For my first blog following the introduction, I’ll go for the low-hanging fruit: Theranos.
You’re familiar with it, right?
I first heard of Theranos around seven years ago when I was getting ready for work one morning, listening to CBS Morning News. I heard something that didn’t sound right. I stopped in my tracks and backed up my TIVO. Yes, I’d heard it right. A company was being lauded for developing blood tests that could be done with blood from a single fingerstick, collected in a small tube.
Using a fingerstick instead of the traditional venipuncture (a needle in an arm vein) was supposed to make blood collection less scary and painful. Much less blood would be used. Testing would be cheaper, too. Oh, and the CEO and brains behind the whole thing was a young woman with no apparent knowledge about medicine or chemistry. On the board of the company were notable men, none of whom had any knowledge of medicine or chemistry, either. Many supposedly savvy investors had already put money into the company.
I simply couldn’t believe it. I had no idea at the time this was a big con job being pulled off by the CEO who looked like a freak to me, but I suppose was attractive to old men. I couldn’t understand it and wanted to find out more. I figured I must have been missing something.
In case you’ve been living under a rock, I will tell you now that the company was a sham and went down in flames after a reporter, John Carreyrou, wrote an expose, a book called “Bad Blood: Secrets and Lies in a Silicon Valley Startup,” which describes the myriad lies and deceit behind the initial (financial) success of the company. It’s a good read, and I suggest anyone interested pick up a copy. Needless to say, investors lost a lot of money.
However, I want to discuss a different angle. Why I initially thought it made no sense.
1. Using less blood is no breakthrough. It’s just never been a priority. Labs typically collect much more blood than needed, to allow for repeat testing when needed, or for tests added later by the ordering physician after the original results are reviewed. Most automated machines require a larger amount of blood than would be collected in a Theranos tube, because they are made to fit standard tubes which are bigger. Like changing from feet to meters, changing the machines to fit smaller tubes is possible, but not without significant cost and an awkward transition period. Of note, pediatric patient samples currently are often collected in smaller tubes and handled specially.
2. Lowering costs, I thought, was possible. But honestly, to less than half of current costs? The fees to a large measure are dictated by the price of reagents that are FDA approved, running all the controls needed, and the salaries of licensed technicians that run the tests (they are paid well, as they should be). It turns out the company was operating at a loss, burning through investors’ money.
3. Using a single tube for all tests made no sense. When you get your blood drawn, have you ever noticed that often multiple tubes are drawn? And they have different colored tops? The color of the top indicates the chemical that is present in the tube, needed for a particular test. For instance, a red topped tube has nothing added, and the blood is allowed to clot. A lavender topped tube has an anticoagulant in it, preventing the blood from clotting so a hemoglobin level, platelet count, and white blood cell count can be performed. Other types of anticoagulant (blue tops and yellow tops) are used for different tests requiring unclotted blood. A gray topped tube has sodium fluoride and potassium oxalate and is used to accurately measure glucose. I wondered how they could possibly run a large variety of tests from one tube with nothing added (answer: they couldn’t).
4. The fingerstick. This is the one that really got me. Nobody, to my knowledge, has brought this up: why would anyone want a fingerstick instead of a venipuncture? I had a fingerstick once when I was in the first grade. I found the lancet quite scary, and it hurt like a bitch. In fact, it hurt in that spot for at least the next twenty years of my life. Your fingertip has a much higher concentration of nerve fibers than the skin on your arm. Maybe some people find it less intimidating to get a fingerstick than a needle stick, but I think anyone needing a blood test more than once every few years will catch on that fingersticks are more painful.
Bottom line: Don’t trust people with no expertise like the CEO and board members of Theranos, and don’t allow anyone to invest your money if they trust people with no expertise. Getting the advice of a pathologist could have saved some investors a whole lot of money. In this case, fortunately, probably none of those who lost money were little old ladies living on a pension.
That’s my $0.02 worth on Theranos. Let me know what you think.