Dr. Nash Denic has stepped down as head of laboratory services at Eastern Health, Newfoundland and Labrador's largest health authority. (CBC)Dr. Nash Denic has resigned as head of laboratory services at Newfoundland and Labrador's largest health authority after a drug-testing fiasco in which lab officials are accused of reacting to the problem too slowly.

Eastern Health CEO Vickie Kaminski made the announcement at a news conference in St. John's on Wednesday. She said Denic will remain with Eastern Health but his new role has not been determined.

Two other lab staff members have come under special scrutiny. Kaminski said one has been given a desk job pending a review of his work and another has been given a letter of reprimand.

In late February, the health authority announced that hundreds of patients may have been given too much cyclosporine, a drug that can cause kidney damage in excess dosage.

An internal review of what went wrong, released Tuesday, found that a machine at the Health Sciences Centre in St. John's that measures blood levels of the drug was not properly calibrated.

Health Minister Jerome Kennedy says Eastern Health staff have been warned to follow policy or face the consequences. (CBC)People in the lab began raising questions about the results they were seeing in January. In mid-February the lab began reviewing all patients in the province receiving cyclosporine, an immunosuppressant widely used in organ transplants.

Kaminski said last week that she wasn't told about the problem until Feb. 19, when a 14-year-old receiving cyclosporine was admitted to intensive care in critical condition.

Kaminski confirmed the boy was given too much of the drug and as of Tuesday he was still in intensive care.

Health Minister Jerome Kennedy, who was also at the news conference, said the drug-testing errors have had a serious impact.

"Right now, my confidence is shaken," Kennedy said. "I will say to you today, there will be accountability and if I were sitting in a senior management job in Eastern Health right now, I'd be watching myself closely to ensure that I have…I know that I read Cameron and understand Cameron. I expect that there will be further changes…but the day is finished when people will not comply with basic requirements such as occurrence and adverse event reporting."

This latest lab trouble comes a year after an inquiry into errors at another Eastern Health laboratory.

The report on the inquiry into hormone receptor tests — for breast cancer patients — recommended sweeping changes of Eastern Health's laboratory services. The Inquiry, led by Newfoundland Supreme Court of Appeal Justice Margaret Cameron, emphasized the importance of formally documenting lab errors in occurance reports.

On Tuesday, an internal review of how errors occurred in cyclosporine testing said the lab didn't follow the health authority's occurrence reporting policies