Elizabeth Holmes and Theranos: A play on more than just ethical failures

Abstract

Elizabeth Holmes promised a revolution in blood testing protocols by building innovative technology and process efficiencies in an industry ripe for disruption. Along with Ramesh Balwani, she recruited investors under the guise of these promises and raked in millions of dollars in addition to lucrative private partnerships to bring her vision for the company, Theranos, to fruition. Behind the scenes, the enforcement of strict codes of secrecy left many in the scientific community skeptical of such claims as the company chose to abandon standard procedures including peer review. Additionally, the company initially employed a “board of advisors” versus a board of directors, with many of the members sourced from previously held positions of power in business and the military. Members of the news press soon joined in on the skepticism, and the company began to implode in 2014. Two key whistleblowers emerged, one of which had a familial relationship with a key Theranos backer and member of the advisory board. Lawsuits from investors followed and applicable regulatory authorities began investigations. Inquiries by three separate government bodies resulted in charges of conspiracy and several counts of wire fraud levied on both Ms. Holmes and Mr. Balwani in addition to suspension of the company’s licensure. The Theranos saga reads as an ethical tragedy that had an opportunity to be anything but.