Just finished Bad Blood. Hopefully they both get felony prison time, and there is precedence for it. I don't see how it's any different than a pharmacist diluting drugs. After diluting blood samples, they purposely doctored the statistics to reduce the deviation.
great. elizabeth holmes is being immortalized by jennifer lawrence. i’m really in two minds about the practice of making films about people of the likes of Holmes.
You shouldn't skip it - it's an excellent book that I believe in the long term will become a Silicon Valley staple similar to what Barbarian at the Gate is for Wall Street
It's also a breezy read - I tore through it in a couple of sittings.
The third-party lab machines Theranos was secretly using will often dilute samples during their general operation. This is a known factor engineered into their design and accounted for in their certification/regulation. Theranos was secretly diluting blood samples even more, well beyond what the machines they were using were originally meant for. What they were doing was legally, ethically, and scientifically completely distinct. Prison time is definitely deserved.
I guess im not fullybinformed on their actions, but of course the 3rd party machines automate the dilution process and in some cases dilution is done manually. Obviously working with the equipment outside of spec is wrong.
Because Theranos used very small samples of blood, when they got diluted, the error margins on the measurements increased a lot because it was hard to get the ratio of blood to dilution fluid consistent when samples are small.
Yeah, but they diluted them knowing the deviations were wild, then purposely tossed outliers to rein it in. It's statistical fraud 101. The premise is that you can't get enough blood (or quality of blood, as in the potassium test) from finger pricks to do the tests they claimed; period. They knew that soon after the start, and perpetrated the fraud for years.
I disagree with this sentiment. After reading Bad Blood as well, I must say that nobody at the company deserves much punishment. It's Theranos's investors and Theranos's business partners that are mostly at fault. They didn't do their due diligence and simply assumed (hoped) that the technology worked. They were too concerned about missing out on the "big one", which clouded their judgement.
No patients were harmed. The only losers in this are the investors that invested in Theranos. Given that they blindly trusted the pitch, without verifying that the technology worked, that makes them very bad and unskilled investors.
Unskilled investors losing a lot of money is, in fact, a very good thing for the Silicon Valley ecosystem. It's how bad influencers are flushed out of the system.
> After reading Bad Blood as well ... No patients were harmed.
You apparently didn't read it very well. Patients went to ERs, had drug dosages changed, invasive tests and procedures performed as a result of these results.
> It's Theranos's investors and Theranos's business partners that are mostly at fault. They didn't do their due diligence
And it's probably the FDA's fault, too, right? You know, since they should have known that a locked and partly covered side door to a lab is where the Theranos equipment really was, and that the lab they were inspecting had been carefully prepared and "sanitized" for their benefit, and Theranos hoped that if this wasn't uncovered they'd be certified based on the "prepared" lab. Balwani and Holmes forbidding anyone from using the real lab, or going through that door when inspectors were on-site was... "just hoping that it would work", not actively deceptive and fraudulent, right? What due diligence might have helped discover that?
FDA is not omniscient. No regulator is. It’s hard to catch someone intelligent and cunning in a lie every time. The industry relies on a combination of individual integrity (i.e. not wanting to hurt people, which works fine in 80% of cases) and regulation being a deterrent against fraud (for the minority that would release snake oil to make a quick buck).
I am glad Holmes and Balwani are facing the music. I would have preferred to see more than just Holmes and Balwani face charges though. There’s no way you pass an inspection from CMS and FDA when you have a “pay no attention to the man behind the curtain” part of the building without others being in on it.
In the wake of Theranos I have heard serious criticism of CMS & FDA to this effect (we need more regulations because clearly they're not getting the job done.)
Patients received incorrect blood test results and it's impossible to argue Theranos didn't know that this was a risk of what they were doing. In Bad Blood there were anecdotes of people being sent straight to the hospital because of worrying results.
Beyond the psychological harm in the reported false positive cases why are you confident that no patients were harmed in even worse ways (i.e. false negatives, not catching a condition early)?
This isn't the first time I've seen this sentiment on HN, unfortunately. Some people seem to think it's just part of life to make false claims to investors, especially if you really, really believe you can succeed once you have enough cash.
Assuming you don't know something to be definitely false, and you really really hope it works, is that the same as lying? I'm seriously asking in the context of your comment. People raise investor money all the time on the promise of hope. Does that make these people criminals? (Obviously if you 100% know it to be false, it's a lie, but the context of your comment is not definitely knowing it's false, but instead really really hoping it works)
Agreed. This isn't like a typical silicon valley startup which is hoping that their business becomes profitable once it reaches scale. This is our product does not work to the specifics required by the federal government but we sold it to consumers anyways.
Well I'm not a lawyer, but it seems to me that if you want to raise money on "promise of hope" as you said (which I'd imagine could be the majority of startups), you just need to represent yourself that way. The way I see it, it breaks into 3 camps:
#1: Saying you can do something you know you can't do
#2: Saying you can do something you think or hope you can do
#3: Saying you can do something you know you can do
While there is a human behavior difference between #1 and #2, you're still misleading your investors, right? Like I said, IANAL, so I can't say whether or not it constitutes fraud, but it is still dishonest IMO.
That's not the point. The point is reckless endangerment of patient and there are laws for these kind of thing. You break it and you pay for it.
It's like saying robbing a bank and no one got killed for it. They got the money back. Just let the robber go.
If they can get away with bilking investors while putting a defective medical device on to market you mind as well have a unregulated medical device market. FDA and John Carreyrou got them.
> Unskilled investors losing a lot of money is, in fact, a very good thing for the Silicon Valley ecosystem. It's how bad influencers are flushed out of the system.
The end does not justified the mean.
Just cause Thanos saved the universe by killing half of all living thing doesn't make it good.
If you intentionally commit fraud, saying that the victims should have known better and patients did not get hurt is not much of a defense. Fraud is fraud no matter the consequences.
Investors are not expected to need to see through blatant fraud. Many laws and regulations exist for the precise purpose of preventing fraud because it's not supposed to be one of the expected risks of investing. The expected risk of investing is that the business might lose value or fail in the marketplace, not that the entire operation is a scam.
> Unskilled investors losing a lot of money is, in fact, a very good thing for the Silicon Valley ecosystem.
This is blaming the victims. The article says that Theranos lied to investors. How can you invest in anything if lying is allowed without consequences?
> It's how bad influencers are flushed out of the system.
Justice punishing wrong behaviour is what flushes out the system. People walking away with money collected from lies and fraud does not.
