Intro:

Imagine receiving crucial information about all your current and unforeseen health problems from a box-like machine, a machine among the most innovative and revolutionary to ever exist. Alongside, placing trust into the company worth  billions and all their hard-working employees, without knowing that the whole operation is actually a scam? That is exactly what occurred to millions of patients of the multi-billion dollar company Theranos, and this article will discuss what Theranos was, the fraud in which they were involved, and lastly, the colossal effects of their wrongdoings. 

What was Theranos?

Theranos was a company founded by Elizabeth Holmes, a Stanford dropout who was also the youngest self-made female billionaire and an almost “worshipper” of Steve Jobs, the legendary entrepreneur who founded Apple. The company was co-founded by her boyfriend, Sunny Balwani, at the time. Theranos was a private health and science business aiming to simplify and improve medical and science lab testing through innovative and reformed methods of blood drawing, blood testing, and patient data analysis.

Their revolutionary product, referred to as an edison, had thousands of investors, including established businesses such as Oracle, lining up to have a share in the company. You may be wondering: What is this contemporary device that was so revolutionary?

Here’s the simplified version. Holmes and her team at Theranos had a vision for the edison; they wanted the machine to be able to detect dangerous diseases and health issues, such as cancer and diabetes, all from a blood draw in the form of a simple finger pinprick. Sounds crazy, right? There are numerous health conditions humans battle on a daily basis, and testing and recovery involve extremely rigorous and time-consuming processes, so a simplified and convenient method to test though one machine was extraordinary.  In fact, the device could supposedly detect around 240 different health problems.

What did they do?

As mentioned above, Theranos’s operations were a hoax; however, their secretive business methods and overall illusion left little to no suspicion in the eyes of the public. On the contrary to general expectations, however, less than 100 of the 240 tests available were actually validated! In 2013, Walgreens, a large pharmaceutical company, partnered with them and implemented Theranos testing into 40 of their locations and sold more than 1.5 million blood tests, which yielded 7.8 million test results for nearly 176,000 consumers” (Peck, 2018)  in Phoenix, Arizona alone. This meant that millions of people who got tested through an edison received inaccurate results (for example, someone who was simply aging may have been diagnosed with bone cancer). It is imperative to note that Walgreens and the other sellers of Theranos testing weren’t necessarily aware of the malpractices. 

In addition, the edison itself was constantly facing flaws and errors from its imperfect, poor design. Due to the ineffective machines, Theranos’s employees were discovered to often rush through reports and provide predetermined results, meaning that the same reports were given to all patients. Currently, the Food and Drug Administration (FDA) and other health-care organizations do not check lab-related work and operations such as the ones Theranos was affiliated with. In other words, no one was checking for credibility in their work. On an even worse note (can it get worse?), Theranos was found to use testing technology developed by their competitors, which portrays how their priorities were all over the place.

Inside the company, Elizabeth Holmes and the rest of the board were ruthless bosses. If an employee questioned anything about the initiatives, or even criticized the leadership, they were either fired immediately or harassed within the workplace. Similarly, employee actions were constantly monitored and they had to face ridiculously high levels of security each day. For example, in 2005, a British biochemist named Ian Gibbons, appointed the Chief Scientist, was among the first to question Theranos. During his time at the company, he became very suspicious of the company’s operations, and after further research into the scandal, he started sharing his doubts with other employees both inside and outside of the business. In mid-2013, he received a phone call and was told that Holmes wanted to talk to him the next day, and within that week, the tremendous stress placed on his body resulted in his passing. The tragic incident that occurred with Ian Gibbons demonstrates the mental and physical fatigue that was involved with working at a corrupt business such as Theranos.

What were the effects?

The outrage after the death of scientist Ian Gibbons led to arising concerns from outside scientists and researchers all over the world. Subsequently, in August 2015, the FDA started investigating Theranos’s practices, and they soon found “major inaccuracies” in their testing (Hartmans, et al., 2020). A couple of months later, reporter John Carreyou started his own investigations into Theranos’s malpractices with their technology; his findings were documented in the bestselling novel Bad Blood: Secrets and Lies in a Silicon Valley Startup, a monumental component of the collapse of the business. Furthermore, Academy Award winner Alex Gibney created the documentary The Inventor: Out for Blood in Silicon Valley, which was nominated for an Emmy in 2019. Currently, after further scrutiny from governmental agencies for the past 5 years,  Elizabeth Holmes and her ex-boyfriend Sunny Balwani are facing federal trials, and they could both encounter up to 20 years in prison and almost 3 million dollar fines each. Holmes is also facing numerous lawsuits; however, most of these have been pushed to uncertain dates due to the pandemic.

Conclusion:

The horrific actions of Theranos have provided insights into the dark side of Silicon Valley and the emerging STEM field as well. At the Academies of Loudoun, it is crucial that as the future leaders of the STEM industry, we learn from the mistakes of our predecessors and work to foster change in an ethically and socially responsible manner, while still making our impact on the world. 

written by Raaga Kodali

edited by Saanvi Gutta and Tryphena Pilli

 

Resources:

Carreyrou, J. (2015, October 16). Hot Startup Theranos Has Struggled With Its Blood-Test Technology. The Wall Street Journal. https://www.wsj.com/articles/theranos-has-struggled-with-blood-tests-1444881901.

Dark Daily. (2018, August 31). Previously High-Flying Theranos Provides Clinical Laboratories and Pathology Groups with Valuable Lesson on How Quickly Consumer Trust Can Be Lost. Dark Daily. https://www.darkdaily.com/previously-high-flying-theranos-provides-clinical-laboratories-and-pathology-groups-with-valuable-lesson-on-how-quickly-consumer-trust-can-be-lost/.

Edeiken, Erin & Deeter, Jessie (Producers) & Gibney, Alex (Director). 2019. The Inventor: Out for Blood in the Silicon Valley. Retrived from https://www.hbo.com/documentaries/the-inventor-out-for-blood-in-silicon-valley 

Hartmans, A., & Leskin, P. (2020, August 11). The rise and fall of Elizabeth Holmes, the Theranos founder whose federal fraud trial is delayed until 2021. Business Insider. https://www.businessinsider.com/theranos-founder-ceo-elizabeth-holmes-life-story-bio-2018-4#it-soon-become-clear-that-the-pandemic-and-the-health-risks-associated-with-assembling-a-trial-would-make-the-july-trial-date-unrealistic-through-hearings-held-on-zoom-the-presiding-judge-initially-pushed-the-trial-back-to-october-and-has-since-pushed-it-until-march-2021-at-the-earliest-49 .  

HBO. (2019). Elizabeth Holmes and Blood. The Inventor: Out for Blood in Silicon Valley. photograph, HBO.  https://www.hbo.com/documentaries/the-inventor-out-for-blood-in-silicon-valley. 

Silva, J., & Lam, S. (2020). Elizabeth Holmes and Sunny Balwani. The rise and fall of Elizabeth Holmes, the Theranos founder whose federal fraud trial is delayed until 2021. photograph, Business Insider. https://www.businessinsider.com/theranos-founder-ceo-elizabeth-holmes-life-story-bio-2018-4.   

Theranos. (2017). The Theranos miniLab. How $9 Billion Startup Theranos Blew Up And Laid Off 41%. photograph, NBC News. https://www.nbcnews.com/business/consumer/how-9-billion-blood-testing-startup-theranos-blew-n671751.