Oct. 25, 2021 — The promise seemed too good to be true: Walk into your local drugstore, provide a few drops of blood via finger-prick, and get screened for hundreds of different diseases, quickly and cheaply. That’s what Silicon Valley startup Theranos, founded by Elizabeth Holmes, touted. As it turned out, it wasn’t true. Now Holmes is on trial in federal court in San Jose, CA.
The Theranos Story
Federal prosecutors have charged Holmes and Ramesh “Sunny” Balwani, Theranos’s president and chief operating officer, with nine counts of wire fraud and two counts of conspiracy to commit wire fraud. Both have pleaded not guilty. Their cases have been separated, and Balwani will go on trial in 2022.
Prosecutors say the pair knew Theranos couldn’t deliver — the equipment simply didn’t work — but continued to raise millions of dollars from investors and market the product to doctors and consumers. If convicted, Holmes faces up to 20 years in prison.
Holmes started Theranos (a mishmash of “therapy” and “diagnosis”) in 2003, when she was 19 years old. The next year, she dropped out of Stanford University to run the company. The goal: to revolutionize the health care industry by making blood tests widely, easily, and inexpensively available. Balwani joined the company in 2009. For some time, the pair were romantically involved, which may factor into the trial.
Thanks to Holmes’ charismatic presentation (complete with TED Talk) and a board of directors that included former secretaries of state George Shultz and Henry Kissinger, the company attracted major investors. At one point, Theranos was valued at $9 billion.
In 2013, Theranos announced a partnership with Walgreens drugstores. They planned to open Theranos Wellness Centers inside Walgreens locations, where consumers could walk in and have a few drops of blood taken, 1/1,000 the amount of a typical draw. Their proprietary, automated laboratory equipment would produce results in just a few hours at low cost.
But the company had one big problem: Their technology didn’t work. The FDA only approved it for a single test, for herpes simplex 1 virus.
In October 2015, The Wall Street Journal published an exposé based on the account of a whistleblower within Theranos, who said the company’s technology had many flaws. Results were often inaccurate. As a result, the vast majority of the 200+ tests Theranos performed were done the traditional way, with vials of blood drawn from the arm, on industry-standard equipment.
Things spiraled from there, and by June 2016 Walgreens stopped working with Theranos. Lawsuits, layoffs, and failed lab inspections followed, and 2 years’ worth of tests performed on Theranos devices were voided. In 2018, the Securities and Exchange Commission charged Holmes and Balwani with “massive fraud.”
Could It Have Worked?
Holmes’ concept was certainly intriguing, but Theranos never managed to pull it off. And even if they’d had limitless amounts of time and money, experts doubt they ever could have. Because most tests are performed only on the liquid part of the blood sample, a single drop from a finger-prick would really provide half as much that’s usable.
“When people heard what appeared to be a revolutionary concept, it sounded like we’d finally reached the days of Star Trek. Do all these tests on a single drop of blood,” says Kimberly Sanford, MD, president of the American Society for Clinical Pathology. “I remember discussing it in a staff meeting, all of us saying this is scientifically impossible, and the entire pathology community said the same.”
Beyond the technology, the idea of walking into a drugstore for blood tests poses other challenges. Interpreting blood test results isn’t as straightforward as it seems. “Normal” ranges represent 95% of the healthy population, which means that 5% of healthy people can be expected to have results outside that range. If you’re one of the 5% and you’re looking at abnormal results without a doctor’s input, you may wind up stressed and facing a larger medical workup for nothing, says Amy Karger, MD, PhD, chair of the College of American Pathologists’ Point of Care Testing Committee.
As whistleblower Erika Cheung, a former Theranos lab associate, testified at Holmes’ trial, “You’d have about the same luck flipping a coin as to whether your results were right or wrong.”