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Health Regulators Are Investigating Theranos's Blood Test Technology The investigations follow complaints filed by two former Theranos employees, casting even greater doubt upon the honesty and accuracy of the $9 billion blood test startup.

By Geoff Weiss

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Following complaints by two former Theranos employees, the U.S. government is investigating claims that the beleaguered blood startup forged ahead with faulty testing and employed questionable lab protocols, casting greater doubt upon its proprietary technology, which purports to conduct a wide range of tests using a mere finger prick of blood.

The first complaint, filed to the Centers for Medicare and Medicaid Services (CMS), a federal health agency, alleges that managers at Theranos told staffers to continue using its technology in 2013 and 2014 despite the fact that it derived "radically different results" in the span of a single day, according to The Wall Street Journal, which was first to report both complaints.

The former employee also told CMS that, until as recently as May, Theranos had diluted the tiny samples of blood it collects to create a larger sample that it could then run on a traditional lab machine -- a practice experts say can result in error.

With regard to the CMS complaint, a Theranos spokesperson told the Journal that the company had not been provided with "a copy of any alleged complaint, so we have no basis to evaluate what is in it or even if a complaint has been filed."

Related: Safeway Seeks to Dissolve Secret $350 Million Deal With Beleaguered Blood Startup Theranos

The second complaint, sent to the Food and Drug Administration (FDA), alleged that the company's approved test for herpes, which is the only test it can currently conduct using its proprietary technology, was attained using imprecise lab practices. The former employee said that Theranos underreported how often its machines broke down during the process, and added that crucial parts of its devices were modified during the test.

With regard to this complaint, Theranos founder Elizabeth Holmes has previously denied diluting samples, after an exposé by the Journal last October dredged up many of the same allegations. At the time, Holmes told the Journal that "it's just not possible to dilute a sample and put it on to a commercial analyzer."

Theranos also told the Journal that it adhered to protocols in submitting its herpes test to the FDA. Buchanan called the former employee who filed the complaint "disgruntled" and "uninformed."

Theranos, formerly a darling of the startup world with a valuation of $9 billion, has seen its reputation punctured in recent months as its accuracy and honesty have come under fire. Thirty-one-year-old Holmes, who is the world's youngest self-made billionaire, has orchestrated a bold PR coup and restructured the company's illustrious board in a bid to attain FDA approval and refute the potentially damning press.

Geoff Weiss

Former Staff Writer

Geoff Weiss is a former staff writer at Entrepreneur.com.

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