failures. Normally, two such failures in a row would have been cause to
take the devices off-line and recalibrate them. Moreover, Do wasn’t
even authorized to be in the clinical lab. Unlike Erika, she didn’t have
a CLS license and had no standing to process patient samples. The
episode left Erika shaken.
—
LESS THAN a week later, Alan Beam was chatting nervously in Jurassic
Park, the upstairs lab, with a female inspector from the Laboratory
Field Services division of the California Department of Public Health.
The Theranos lab’s CLIA certificate was nearly two years old and up
for renewal, which required the lab to pass an inspection. The federal
Medicare agency outsourced these types of routine inspections to state
inspectors.
Sunny had let it be known that no employee was to enter or exit
Normandy during the inspection. The stairs that led to the downstairs
room were hidden behind a door that could only be opened with a key
card. Alan and other members of the lab interpreted the directive as a
clear signal that Sunny didn’t want the inspector to inquire about what
was behind the door. The inspector spent several hours in the upstairs
part of the lab and found some relatively minor problems that Alan
pledged to correct promptly. Then she was gone—unaware that she
had missed the part of the lab that contained the company’s
proprietary devices. Alan didn’t know whether to be relieved or angry.
Had he just helped hoodwink a regulator? Why was he being put in
this position?
In the days following the inspection, Sunny ordered a switch from
regular venous draws to finger-stick draws for dozens of the blood
tests Theranos was offering in Walgreens stores, not just the four
performed on the Edisons. That meant that the system Daniel Young
and Sam Gong had jury-rigged with the Siemens ADVIAs would now
be used on regular patients. It didn’t take long for problems to surface.
Elizabeth and Sunny had decided to make Phoenix their main
launch market, drawn by Arizona’s pro-business reputation and its