If you’ve been following the Theranos situation that involves several damning articles from the Wall Street Journal on the company (see sidebar below video), you know that “something is rotten in the state of Denmark.” That is to say, regardless of whether or not you believe the WSJ articles 100%, believe Theranos 100%, or land somewhere in between, it’s hard not to see that something at the company is definitely creating questions about their original claims. In fact, the company has apparently even tempered some language with regard to its capabilities while “debating” the accuracy of the WSJ articles. It’s really a big mess for a company that was supposedly making significant changes in the way we’d conduct blood testing and the way patients controlled and accessed their own health data (although, I think the idea behind that specific aspect is a very good one).
Due to FDA inspections and findings of concern with Thernos practices, the company is currently only collecting blood for one test using its revolutionary proprietary technology. While the company’s CEO Elizabeth Holmes continues to assure the public that the problems are tied to FDA related procedures and not an issue with the technology itself, stakeholders such as Walgreens put any further interactions with the company on hold.
In the following video from Fortune’s Global Forum, you can see Ms. Holmes discussing the situation over the FDA inspections and the changes that are currently in place with regard to the testing that’s happening at the company.
If you’re not familiar with all the details of this ever developing story, take a look at these articles for additional information. The first link is responsible for much of the news that’s resulted from this situation.
- Hot Startup Theranos Has Struggled With Its Blood-Test Technology
- Walgreens Scrutinizes Theranos Testing
- FDA Inspectors Call Theranos Blood Vial ‘Uncleared Medical Device’
- FDA’s inspection report of Theranos (PDF)
- Theranos Fires Back at Wall Street Journal Stories
- Theranos’ counter to the WSJ accusations
So what’s the story behind this story? Is this a deliberate attempt to deceive on the part of Theranos or is it an example of what can happen when an “outsider” gets involved in the highly regulated medical device industry and faces off with the FDA without the proper experience in place to address potential areas of concern?
In a recent blog, I looked at the crowdfunding of medical devices and what can happen when claims made don’t live up to the reality of the product that’s actually developed. Once enthusiastic investors can quickly (and loudly) turn on a company or project, venting their frustration even directly on the crowdfunding page for all to see. Unfortunately, with the way these sites seem to be set-up, the money is still provided to the company that produces a product, albeit one that does not live up to the initial concept.
Is that what Theranos ultimately is? Were the technology claims taken at face value by significant investment backers? It would seem very unlikely, but given some of the accusations of former Theranos employees in the WSJ articles, it wouldn’t be the only instance of Theranos trying to manipulate testing protocols for the sake of appearing more impressive. Theranos counters those claims by saying the former employees were actually unfamiliar with the actual testing the company performs. Whether or not you believe that is entirely up to you.
Another alternative to blatant deceit on the part of Theranos is the possibility that the company was simply playing in an industry it wasn’t truly experienced enough to handle. In other words, how many FDA savy employees work for Theranos? Did they seek consultants to help with the regulatory processes? Or were they simply naïve to the ways of the regulated industry in which they were entering?
Again, this scenario too seems unlikely, but it also brings in the debate over lab-developed tests and the FDA’s regulation of them. If Theranos testing protocols fall under the realm of LDTs, then they aren’t necessary under the oversight of the FDA. Sure, the blood collection device is (and that’s why changes are currently occurring at the company), but does the FDA have the authority to inspect the company’s tests if they are LDTs?
Ultimately, I think everyone (with the exception of competitors to Theranos perhaps) wants the company to be successful. The ideas and hope embedded within the original claims the company made will only enhance the quality of care that we are able to achieve within our healthcare system. Further, empowering patients to make decisions and get involved with their own healthcare management would likely improve their overall health.
Unfortunately, before any of that will be possible, Theranos is going to have an uphill battle in defending itself, its technology, and its CEO in this very public debate over the realistic capabilities it can provide. Hopefully, it learns from this experience and if the technology truly functions the way they’ve claimed, they’ll bring on the necessary regulatory experts and better navigate the troubled waters in which they currently find themselves.