Source: Walgreens is suing Theranos for $140 million – The Verge
The whole story of Theranos is a cautionary tale that illustrates that if something is too good to be true, it probably is.
Theranos was the golden child of Silicon Valley investors. The company and it’s founder Elizabeth Holmes claimed it was going to revolutionize the medical testing industry with it’s revolutionary new testing technology. Instead of health care professionals having to draw huge vials of blood for testing, Holmes claimed their new technology could do exactly the same testing using only a couple of drops of blood from a finger prick. The company sucked up hundreds of millions of dollars in venture capital. The company claimed that it’s testing procedures could do almost 200 different tests in its online documentation. Walgreens jumped on the bandwagon, signing a contract with Theranos to provide medical testing, and began offering testing is dozens of it’s pharmacies.
And then it all fell apart. US regulators issued a letter stating that Theranos’ testing “pose immediate jeopardy to patient health and safety” and could cause “serious injury or harm or death to individuals served by the laboratory” after inspections of one of the labs turned up major problems. FDA was also beginning to scrutinize the company. The company, which had never made it’s proprietary testing technology public, said it asked a prominent research hospital, the Cleveland Clinic, to compare Theranos technology to traditional techniques to prove it worked. But the clinic in question said it hadn’t done any such work, and added that “we are not consultants”.
In May Theranos voided data from thousands of tests that had been done over the previous two years. Unfortunately long after people may have used that data to plan medical treatment based on the testing. Walgreens terminated its relationship with Theranos and shut down the testing sites it had set up in stores in Arizona.
Other troubling information began cropping up. Like the fact that Theranos had only one test that was actually approved by the FDA. It was selling its other tests through regulatory loopholes. The Wall Street Journal discovered the company wasn’t even using its own technologies for testing. It was using traditional testing equipment made by other manufacturers.
Theranos clinical labs have been shut down and those employees fired, its CEO is banned from operating laboratories for two years. The company is being investigated by prosecutors and in addition to being sued by Walgreens, it is also being sued by at least eight patients and one of its own investors is suing it for fraud.
That doesn’t seem to have bothered it’s founder, Holmes, in the slightest. Holmes is pushing yet another blood testing device the company calls a minilab, about the size of a computer. The claims for this one are more modest than for it’s original technology which they claimed could do 200 tests. This one will only do 40. The Wall Street Journal challenged that claim as well.