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The hinky thing about Theranos @preetbharara

While we wait for the jury in Paul Manafort’s trial to convict his ass, and fret, justifiably, about Trump revoking the security clearances of national security experts who reasonably believe him to be a treasonous idiot and aren’t afraid to say it, let us turn our attention to the case of Elizabeth Holmes and Theranos.

Theranos is (was) a startup company that promised to run accurate assays on dozens of blood tests with a finger stick. Elizabeth Holmes was a Stanford drop out who came up with the idea and the device, got many high name backers, and sold it to medical facilities everywhere. At one point, Theranos was worth $10 billion.

Then unsettling news started to leak about her gizmo. Specifically, her publications were thin to non-existent and the presentations on the data were amateurish.

She was eventually indicted for fraud because the device did not work as advertised, putting millions of patients potentially at risk.

Preet Bharara’s Stay Tuned this week focuses on the Theranos case. He interviews John Carrey of the Wall Street Journal about the history of Theranos. Very interesting. This interview exposes some uncomfortable truths about Theranos, venture capital and journalism.

Let’s take the last first.

Carrey makes a point that as a medical journalist, he has a better sense about Theranos than the typical journalist. 🙄. Like many of his ilk, he makes a big deal about credentials and the fact that Holmes was a college drop out and didn’t have any publications blah, blah, blah.

Those are not character flaws or limitations. I’ve worked with some fantastic medicinal chemists who got hired during their undergrad internship and never finished their degrees.

I know plenty of researchers who have a remarkable record of achievement who can’t publish because their work is proprietary, patentable and jealously guarded by lawyers.

As for her ability, there are tons of publications and youtube classes and other resources that are online and free so that anyone who is sufficiently motivated and insightful could come up with a magical blood testing device that kinda sorta works.

These are not limitations. In fact, if anything, other women who are interested in starting their own company could have gone the Holmes route. More power to them. That’s how we make breakthroughs. Your lack of credentials should not be a limiting factor. You can learn just about anything if you want to. In fact, if we took the attitude that only people with multiple degrees should be considered credible, then Steve Jobs and Bill Gates would have been serving burgers instead of creating technology that everyone uses.

I can’t even fault her iterative design. That’s a big buzz term these days but while it’s somewhat new to technology, it’s just another way of saying scientific method. There’s nothing wrong with putting out a device that works well for one test and then as you improve the device, you add more tests.

The problem with Theranos and why I don’t buy her aspirational, selfless “for the common good” defense of her fraudulent actions is I haven’t heard anything yet that says the FDA or any other regulatory agency approved her device for sale for something as serious as blood tests.

Nope. Nada. I’m still waiting for someone to tell me what agency approved it.

That’s where she would have had to show her work, just like all of us labrats have had to do. We have lab notebooks that are signed and co-signed.

She could have done that.

We make presentations and show all our work and data and sometimes years and years of clinical results. And sometimes, even that isn’t enough to get a new drug or device approved. The bar on safety keeps rising. It’s difficult to keep up. But we all understand and take seriously, our responsibility to show that our inventions are safe and efficacious.

Apparently, Elizabeth Holmes didn’t have to do that before she started selling her blood test machines. Her clinical tests were real world. And I’d like to know why. How did she get past the regulators? Did it have anything to do with her early backers at the conservative Hoover Institute who has deep ties to government entities and knew what buttons to push and which ones to avoid?

Oh, sure, when people started to question how her black box machine worked, she had to start make presentations that were found wanting and required further investigation. But by that time, she had sold many machines and made a fortune for herself and her early backers.

And I think this is where we come to the core of the problem. In order for Holmes to do this legit, she would have had to have done much of the research and gotten the data before she sold a single unit. Venture capitalists ain’t got time for that. It takes time and money, Gobs and gobs of both, before a single machine is sold.

Holmes, a young woman without a degree would have had a very hard time getting venture capital for a long term investment. Somehow, she met with the right people who didn’t think that would be a problem.

That’s the problem, Preet. Someone(s) knew where the loopholes and took advantage of them. They can proclaim innocence and good intentions until they’re blue but they still managed to skirt the regulatory process. And that’s a bad thing that should alarm all of us.

16 Responses

  1. Yay! I wrote about Theranos in the comments here a number of posts ago trying to get your attention. I spent a day looking at Carreyrou’s interviews and her videos. There is an angle of femme fatale to this in Carreyrou’s reports that might discourage other young women to get into such ventures. But she managed to hoodwink a lot of these older conservative rich men to fund her startup and money kept pouring in. You know more about chem stuff but to me the red flag was that she marketed it as “just one drop” for some 200+ tests? I have done my accuchecks for a while. A drop of blood is not much even as I realize we are dealing with molecules and such. Just from a statistics perspective, all that sampling and needing fresh samples for different tests, with just one drop? To me that was a stretch from the start. And the fraud went on for more than a decade!

    • I think you picked up on the Femme Fatale thing but let’s face it, a young pretty woman without a degree gets startup money for a black box from a bunch of very experienced dudes who spent most of their lives in government? I’m not buying it. She had a lot of help from them to get around the regulatories and then cash in big.

      • All the old farts lost big even good old Murdoch. She is now going to jail with perhaps not a penny from this whole thing.

        • Considering how many lives were at risk and that she KNEW her device wasn’t working as advertised, jail would seem like a very appropriate punishment. Maybe when she gets out, she can go back to Stanford or better yet, grow a conscience.

          • She was talking about starting another company after all the con came out, seriously but I think that was before she got indicted in June.

          • I’m not sure it’s possible for a psychopath to “grow a conscience”.

        • “She is now going to jail with perhaps not a penny from this whole thing.”

          Don’t worry – I think she’s still got enough of an inheritance to get by. Besides, I’m sure there’s a book deal and a movie in her future.

      • She was very connected and came from old money (rather like Bill Gates, come to think of it). Her great-great-grandfather was the founder of Fleischmann’s Yeast. Her father worked for USAID in numerous overseas posts, which sounds like great diplomatic cover for a spook to me (and would explain why she had such an easy time wrangling support from the likes of Murdoch, Kissinger, and Schultz) and was the Assistant Administrator of the EPA under Bush I. He later worked for Enron. Her mother was a career Congressional staffer.

        She was very much an insider, and they take care of their own. I’m sure all of her dad’s former colleagues were only too happy to take care of Chuck’s little girl.

  2. LOL!!

    • He should have said, “Mr Trump, you are next.”

    • From what I’ve read, Ellis has virtually made a mockery of this trial. He said at the outset that the prosecution only was trying Manafort to get to Trump. That is not true; and even if it were, so what? Try the case on the facts. Being tough on the prosecution is one thing, but this man is full of himself. He said to the prosecution near the end, “If you read the papers, you are losing everything, and the defense is winning everything.” He meant the takes on the way he was ruling on trial matters, but it sounded like he was saying that the defense is winning the case. All it takes is one juror to think that he/she will please the judge by not convicting, and it is a hung jury, and Manafort and Trump win big. Ellis didn’t like the prosecution of cases against Manafort, so is taking that personal view out on everyone else. And the jury should have been sequestered. Manafort was trying to bribe the jury at the outset, and he has some powerful mob friends. We will see how this comes out.

      • Nah. He is ok. He is a cantankerous old judge but he is alright.

      • Reminds me a lot of Judge Ito.

        This article covers a similar bias, in this case sexism, that prompted Ito to go after the prosecuting attorney, with similar grandstanding – though perhaps minus the star-struck infatuation with the defendant.

        The article is also is a welcome and rare acknowledgement of how demonized real feminism in the U.S. (women, their rights and nothing less, men, their rights, and nothing more) became in the 1990’s and has remained since then, with women scrambling madly for any identity other than simply “woman”.

        Even Barbara Ehrenrich, the once stellar author of such works as “For Her Own Good” fled into a blue collar working class identity – which, since women were and are kept out of any jobs paying a living wage in that category, only increases men’s power vis-a-vis women. Nothing illustrated this more than “Nickel and Dimed”, which didn’t once mention the surest cure for the sad working women stories cited there – eliminating the sexism that ghettoized women into those jobs.

        I still think that if sexism were cured once and for all, along with it would go most of the rest of what’s wrong with this country, such as overtly biased judges being allowed to try cases, intentional and permitted law breaking by law enforcement for acceptable targets (over a thousand women are killed every *year* by men because the police let them), the media’s bias-created reality, the maintenance of different classes of citizenship, etc, etc.

        And of course there’s the sexism a guilty media has largely succeeded in papering over as racism, that resulted in a criminal being installed as President over the most qualified candidate in history.

  3. Omarosa strikes again! She is the Mata Hari of our times.

  4. This thread/replies are a hoot! Who wants to bet Parscale is on the campaign dole too and let me guess, it is 15K per month.

  5. Look at the bitch complicit in this. Indian community should be ashamed.

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