In 2003, 19 year old Stanford student Elizabeth Holmes created the startup medical company Theranos. Holmes’ vision was to revolutionize medical blood tests. Theranos technology was said to be able to scan for hundreds of diseases with just a few drops of blood, about 1/1,000 the amount of blood used in an ordinary blood draw (WebMD). Theranos would make blood tests cheaper, more convenient, and more accurate. A year later, Holmes dropped out of Stanford and over the next twelve years, she spread the idea of Theranos while attracting investors. The company formed a partnership with Walgreens, who put Theranos wellness centers in 40 Arizona locations. As Holmes’ empire grew, it was worth up to 9 billion dollars (CNBC). The advancements Theranos offered in the medical field seemed too good to be true. Unfortunately for hundreds of patients and investors, it was. 

Eighteen years later, Elizabeth Holmes is on trial in San Jose on nine counts of wire fraud, fraud that involves the usage of telecommunications or the internet (Investopedia), and two counts of conspiracy and facing the possibility of twenty years in prison. Her business (and past romantic) partner, Rahmesh Balwani face the same charges but won’t see trial until 2022 (WebMD). What went wrong? In 2015, a whistleblower from the company exposed that Theranos’ technology simply didn’t work. According to prosecutors, Holmes and Balwani knew the technology didn’t live up to their promises and willingly deceived investors, doctors, and patients. It is unclear whether the technology Theranos promised would be possible at all. Kimberly Sanford, as quoted by Web MD, claims, “I remember discussing it in a staff meeting, all of us saying this is scientifically impossible, and the entire pathology community said the same.” 

Using information from the Theranos whistleblower, the Wall Street Journal published an expose, stating that results from Theranos technology were usually inaccurate. In fact, despite promising hundreds of results, herpes simplex 1 was the only test approved by the FDA. Additionally, faulty results led to Theranos doing the vast majority of tests on using traditional technology, not the revolutionary “nanotainer” as promised (WebMD, The Conversation). According to Erika Cheung, as cited in the Web MD article, “The Theranos Trial: What You Should Know,” “You’d have about the same luck flipping a coin as to whether your results were right or wrong.” 

Surprisingly, Elizabeth Holmes testified in her own defense. According to Holmes, she never willingly deceived investors and patients. Instead, she claims that she overestimated the technology and Theranos’ ability to improve it quickly (BBC). In her testimony, Homes also responded to the allegation that Theranos used unauthorized reports and logos from the big drug companies Pfizer and Schering-Plough, saying that she did not try to conceal the usage of reports and logos from Pfizer (CNBC). 

The Theranos trial has been called one of Silicon Valley’s biggest frauds and the largest recent conspiracy in the United States. Whether or not it was intentional, the deception Theranos caused shook the medical community and the lives of patients who received false results. The trial could last until mid-December, after which the jury will decide whether or not Holmes will spend the next twenty years in prison. 

Sources

Ana Santos Rutschman Assistant Professor of Law. “How Theranos’ Faulty Blood Tests Got to Market – and What That Shows about Gaps in FDA Regulation.” The Conversation, 18 Nov. 2021, https://theconversation.com/how-theranos-faulty-blood-tests-got-to-market-and-what-that-shows-about-gaps-in-fda-regulation-168050.

Hayes, Adam. “Wire Fraud Definition.” Investopedia, Investopedia, 20 Nov. 2021, https://www.investopedia.com/terms/w/wirefraud.asp.

Khorram, Yasmin. “Elizabeth Holmes Admits She Added Drugmakers’ Logos to Theranos Reports.” CNBC, CNBC, 24 Nov. 2021, https://www.cnbc.com/2021/11/23/elizabeth-holmes-admits-she-added-drugmakers-logos-to-theranos-reports.html.

Koenig, Debbie. “The Theranos Trial: What You Should Know.” WebMD, WebMD, 25 Oct. 2021, https://www.webmd.com/a-to-z-guides/news/20211025/theranos-trial-what-to-know.

“Theranos Trial: Elizabeth Holmes Makes Surprise Testimony.” BBC News, BBC, 20 Nov. 2021, https://www.bbc.com/news/world-us-canada-59355955.