Theranos and COVID-19 are connected
When adjusting new diagnostic technology, it’s difficult to balance speed and safety.
Last week, prosecutors and defense lawyers made opening statements in the criminal trial of Elizabeth Holmes, the former CEO of Theranos, who is accused of defrauding investors and patients with false promises of quick and inexpensive blood tests. The next day, the Biden administration announced a $ 280 million purchase plan quick and inexpensive COVID-19 tests-an action for which some legislators have been defending for over a year. The coincidence of these two events reveals an unresolved tension in healthcare: how do you balance the risks of disruptive innovation with the deadly costs of administrative inertia?
The Theranos and COVID-19 tests are both edifying tales of medical surveillance failures, but the moral does shift from case to case. Each deals with, in its own way, the control that the FDA should exercise over laboratory tests before they are put on the market. COVID-19 testing epitomizes the agency’s risk aversion instincts. During the first months of the coronavirus pandemic, the FDA notoriously deferred private laboratories to develop their own COVID-19 tests. This allowed the coronavirus to spread most of the time undetected and demolished any early possibility of eradicating the virus in the United States. The agency was also accused of block approval rapid tests for home use. (The first one over-the-counter device was only allowed in December.) Now that home testing is available in pharmacies, some deregulation advocates are complain again. Germany has at least 60 such devices in circulation, for example, and some cost less than $ 1. The United States only has six, which sell for over $ 10 each (when in stock).
The History of Theranos unfolded a few years before the pandemic as the regulatory mirror image of these events – with Big Government as the hero. Theranos began collecting patient samples through its Walgreens wellness centers in 2013. At its peak, in 2014 and 2015, the company generated 890,000 results per year – tens of thousands of which society would later admit were wrong. Yet Theranos only received FDA clearance for one only one type of test out of the hundreds he executed. In the end, it was the FDA that took the first real action against the company. By declaring his blood collection tube “nanotainer” a unauthorized medical device, regulators were able to prevent thousands more patients from receiving potentially inaccurate diagnostic results.
At the center of the controversies both over Theranos and the COVID testing was a bureaucratic dead zone around what is called “tests developed in the laboratory, ”Or LDT. Because of legislative ambiguity, the makers of these tests, which are designed and used in one location rather than sold to healthcare providers across the country, can avoid careful evaluation by the FDA. Instead, the surveillance comes from the Centers for Medicare and Medicaid Services, which perform routine inspections of all labs every two years. This type of retrospective audit usually works very well; there are many important LDTs in common use, including almost all genetic tests. But in rare cases, like Theranos, a lot of damage can occur between inspections or if those responsible are intentionally misled. Former employees accused Theranos of hiding its proprietary devices inspectors, and the company ended up failed an inspection due to poor quality control procedures. Officials from the Centers for Medicare and Medicaid Services have concluded that these impairments put patients at immediate risk, and revoked the company’s laboratory licenses in 2016 and 2017.
With the onset of the pandemic, the FDA was able to use special powers to close the LDT loophole. After the health and social services secretariat declared a public health emergency on February 4, 2020, any lab wishing to evaluate patient samples for the coronavirus with their own in-house procedures would need FDA approval first. The then FDA commissioner, Stephen Hahn, noted this tighter leash on LDTs ”has balanced the urgent need to make diagnostic tests available with a level of oversight that ensures accurate tests are being deployed.” But the process put in place by his agency turned out slow and cumbersome: This required pathologists to spend hundreds of hours filling out documentation before using their tests for clinical care. In March 2020, the policy was relaxed in the face of widespread criticism, then abolished this August.
The FDA’s policy on COVID testing may have been a failure, but that doesn’t mean Hahn’s defense was empty rhetoric. The Holmes trial serves as an important counterfactual: The same emergency protections that slowed test availability in early 2020 had also prevented Theranos from deploying potentially inaccurate information. Ebola and Zika tests half a decade earlier. Fraud remains a real concern throughout disaster. The ever-present tension between the speed and reliability of medical testing even played the role of an ironic conspiracy at the start of the Holmes trial. The procedures were deferred the second day after a juror was potentially exposed to the coronavirus. Although the juror would have received negative rapid test results, the court decided to wait for the results of a traditional laboratory analysis. Holmes, who once vowed to shake up the old-school lab industry with it magic device, was now at the mercy of the industry.
It was ultimately left to Congress to find the right balance in regulating diagnostics. Competing bills to promote safety and access to laboratory tests, called VALID and VITAL Laws, are currently following the legislative process. The VALID Act would allow the FDA to regulate more tests developed in the lab, and the VITAL Act would do the opposite, preventing the FDA from overseeing LDTs, even in a public health emergency. As with many contentious political issues, however, there’s a good chance Congress will do nothing at all.
Holmes herself was a master at exploiting political conflict. She publicly supported greater scrutiny by the FDA even as it flouted existing requirements. Increased surveillance would have been disastrous for his business; the real purpose of Holmes’ endorsement may have been to signal righteousness, engender public confidence, and swallow up new investment. More recently, we have seen that in the midst of a deadly viral epidemic, all political issues take on moral significance. Sloppy testing, for example, can be seen as the “original sin” of the US response to the pandemic. Any action the FDA might take, whether it’s approving drugs for Alzheimer’s disease or slow COVID-19 vaccines for children– is absorbed in a great battle between sinners and saints, disturbance and stagnation. But the best public policy will have to accommodate the existence of both.