Rob Stein’s never-ending series on Theranos is finally coming to an end and with a bang. In this week’s issue, Elizabeth Holmes is being tried and convicted on 13 counts of fraud and malice. According to CNN, she also faces criminal charges over drug company deal with the US Department of Justice.
In a New York Times report published this week, Theranos’ former employees and directors of its labs detail how Theranos “had no drug testing testing equipment”, how her move to replace the blood tests done with Theranos-created technology with Theranos-created technology brought the company crashing and burned, and how co-founder Holmes tried to cover-up her failures. It’s a fantastic story that you don’t want to miss. If you’re not familiar with Armstrong, K and Thaler’s book, Theranos’ story is simple: Elizabeth Holmes wanted to build an innovative blood testing company that would offer patients better tests than what the old FDA-regulated labs could do, and would have done so using cutting-edge technologies that couldn’t have been done safely by the old FDA standards (in favor of things like “smart thermometers”).
That’s what this story is about. A brilliant and ambitious young woman selling to a public in need of change, selling the high-tech promise of effective diagnostics. It’s been about eight years since this amazing story began with Theranos testing a baby’s first blood, back in 2010. The story is that Theranos tested hundreds of samples, shipped by postal services, and “tested for 99 percent of all common diseases in less than six minutes”. But that could be about to change. On Wednesday, New York federal prosecutors filed a sealed indictment against Elizabeth Holmes, former CEO of Theranos, and chief scientific officer Robert J Holmes, her brother. The criminal charge against the Holmes family is that the pair defrauded investors, Federal health regulators, and the general public from investing in the company.
Let’s remember who Elizabeth Holmes is. Elizabeth is Elizabeth is Elizabeth is Elizabeth, one of the world’s most notable females biotechnology innovators. She’s accomplished so much at such a young age. She was just 23 years old when she was diagnosed with cancer and went back to school to study biology, a major in a major in the major of her choice. In 2015, she founded the enormously successful startup Theranos. She’s now 30 years old. Her story has been the subject of bestselling books, documentaries, and documentaries. She was the subject of an inspirational TED talk. She’s also been scrutinized and harangued. Her critics have accused her of being a narcissistic serial scammer.
You’ve heard her name lately, because the news that she is being tried and convicted on fraud and malice? Theranos and health regulators have accused her of taking many patients’ blood tests and selling them a solution that performed in no way the tests that Theranos said. The Federal Department of Justice has accused Holmes and her company of failing to comply with FDA regulations, therefore allowing unapproved products to be used to diagnose patients. You might remember that in 2016, Theranos had to stop using the technology that was supposed to make all of its drug tests more accurate. To provide people with accurate results, they used “off-label” tests. The Department of Justice has charged the Holmeses with “knowingly” violating state and federal laws.
In 2012, the Theranos CEO had a $120 million valuation on her company. It’s reported that the government is suing for approximately $100 million. Several investors are also suing for $21 million. Elizabeth Holmes was also charged with mail fraud for hiding important information about the company from investors, and mail fraud for falsely claiming that Theranos’ technology was FDA approved.
Theranos has also been accused of healthcare fraud for doing tests on patients’ own blood instead of their own collection of blood that is regulated by the FDA. In September, the Centers for Medicare and Medicaid Services (CMS) came out with a strongly-worded report explaining the reason why it had pulled the plug on Theranos’ blood tests. Though Theranos has an impressive facility, CMS ruled that there was no way to ensure the accuracy of Theranos’ blood tests (other than by doing a broader risk-to-benefit analysis), leading them to conclude that Theranos wasn’t authorized to do what Theranos was doing.
Theranos has tried to temper some of this criticism by saying that its technology is ready for prime time, and that new prototypes that are underway will drastically improve the accuracy and speed of the tests. Let’s remember however that it has taken a heroic effort to get to the point where Theranos can actually submit a