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Q&A: Regulatory Expert Karen Becker Provides Context for Theranos, FDA Interactions

NEW YORK (GenomeWeb) – The recent flurry of press coverage on lab-testing startup Theranos has raised public awareness of a fact that should be no surprise to the diagnostics industry: navigating the complexities of the Food and Drug Administration is currently fraught with uncertainty and setbacks.

In the wake of an investigative article published last month in the Wall Street Journal that alleged its proprietary blood-testing technology had serious flaws, Theranos has faced a wave of scrutiny by media outlets that have questioned its technology and demanded it publish data to back up its claims. While some lab testing experts have previously expressed skepticism about the company's ability to deliver on its promises, these critiques were published in peer-reviewed journals and didn't have the broad reach or impact of the WSJ article.

In an online defense of its technology and methods, Theranos took issue with the WSJ's coverage, noting, among other critiques, that the paper misunderstood its regulatory interactions with the FDA. And while it's impossible at this point to know whether the company's technical and analytical claims are true, it is evident that there is a great deal of confusion in the media surrounding its regulatory efforts, particularly in light of the FDA's evolving stance on lab-developed tests.

For example, the WSJ reported that, following a surprise inspection, the FDA "pressured" Theranos to stop using its Nanotainer blood-collection tubes for all but one herpes test that the agency cleared over the summer, but the company claimed this was a voluntary action as it works with the agency to transition its tests from the LDT framework to the FDA quality systems framework. Theranos also alleged that the WSJ "confused" its Nanotainer tubes with its analytical systems, which makes the decision to migrate the tube operations to the FDA QSR framework "sound like something it is not."

Perhaps exacerbating the confusion, Theranos has yet to release any details of its technology beyond what's available as part of FDA's approval of its HSV-1 test in July. More recently, the FDA posted two Form 483s (available here and here) detailing deficiencies it found during inspections from Aug. 25 to Sept. 16. One of the observations was that Theranos had mislabeled its Nanotainer tubes as a Class I device, when in fact the FDA had deemed them a higher risk Class II device. The reviewer noted further that the company was shipping the uncleared medical device in interstate commerce.

Theranos declined to respond to GenomeWeb's questions seeking further clarity on its technology and its regulatory strategy, but the company's public relations firm suggested we speak to Karen Becker, managing director of translational and regulatory sciences at Precision for Medicine, a company that helps drug and life sciences firms develop and commercialize their products.

Becker said she has no financial or other ties to Theranos and was unsure why the PR firm recommended her beyond the fact that she's a well-regarded expert on regulatory matters. Below is an edited transcript of the interview.

There's been a lot of confusion about the underlying technologies Theranos uses in its lab. Some say Theranos is using mostly standard technology. Theranos says it's still using proprietary technology, and there is confusion over its Edison system and Nanotainer tubes. What can you tell from publicly available information about what the Theranos system comprises?

The FDA review documents — the memo and the 510(k) summary — explain pretty clearly that the platform comprises a series of proprietary components that are not just specimen collection but also the chemistry, the instrumentation, and the software. There is definitely that proprietary system. But also from their website and what they've said publicly, Theranos maintains a complex CLIA lab where they are using standard technologies or commercially available technologies. So, not all of their tests are run on this proprietary system. I don't know which ones are or aren't.

They got 510(k) clearance for the HSV-1 test, which FDA deemed to be substantially equivalent to a predicate device: Focus Diagnostics' HerpeSelect1 and 2 Immunoblot IgG. FDA's posted documents described Theranos' test as a chemiluminescent immunoassay, which is not a novel technology. But then, as you note, the FDA documents also refer to this Theranos system, which the company claims is proprietary and novel. So, why wouldn't Theranos have to get a de novo 510(k) clearance instead of a 510(k)?

So, as you know, the FDA usually shows up unannounced. That's part of why the system works so well.

I think you're asking an interesting question. You're saying, 'How come if their [system] is so novel they can use the 510(k) route?' So, it is novel and by my analysis there are three basic things that are different from the predicate [device] here. The specimen that's used is different, which is finger stick versus venous serum. Theranos' assay is chemilumenscent and the predicate is a nitrocellulose immunoblot. And the third difference is Theranos' system is automated and the predicate is manual. So, there are differences in chemistry, hardware, and software.

The FDA required Theranos to do extensive testing to confirm that these changes don't have an adverse impact on the assay, and to make sure the system is accurate and reliable as labeled. So, how can this be a 510(k) if this is so different? The thing is, these are really incremental innovations. That's really what the 510(k) system is designed to handle. These are incremental innovations where the changes don't raise new types of questions about the safety or effectiveness. This means from the FDA's perspective and the framework we work in, the agency understands what kind of testing is needed to assure that these products are safe and effective.

So, from that perspective, the technology is novel, but from the regulatory perspective these are incremental innovations that didn't require a de novo.

I think the most novel aspect of Theranos as a company is their business model. I think that's what sparks a lot of interest in them, as well as some questions and concerns in the diagnostic industry. For one thing, Theranos is posting its test prices online and they charge the same amount for their tests to anyone that asks versus the big labs that have pricing schemes based on who the customer is. They're not posting their prices online [like Theranos], and plus, Theranos prices are less. That's one example of how the business model is novel. And the technology I would say is a more incremental innovation.

The FDA has said that the marketing strategy for testing, for example, when selling genetic tests directly to consumers, does factor into how it thinks about risk. Do you think the FDA would care about Theranos' model [targeting pricing to the consumer market] from a risk standpoint?

I would say no, except if they're marketing directly to consumers in a way that FDA thinks presents some new risk. But the FDA hasn't said that about them.

Theranos has said it's looking for general clearance for the Nanotainer tubes. What does this mean from a regulatory review standpoint? The current clearance means that they can use the Nanotainer tubes only for the HSV-1 test, correct?

Yes, that's right. A general clearance would mean that these collection tubes could be used without being tied to a specific test. There are other tubes cleared by the FDA — vacutainer tubes and capillary collections tubes that are not tied to a particular test. So, that's what Theranos has said they want to do.

What kind of data will they have to submit for a general clearance?

They would need data similar to what they've already submitted for the HSV-1 test. FDA would look to the predicate devices where there are cleared capillary collection tubes for hematology, for example, and require the same types of testing. But I don't really know their regulatory strategy or how they're going about trying to achieve that. 

The FDA's inspections of Theranos' lab have raised a lot of interest. What do you think the inspections were about, based on publicly available documents? The WSJ wrote that "Food and Drug Administration inspectors recently showed up unannounced at Theranos." Does the FDA usually call ahead before coming to visit?

So, as you know, the FDA usually shows up unannounced. That's part of why the system works so well. You have to be maintaining your quality systems and compliance at all times. You never know when the FDA is going to show up. I didn't see anything in these Form 483s to suggest that these were anything other than a routine inspection. This often happens right after a company gets clearance for a product and they first register and list on the FDA database. FDA puts them on the list and they go out and do their first inspections.

Did you raise your eyebrows over any of the issues the reviewers identified in the Form 483s?

Actually, I thought there weren't very many observations considering the agency was there for several weeks. The observations listed were pretty typical of what you would expect of a lab transitioning from CLIA to the FDA quality system mode. They look fairly straightforward and minor in scope to me, because many of them were addressed right there at the time of the inspection. Then, they agreed with the investigators to provide responses to the others in seven days. So, that doesn't look like to me they had any deep or systemic quality system problems that couldn't be readily addressed.

From the Form 483s can you infer any problems with Theranos' underlying platform technology? Do you have a sense of what specific device they were concerned about?

My read on this was that FDA reviewers were really focusing on the Nanotainer tubes. The inspection was related to their quality systems processes. It wasn't a review of the accuracy or reliability of their platform. That's what the HSV-1 test clearance was all about: FDA reviewing and validating the underlying technology.

One of the issues cited by FDA reviewers was that Theranos was marketing the Nanotainer tubes as Class I devices and FDA had deemed it Class II. Does that raise any red flags?

I can’t comment on specifics since I have no direct knowledge of the discussions. But it is important to be aware that the Form 483 does not reflect an official agency determination. In any case, Theranos is not using the Nanotainer tubes, except for their cleared product, until discussions on this point with FDA are resolved. That is a conservative approach.

In response to the WSJ article, Theranos suggested that they stopped using the Nanotainers because it was too difficult to do so under both CLIA and FDA quality systems regulations. Does that sound reasonable to you?

I am not sure I read that. I don't know, but I'd say it's reasonable when you're having a debate with FDA about the regulatory status of a product, it's pretty standard to just cease marketing the product. So, while the discussions are going on there can be a focus on a solution that makes all parties happy … Is there are quote [from Theranos]?

Theranos said in a statement responding to the WSJ articles: "In our discussions with FDA, we determined that it was appropriate to temporarily pause use of the Nanotainer tubes for all tests except our cleared HSV-1 test as we now cut over to FDA quality systems and wait for clearance. This transition is part of converting all our operations from the LDT framework to the FDA framework, because it is not possible to operate under both the CLIA lab and FDA quality framework at the same time." 

I understand this to mean that the company is committed to having the Nanotainer collection tube regulated by FDA as a medical device. Ceasing to use it until they have clearance removes any ambiguity about what quality system applies to the Nanotainer tubes.

Can they be FDA- and CLIA-compliant at the same time? Meaning can they operate a complex CLIA laboratory and also have some of their tests be FDA-regulated tests? Yes, some labs do that. It's fairly common, but that does not seem to be the stated goal of Theranos.

Peer review of device performance is a good thing.

Myriad Genetics had to build a whole new lab to separate its CLIA tests from its FDA-approved companion test.

That's a whole different regulatory environment. Myriad's companion diagnostic is a Class III medical device, and controls over the manufacturing and changes to the manufacturing processes are much greater for Class III devices than Class II. Within the device industry, it's well known that the cost, effort, and the systems needed to be in compliance are more onerous for Class III devices. Many companies segregate their systems physically and operationally if they have Class II versus Class III products.

But I don't think that applies here to Theranos, because FDA has already determined that the platform can be regulated as a Class II device.

You don't have any financial relationship with the company. But if Theranos had been one of your clients, is there any area that you think they could have done better or differently in dealing with the FDA?

Despite all of this press, in my opinion they've dealt effectively with the FDA. I base that on the fact that they have clearance for their entire proprietary system with the HSV-1 test, and they got their CLIA waiver, and I felt the observations from their inspection were to be expected.

The one variable that none of us can predict or control is FDA policy on lab-developed tests. The policy is in a state of flux, and the agency has been ambiguous about when and in what circumstances it's going to engage in enforcement discretion. It's a public policy debate that goes back for decades. FDA has a guidance out proposing how they're going to regulate LDTs, but the House and the Senate are both considering new legislation for regulating LDTs.

It's important to consider that this particular company is in the midst of an unusually complex regulatory environment that's rapidly changing. It's difficult to know which way the agency is going to go on certain things. I think Theranos hasn't gotten enough credit for being proactive. Even though they didn't need to, they went to the agency voluntarily a few years ago with the expressed goal of getting all their LDTs cleared by the FDA.

Theranos maintains it has been transparent. Do you think they have been?

I think they have been transparent in that even though they didn't need to, they went to the FDA to begin the process of getting all their tests cleared. They've even come out in favor of FDA's LDT regulation even though most of the clinical labs have not.

The question of peer review is an interesting one. Peer review of device performance is a good thing. But all innovative medical device companies guard the specifics of their proprietary technology. You have to. That's your intellectual property. I don't think it's a fair criticism to say that they haven't been transparent about revealing the details of their proprietary technology. No medical device company would. That's what FDA is there for. The regulatory process makes it possible to validate the underlying reliability of these new technologies in a confidential way and it's a very high standard.

So, this question of has Theranos been transparent is being answered and will be answered if they go forward and get FDA clearance for their products.