In 2003, a 19-year-old Stanford University dropout named Elizabeth Holmes launched Theranos, a Silicon Valley startup that promised quick blood tests at a lower cost than a traditional lab. Raising millions from private investors, Theranos claimed that just a few drops of blood sent away to their lab could be screened for a long list of health conditions, all at a cost of less than $3. By 2018, the company was bankrupt and founder Elizabeth Holmes was charged with 9 counts of federal wire fraud, as well as 2 counts of conspiracy to commit wire fraud. The company officially closed its doors in September 2018.
Real Partnership with Walgreens, False Claims of Association with Department of Defense
Business really began to boom when Theranos partnered with Walgreens in 2013. Forty Walgreens locations across the country would carry Theranos’ Edison blood testing device, which the company claimed could quickly and cheaply screen for a myriad of disease. It has been claimed that Walgreens blindly agreed to a deal without personally testing the device’s accuracy to avoid a competitor partnering with Theranos first. Soon after, questions began being raised about the accuracy of blood tests allegedly run on the Edison device. A class action lawsuit filed in California by Theranos patients alleges that the company’s tests falsely diagnosed them with diseases they didn’t have. Clinical scientists suspect that such small samples of blood (which is all Theranos claimed to have needed) would then have had to be diluted to be run on standard blood testing machines. This dilution leads to less accurate test results and is not considered acceptable practice for blood-based lab tests. Walgreens ended its partnership with Theranos and sued them for breach of contract in June 2016.