended to destroy Theranos.

Theranos was given ten days to respond to CMS’s letter and offer evidence as to why the sanctions should not be imposed. According to the Wall Street Journalwhich has been stoking this fire—Theranos has indeed responded, and CMS is determining its next move.

This isn’t the only threat to the medical testing field. As we’ve reported previously, the FDA has also been throttling innovators in medical testing and is looking to expand its regulatory power over the field by regulating tests as medical devices—a move that members of Congress have vehemently denounced.

We suspect that the pretext for all of this is to protect hospitals, which have invested heavily in medical testing and derive much revenue from it. Hospitals partner with the government in myriad ways and get all sorts of monopoly benefits from it. For example, a doctor employed by a hospital, even if outside the hospital, will often receive a much higher fee from Medicare for a particular medical procedure or service.

Government is also friendly with two independent companies, LabCorp and Quest Diagnostic. The two enjoy a virtual monopoly over medical testing outside of hospitals. The numbers speak for themselves: according to OpenSecrets.org, Quest Diagnostics spent $640,000 on lobbying efforts in 2013; LabCorp spent $340,000; and the Federation of American Hospitals spent $3,260,000. This money was specifically spent on lobbying; there were also many, many campaign contributions.

What happens to medical testing in general, and to innovators such as Theranos in particular, has enormous implications for the future of natural medicine.

Consider the world that a company like Theranos could make possible. Chronic diseases could be caught early and monitored like they never could before. With the speed and convenience of this testing, more individuals would be empowered to take control of their health. For instance, a person might read an article about the importance of vitamin D in the morning and, on the spur of the moment, pop in to a nearby drug store the same afternoon to get an inexpensive vitamin D 25-OH test, thus providing a near-immediate answer to the question of their own vitamin D level. Or, rather than a hypothyroid patient going to an endocrinologist every few months to measure hormone levels, a patient can simply stop into a Walgreens and get the routine blood work they need to manage their condition.

We don’t actually much like the Walgreens model. Better still would be to do the testing in the privacy of your own home. But Theranos decided to work with Walgreens, hoping that by allying with such big company, it would buy some protection. That clearly did not work, and Walgreens has now backed away from the relationship.

If you have ever tried to convince your doctor of why a certain test is needed, or if you’ve experienced the cost of traditional testing in both time and money, you’ll appreciate the approach being pioneered by Theranos and other innovators. We must do what we can to defend innovators from those who want to use government regulation as a weapon to kill competitors, especially competitors offering a cheaper product.

Action Alert! Write to FDA and tell them to back off lab-testing innovators! Please send your message immediately.

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  • eyesandears

    I’m considering that this may be a result of the existing trade agreements. A corporation is able to sue the government for allowing the existence of those ‘impediments’ which cut into their profits. Hence, the government acts to squash the competition to avoid being sued. Trade agreements simply allow corporations to run ship-shod over anything getting in their way, and turns governments into their handmaidens.

  • Evan Eberhardt

    Good article. I have been watching this one play out as well. The media has been all over Theranos lately, but never with any specifics about what exactly the problem is. New technology will have some bumps along the way and everyone knows this, but for Theranos it’s some huge scandal? Yeah, right. This has typical powers-that-be tactics all over it (government shills finding stuff wrong, most of it fictitious I have no doubt, and then the media somehow picking up on these stories and repeating them until the target is destroyed). Plus, just how impossible is this technology anyway? Like simplifying and shrinking body fluid testing is that outlandish for some reason? Nonsense. If medicine was as unencumbered as electronic technology is, it would be just as advanced. Look how rapidly TVs; from heavy cathode ray tubes to OLED technology that is superior in every conceivable aspect all the while getting cheaper. Nope, in medicine, we are still basically using the equivalent of black-and-white TV’s with rabbit ear antennas and paying more for them than ever.

    I take special offense to this case because I have problems with veins blowing during blood draws (I even had a needle shock incident once and had to lie on the floor for 30 minutes before my BP came back up – not fun stuff). I am not fond of finger pricking either, but it would be preferable to the standard blood draw. I am also a curious type and like to get numbers for myself (like vitamin D) and I think Theranos had it for much cheaper than other labs. Such technology should be supported, but instead it gets attacked.

  • The00Dustin

    The only media article I have read about Theranos indicates that they often aren’t actually using the technology they delivered and are instead diluting the samples that are too small to get accurate results before sending them off to traditional labs, leading to inaccurate results. IIRC, the article may have also indicated that tests using their technology were inaccurate. While I participate in many ANH-USA action alerts, that article seemed to have more relevant information than this one did, and unprecedented or not, the FDA’s actions here may be justified.

  • Robert Cruder

    It turns out that Theranos is a scam and its founder’s wealth went from an estimated $4.5 B to $0.

    Simply contradicting established medical opinion may build audience but rarely finds truth.