How Theranos Has Affected the Health Industry

16 May, 2016, by ClinCaptureTeam

Who is Theranos?

The biotechnology and medical industry has taken an interesting turn as of late. The word scandal has been thrown around quite liberally, mostly having to do with a tense showdown between the well-known Wall Street Journal, and the burgeoning biotech medical company Theranos. The controversy started when The Wall Street Journal published a 3,000-word article here, http://www.wsj.com/articles/theranos-has-struggled-with-blood-tests-1444881901 claiming Theranos did not deserve their title as an innovative new biotech company. The article went on to insinuate that the company lied or exaggerated about product performance.

In response, Theranos has gathered a legal team, claiming that the The Wall Street Journal attacked the company’s reputation with false accusations and malicious intent. This has left many wondering just who is in the wrong here? Before we delve into that however, lets learn a bit more about the company in question.

Theranos is a privately held health-technology company based in Palo Also, California. The company is known for the development of Edison, a blood-testing device that uses microfluidics technology to be able to gather valuable medical information. Theranos claimed the technology could accurately replace 240 different tests, ranging from cholesterol to cancer, and could test accurately with just a few drops of blood, as opposed to the vials used by traditional testing. The company pushed the Edison product in 2014, managing to raise over $400 million from investors. When it all added up, Theranos was valued at $9 billion dollars by the end of 2014. 2015 however, would be a less progressive year.

An Interesting Investigation
It turns out that Theranos’s rapid growth as a company raised a few eyebrows in 2015. The company became the target of an investigation by federal prosecutors, as well as the Securities and Exchange Commission. The investigation prompted further inquiry from The Wall Street Journal, which claimed that the accuracy of the Edison device, the cornerstone of Theranos’s company development, was grossly exaggerated. The insinuation of this accusation basically means that The Wall Street Journal was openly accusing the company of fraud, something that carries substantial legal ramifications for either side if they are found to have intentionally obscured the truth.

On the other side, Theranos claims that the accusations made by The Wall Street Journal are completely groundless, and that their journalists acted with reckless, and perhaps even malicious intent. So which is it? Was The Wall Street Journal just trying to smear a company name for the sake of media buzz, or are their claims against the company legitimate?

Well it turns out that the Edison device indeed may not be as accurate as Theranos initially claimed. A review from the ‘Centers for Medicare and Medicate Services’, a completely independent entity funded by the U.S. Government, reported that the Edison device tested inaccurately multiple times. The investigation became even more intriguing when some of Theranos’s employees stepped forward. The employees stated that many of the company’s achievements were exaggerated, and they only used the Edison technology on a very small fraction of their tests, around 5%.

The Consequences 
The clashing of the promising start-up Theranos and The Wall Street Journal has revealed some unsettling evidence. If the claims against Theranos can be validated with hard evidence, the company can face some serious backlash. The company would have to answer to many authorities, including the United States government, the investors they mislead, and consumers.

Perhaps the worst part about this scandal is that it slows the powerful progress the medical industry has been experiencing. Crowd-sourcing medical data gathering has become a common and powerful tool in the research, as well as the treatment of disease. When companies like Theranos make false claims about the efficacy and accuracy of their data-mining, it compromises the whole crowd-sourcing medical technique. The Theranos scandal has shown us that while innovation and progress is exciting, patient review and analysis is necessary for every emerging technology.

Learn more about the controversy yourself here:

http://www.wired.com/2015/10/theranos-scandal-could-become-a-legal-nightmare/
http://www.fastcompany.com/3055125/call-it-the-theranos-effect-health-tech-startups-now-face-a-burden-of-proof