This is the non-sensational part of the Theranos trial, and I would contend it is the most important from an ethical point of view. We are now getting to the testimonies where major companies, multi-billion-dollar companies, were being led down the Theranos garden path by a tall, blond woman and her COO boyfriend who, so far, have not shown a shred of remorse.
According to Cromwell Schubarth, Tech editor of the Silicon Valley Business Journal
(Oct 13, 2021):
“Walgreens Boots Alliance Inc. was such a believer in Theranos Inc.’s technology and its promises of the big profits that technology would produce that the drug store chain gave the blood testing startup a $100 million ‘innovation fee.’”
Elizabeth Holmes convinced the drugstore chain that her miracle test could literally run 250 blood tests from a few drops of blood in under 20 minutes. Holmes doubled down and projected the drugstore chain to reap a minimum of $2 billion a year in revenues and about $650 million in gross profits.
Without proper, scientific due diligence, Walgreens plunked down $140 million to enter the partnership. However, even that was somewhat suspicious. The details of the deal were, in retrospect, absurd. Of the $140 million, according to the Silicon Valley Business Journal:
“Only $40 million of that came in the form of an equity investment, the rest was in the form of the fee for the privilege of teaming up with the startup,”
Holmes and Balwani pressed Walgreens for the money and “pocketed” a cool $100 million. Against any and all logic, Walgreens forked over the money before the company had so much as an FDA approval.
Also discovered in the course of the week was that – again before approval – that Safeway had committed $275 million to store renovation to eventually modify the pharmacy areas to accommodate the Theranos testing area. The defense for Theranos fought like heck to keep that fact from the trial, but now it appears as though Holmes and Balwani, had hoodwinked two store chains into a commitment of more than $400 million on an unproven technology.
The Wizard of Oz
I am reminded of The Wizard of Oz, where Toto gets behind the curtain and reveals that the Wizard is little more than a fraud. In a similar fashion, the Theranos Board of Directors did not include physicians, laboratory medical experts, or scientists but stocked the board with “business leaders” and politicians.
It was not difficult to see that the board was clueless in scientific matters; they were swept up in the hype. It was a set-up. It was only too late in the game when Holmes and Balwani acquiesced to a scientific and medical presence on the board when the board said it was a very high-risk, if not an impossible technology.
So what happened, and what is happening? Behind the Silicon Valley glitter, and the smooth and rather unacceptable promises of the female, Steve Jobs wannabe and her boyfriend enabler, was an apparent lack of ethics that repeatedly keeps revealing itself. They operated, as do most frauds, without a hint of oversite. I would double-down and endorse the idea that the original board was, in my opinion, a group of blowhards who were all too willing to add to the unethical cover-up.
Again, I wish to remind my readers that unlike the “fake it ‘til you make it,” mentality of some of the hi-tech start-ups that Holmes admired, Theranos was testing blood samples under falsified conditions using highly flawed technology. They were playing with people’s lives. Their faking it could have killed patients.
What was most fortunate was that when the blood tests came back, legitimate medical professionals demanded valid tests. At this time I don’t know what will happen to Holmes and Balwani but I do know the lowest item on their list of priorities was ethics.
LEAVE YOUR COMMENTS!
