Theranos: Biggest failure of corporate governance in history

  • Elizabeth Holmes built her company Theranos on this invention she named the Edison. A miniaturized blood analyzer that would disrupt the $60 billion lab testing industry dominated by giants LabCorp and Quest Diagnostics.
  • By February 2015 the Theranos fairytale was about to unravel publicly.
  • John Carreyrou, the Wall Street Reporter who broke the story on Holmes and Thernos said “She (Homes) is a pathological liar. She wanted to be a– celebrated tech entrepreneur. She wanted to be rich and famous. And she wouldn’t let anything get in the way of that.
  • For the media, Elizabeth Holmes’ story proved irresistible: a bright young woman revolutionizing blood testing, in Silicon Valley no less. Fortune magazine put her on their cover. Forbes named her one of the richest self-made women in the world. Time selected her as one of its 100 Most Influential People.
  • To this date, most people in the media are not being held accountable for their part in building up Ms Holmes without asking tough questions.

In the report on 60 Minutes John Carreyrou said “this is one of the most epic failures in corporate governance in the annals of American capitalism” . They did nothing to verify that her scientific claims were true.  Carreyrou’s first article appeared in October 2015, and revealed: “Theranos did less than 10 percent of its tests on Edison machines.”

What we continue to learn about Theranos is that the level of deception was unprecedented and that Homes surely belong in jail. But what we also are learning is that the media, for the most part, did not do their job in uncovering the massive fraud and instead decided to promote the hell out of Ms Holmes.  Just read this quote:

Though the media attention may have initially boosted Holmes’ profile nationwide, Textor says the Holmes story is not a failure for journalism. Rather, she says it shows what investigative reporting can do. The Wall Street Journal, which published the glowing article about Theranos early on, ultimately unraveled its myth, thanks to a months-long investigation by reporter John Carreyrou.

Keep in mind that one reporter did have the courage to pursue the truth, but what all the other so called “journalists”?   I really believe, that to a point, mHealth could be the next Theranos.  While we see infographics on the numbers behind mHealth physicians still haven’t bought into the technology and are will not diagnose patients based on the data from devices.

When it comes to the pharma trade press there is only one publication that pursues the truth; STAT News.  With real journalists, like Ed Silverman, they continue to ask the hard questions that too many seem to ignore.  Ms Holmes surely belongs in jail, but will justice be served?

 

One thought on “Theranos: Biggest failure of corporate governance in history

  1. The thirst for greed always overwhelms common sense and established protocols that are designed to protect. The only good thing about this is that those who threw millions of personal dollars into the pot to profit from this may have learned an expensive lesson.
    And, of course, those patients involved have suffered in a variety of ways.
    Whatever happened to the pharmaceutical segment of the healthcare system that did so much good for so many years?

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