How a Reporter Pierced the Hype Behind Theranos
Someone asked about a transcript. There&#x27;s no official transcript as far as I can tell so I sent it up to IBM Watson:<p><a href="https:&#x2F;&#x2F;gist.github.com&#x2F;dannguyen&#x2F;71d49ff62e9f9eb51ac6" rel="nofollow">https:&#x2F;&#x2F;gist.github.com&#x2F;dannguyen&#x2F;71d49ff62e9f9eb51ac6</a><p>First part (rather than paste the entire thing, you can just check out the gist: <a href="https:&#x2F;&#x2F;gist.github.com&#x2F;dannguyen&#x2F;71d49ff62e9f9eb51ac6#raw-txt-md" rel="nofollow">https:&#x2F;&#x2F;gist.github.com&#x2F;dannguyen&#x2F;71d49ff62e9f9eb51ac6#raw-t...</a><p>and nbsp walking to the ProPublica podcast I&#x27;m Charlie Orenstein and I cover healthcare here at ProPublica<p>today we&#x27;re gonna be talking about laboratory testing<p>it&#x27;s no secret to many that lab testing has been caught in the dark ages of medicine<p>or you have to go to your doctor to get a prescription for a lab test<p>and then your doctor gets the results of the lab test if you&#x27;re lucky will share with you<p>and then you&#x27;ll be back to going to your doctor again if you need a follow up<p>a company called their in house aim to change that<p>founded in two thousand and three by Elisabeth homes<p>a nineteen year old drop out of Stanford University this company and to really shake up laboratory testing<p>it received fawning coverage from many mainstream media outlets including The New York Times<p>but John Kerry Roo a reporter at the Wall Street journal took a more critical look at their in house<p>and found that behind this glossy surface there were a lot of questions about both its effectiveness and the science that underlie its main products<p>John is joining us here on the podcast John Markham hi thanks for having so how did you decide to take a look at their house<p>well I had read Ken Auletta as profile of Elizabeth homes in the New Yorker in which I think came out in December of two thousand fourteen and<p>I found it interesting there were some brief critical %HESITATION sections in there that raised questions for me but I don&#x27;t think all that much more of it and then as the calendar year turned to %HESITATION two thousand fifteen a couple weeks later mid two thousand fifteen I got a tip from someone not a primary source who had any primary information but someone who is a relating to me<p>some you know third hand information that that things might not be exactly as they seemed at this company thoroughness<p>so it&#x27;s interesting because I think a number of reporters got tips along the way and and you were the one to pursue them I personally heard from somebody who said that his lab results didn&#x27;t match the lab results he got from a different lab so it doesn&#x27;t seem like this was a huge secret that there were questions out<p>right and shortly after I began looking into the company in and looking into this tip a Stanford on a medical school professor I believe %HESITATION put out a critical opinion piece in the journal of the American medical association<p>and he didn&#x27;t really have any any information other than the say this is a company that was<p>making very bold statements about its breakthroughs in the science of laboratory testing saying that it could test for a number of conditions off just a drop of blood <i></i><i></i> from the finger and yet it hadn&#x27;t really done what you usually do in medicine which is a peer review<p>and he was questioning %HESITATION this new trend of making all these assertions about what you&#x27;ve invented without really proving it and having it vetted by your peers and then there was another %HESITATION professor in Toronto I believe a couple weeks or couple months later who who came out with a critical medical journal and I editorial as well so people are beginning to speak out in the scientific community as I was doing my reporting<p>so let&#x27;s just take a step back and put the science aside for a second what is the hope of fairness what it promised people<p>so the the fair knows invention as Elizabeth homes are<p>you know announced it in magazines and at conferences was that %HESITATION with a tiny drop of blood <i></i><i></i> from a finger with the lancet<p>they could run the full range of laboratory tests and get you back results on all these tests within hours<p>and at a low cost to the latter part is true they charge very low prices and then when you look at the assertion that they can do the full range you you ask laboratory experts what that means and they say can mean anywhere from several hundred to several thousand tests<p>so the claim was quite bold in this hadn&#x27;t been done before from just a drop of blood being able to run the full gamut of tests and get results back to the patient&#x27;s very quickly %HESITATION it did sound like a real scientific breakthrough and third for listeners who may not be aware of what is it usually take as far as blood to run that gamut of test what weirdest blood come from and how much blood is needed<p>well if you get tested for say a a comprehensive metabolic panel which is a typical panel that you might not get a prescription for your doctor for which is about a half dozen tests<p>you&#x27;ll go to request or a lab Corp or a hospital lab in they will draw your blood with a needle odd that they put in your arm and they&#x27;ll draw about five tubes of blood so quite a bit of blood is typically %HESITATION required to to run you know half dozen tests<p>so Liz with homes was incredibly successful I think getting it hundreds of millions of dollars four hundred million dollars %HESITATION of invest more money and more than us more than that so that value the company at nine billion dollars or so<p>yeah we we went back and found some %HESITATION some regular<p>for filings and were able to calculate that they raised at least seven hundred and fifty million dollars most of it more than six hundred million dollars was raised in two thousand fourteen and that last fundraising round valued the company at about nine billion dollars<p>which is a a huge of valuation that that&#x27;s our moral less what quest and LabCorp are each valued at and these companies have been around for a long time and they have a huge revenues in huge profits<p>are in this laboratory upstart that was founded by a college drop out ten years ago suddenly valued at at the<p>the same valuation as those two huge companies alright let&#x27;s stop there because I think listeners Arabic %HESITATION why like how did this unicorn<p>get so much money what did people see it<p>that isn&#x27;t clear what people saw in it other than %HESITATION Elizabeth homes as pitch<p>that she had made this scientific breakthrough is not clear because I&#x27;ve heard that and and pretty much ascertained during my reporting that the company did not offer really any information<p>about the science and about how the technology works about how it&#x27;s<p>laboratory %HESITATION instrument worked<p>or about its financials so are investors who were putting up this money were for the most part going in blind<p>but at a star studded board right<p>they did they had %HESITATION Henry Kissinger<p>and now George Shultz and Sam Nunn and %HESITATION<p>Phil frets they had a bunch of older statesman some exit some retired military commanders<p>it was a %HESITATION heavy duty board a lot of big names<p>in %HESITATION the military and and former cabinet members<p>%HESITATION incident seemed impressive at first glance<p>so your first piece ran last year and you began raising questions what were the key questions that you found<p>so the first thing was to<p>look at whether they were or were not running the full range of laboratory tests<p>on other proprietary technology<p>and after a lot of reporting in talking to former employees who were in a position to know exactly what the reality of that was<p>I was able to determine dead of the more than two hundred and forty blood tests that they offered consumers at their blood draw centers in Walgreens stores<p>that at the very most at the end of two thousand fourteen fifteen of them were run on their<p>pride Terry lab instrument which by the way they called the Edison after the inventor Thomas Edison pretty clever out why does it matter though that who cares which instrument that tests were run<p>well<p>if you&#x27;re asserting that you that you made a scientific breakthrough that it enables you<p>to run the full range of laboratory tests off just<p>a drop of blood and it turns out that you can only do fifteen tests then<p>you&#x27;re you&#x27;re probably hyping where you are in and your ability and so then the question arises whether you&#x27;ve told the truth to investors whether you&#x27;ve told the truth to the public<p>but then there&#x27;s the the other issue that I discussed in my first piece which was published in October which is what whether or not<p>the testing for those fifteen tests and and that the testing for all the other test<p>was accurate and produced good results and and I had ex employees telling me<p>that %HESITATION they questioned the accuracy of the Edison machine and that their endless was also doing things like diluting small blood samples in order to create a bigger volume to run them on commercial analyzers<p>that also created problems with accuracy<p>and I would travel to Arizona and talk to patients and doctors there and came up with anecdotal evidence of<p>a test that didn&#x27;t seem to square with comparative tests done at other laboratories and so all of that made me realize that it wasn&#x27;t just about potentially company that it over hyped