Although the future of blood-testing start-up Theranos is in doubt, its technology may live on, regardless of what happens to the company.
Last week, Theranos said that it received notice from the Centers for Medicare and Medicaid Services imposing sanctions as a result of deficiencies in laboratory practices, qualification of personnel and inaccurate reporting uncovered in an earlier investigation.
The main sanctions won't go into effect for 60 days, but Theranos will be fined $10,000 per day starting Tuesday, until it can verify that it has corrected all the deficiencies.
As a result of this ruling from the federal government, Theranos will shut down and not conduct testing at its flagship Newark, Calif., lab, and Chief Executive Elizabeth Holmes will be banned from operating a diagnostic lab for two years.
The company will continue to provide services to its customers through its Arizona lab, however.
Holmes founded Theranos in 2003, and she became an industry superstar, hoping to facilitate the early detection and prevention of disease through small capillary blood sample detection. This was expected to reduce patient discomfort and significantly reduce the cost of laboratory analysis.
Three class actions have been filed against the company claiming consumer fraud and false advertising. Theranos has also been the subject of investigations by the Securities and Exchange Commission, the U.S. Attorney's Office in San Francisco, and federal and state health regulators.
Although this all may spell doom for Theranos, the technology still has merit.
As reported by Bloomberg, the government's review pertained to the operations of the company's California laboratory, not its technology.
Theranos' last contribution is the ability to detect a blood compound using a smaller amount of collected sample.
The average person doesn't think about the amount of time and money it takes to collect, process and transport biological samples. At times, this can be life threatening.
But any improvement in the chain of collection, transport, processing and reporting is considered revolutionary.
Theranos brought attention to what may be the next generation of clinical lab analysis, but what isn't clear is whether this technology will come to fruition under this company or a new start-up that can operate with a clean slate.
If nothing else, at least Theranos offers MBA students a case study that will last through the ages.
This article is commentary by an independent contributor.