The health of ailing biotech start-up Theranos took a turn for the worst last week, when the Centers for Medicare & Medicaid Services imposed numerous sanctions on the firm following a review last year of its laboratory operations, which uncovered numerous compliance violations.

Jaclyn Jaeger is a freelance contributor to Compliance Week after working for the company for 15 years. She writes on a wide variety of topics, including ethics and compliance, risk management, legal,...