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The Theranos scandal

Prior to the COVID-19 pandemic, I had no real interest in podcasts. I would listen to the occasional episode of whatever show my dad was following on a long car ride, but I had never gone out of my way to find one. I’m a more visual person; I need to be able to see the story unfold. That was until August of this year, when my dad recommended a podcast to me. The Dropout: Elizabeth Holmes on Trial seemed different than my dad’s usual picks about Wall Street and the stock market. “You should at least listen to the first episode, Holly; I think you’ll like it. This woman dropped out of Stanford when she was 19 to start her own company and scammed a lot of people; that’s why she’s on trial now.” As a 19-year-old who was about to enter her first year of college, this piqued my interest. 

Elizabeth Holmes was born in Washington, D.C., in 1984, but moved around often due to her father’s job. She had a competitive streak from a young age, and would tell her relatives about how she wanted to be a billionaire when she grew up. She was a straight A student with a strong work ethic, and was even accepted into one of Stanford’s summer programs while still in high school due to her fluency in Mandarin. Elizabeth did not come from humble beginnings. Her father, Christian Holmes IV, “worked for government agencies after serving for a time as a vice president at Enron,” and her mother, Noel Anne Daoust, “worked as a foreign policy and defense aide on Capitol Hill.” Her great-great uncle, Christian Rasmus Holmes, is the namesake of Cincinnati’s General Hospital, and he married the heiress to the Fleischmann yeast empire. Evidently, Elizabeth came from a powerful family, a connection she used to her advantage when establishing her company, Theranos. In fact, Elizabeth initially intended to go into medicine, but her own phobia of needles prevented her from doing so. 

But what exactly is Theranos? Or rather, was Theranos? The company was dissolved in September 2018 following many lawsuits and the charges of fraud brought against the company, its founder, Elizabeth Holmes, and president, Ramesh “Sunny” Balwani by the SEC. Theranos was a health technology company. Their revolutionary technology claimed to be able to run a multitude of medical tests with the amount of blood drawn from a finger prick, the “Nanotainer,” and the results were to be comparable to those if a traditional test were to be conducted. The device was supposedly able to detect various diseases and ailments, such as cancer, without putting patients through numerous rounds of blood drawing and testing. 

However, there was a multitude of problems with the technology, the most flagrant one being that it didn’t work! The company’s former laboratory director, Dr. Kingshuk Das, joined the startup in 2015, and soon discovered that Theranos “performed most tests with commercial analyzers that it bought from other companies and sometimes altered,” due to the often unreliable results produced by the company’s own product.

One prominent example is when “a dozen women’s blood-test results showed a prostate-specific antigen typically seen only in men.” One individual in particular even reported receiving test results claiming that their cancer had relapsed, which further comprehensive testing proved to be inaccurate. 

To make matters worse, no Theranos employees ever contacted the individuals who had received these faulty results, and there was no emotional or financial compensation. Despite notifying Holmes and Balwani numerous times that the Edison technology was not accurate enough for use, Dr. Das’ concerns were ignored; this was the case for numerous other employees, too. Theranos not only lied to its employees, customers and investors, but to the FDA. Despite being labeled a Class II medical device by the federal agency, the company labeled the technology a Class I medical device, which meant that there would be no regulatory requirements to uphold. 

Phyllis Gardner, a Stanford professor and member of the Harvard Medical School Board of Fellows, has known Holmes since she was 19, and even then Gardner knew the technology Holmes claimed to invent was simply not feasible. She remained consistent in her doubt of Holmes’ work, and was “one of the first people to go on the record with doubts about Holmes in The Wall Street Journal.” Gardner witnessed Holmes’ transformation into the black turtleneck wearing, deep voiced individual whose look was modeled after the late Steve Jobs. Holmes has since been dubbed a “girlboss” by her fans, who are called “Holmies.”

Although Holmes is by no means an individual others should look up to, the internet has taken advantage of her trial media coverage to hail Holmes as a “girlboss” due to her “succe(ss) within capitalism.” 

It is insane to me that Holmes was not exposed sooner, and that her company reached the magnitude that it did. How did a college dropout without a medical background manage to run a company whose board members included former US Secretaries of State and the former Director of the CDC without raising widespread suspicion or doubt sooner? Admittedly, I have yet to finish the podcast, but as Holmes’ trial concludes its fifth week, she stands to face up to 20 years in prison, in addition to “$2.75 million in fines, as well as restitution to be paid out to victims.” Dr. Das is expected to testify, and his testimony could be particularly devastating to her defense. As the trial unfolds, we can expect to hear more about Holmes’ deception and how she fooled the world with her charismatic personality.  “Sunny” Balwani is expected to stand trial next year.

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