Theranos: The Blood Testing Company That Wasn't (2015)

Elizabeth Holmes, founder of Theranos

The Controversy:

As a 19 year old Stanford dropout, Elizabeth Holmes founded a blood testing company named Theranos that revolutionized how blood samples could be analyzed. She found backers and investors and began raising money, as she developed herself into the world's youngest self-made female billionaire. At its hight- before it began to be questioned by John Carreyrou, a healthcare reporter for The Wall Street Journal- Theranos was valued at 9 billion dollars. Its claim to fame was pain-free tests that could look for up to 70 different markers in a single drop of blood, and have the results delivered to your phone in hours. This type of technology seems too good to be true, as it revolutionizes the way blood samples can be processed. It would be a great improvement- if it actually worked, however. The first red flags came up when Carreyrou noticed Holmes had difficulty explaining how it worked. When asked, she replied with, “a chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel.” I doubt anyone could listen to that statement and believe she has any idea of what she's talking about. So naturally, Carreyrou began poking around and made an interesting discovery. He discovered that single drop samples can not be accurately tested, so Theranos diluted the samples and ran them through other machines made by Siemens, instead of their own “Edison.” After the article produced by Carreyrou, the FDA looked into the case and told Theranos to stop using its “nanotainers,” another product of theirs. Holmes came out and fought these allegations, however she didn't provide any data to counter the article’s claims. Later it was uncovered that Theranos had run a flawed blood-clotting test on over 80 patients for six months, which meant that Theranos’ tests were throwing off medical decisions. Theranos’ tests also failed at least a third of all internal quality control checks.

The original Theranos laboratory, in Palo Alto, 2014.

Stakeholders:

Theranos has several different types of stakeholders. Corporations like Walgreen's, Safeway, and Capital Blue Cross all partnered with Theranos in the beginning. They have invested money into the company, and have contracts with it. There are also people that have been negatively affected by the company's false technology. Since you cannot accurately analyze blood samples as small as drop of blood, Theranos has thrown off medical decisions for the patients who have used their machines. Theranos should be held responsible for these mishaps, since Holmes knew their technology was faulty and not as real as they portrayed. 

Example of the machines designed by Theranos to
 analyze blood samples.

Individualism:

There are two main ideas for the Individualism perspective- maximizing profits and staying within the law. When analyzing this case, it seems at first that it is ethical in the eyes of an individualist. Theranos did become a huge success- a massive operation worth 9 billion dollars. They weren't originally flagged down by the FDA or the CLIA (Clinical Labs Improvement Amendments), suggesting that they were acting within the constraints of the law. However, once Theranos was investigated, it soon came out that they had failed to produce devices that were FDA approved. In the long run, it also did not maximize profits. At Holmes's peak, she was worth 4.5 billion dollars. After this scandal, Forbes evaluated her worth to be $0. So, Theranos failed to maximize profits for the owners, and failed to stay within the law, therefore rendering their practices unethical. 

It seems the small size of the sample would
make everyone happy, but that is not the case.

Utilitarianism:

A Utilitarian viewpoint focuses on the overall happiness of the stakeholders- an ideal utilitarian company will maximize their happiness. When looking at the Theranos situation, it is apparent that the company did not maximize the happiness of any stakeholders. Theranos lost pretty much all of its value, including all of the investor's money. Its partners, Walgreen's, Safeway, and Capital Blue Cross are also unhappy, as they had contracts to use their devices. Now they have to change back to the old technology that worked, which takes time. The unhappiness continues as you consider the patients and their doctors, who have had to make medical decisions based on the false readings from faulty devices. The only one in this whole case that I can see as being happy about this outcome is Siemens, the company who made the units that Theranos used instead of their "Edison" machine. It is very clear that Theranos was unethical from a utilitarian perspective, because it seems that it actually maximized unhappiness.

Kantianism:

Kantianism is mainly concerned with respect and rationality. The company should respect their own rationality and the rationality of others. Kantianism also says that you should only do something if it is for the right motive. Did the actions of Theranos come from Good Will? Was Theranos created for the sole purpose of helping people because it is the right thing to do? It seems that the company started as a botched ploy to get rich quick. From the very beginning, Theranos was lying to the public, and especially the patients who used their product. Holmes wasn't respecting the patients. She didn't give them the right of accurately analyzing their blood. Instead, she sabotaged their medical decisions. If a Kantian theorist were to analyze this case, they would argue that Theranos acted in an unethical way. 

Virtue Theory:
The virtue theory is a little bit different than the other theories mentioned above. In order to be successful, one must, "Act so as to embody a variety of virtuous or good character traits and so as to avoid vicious or bad character traits." There are a couple main virtues that apply to this case in particular. For example, some virtuous traits that one should strive to exemplify include Authenticity, Dignity, Generosity, and Integrity. Elizabeth Holmes and her company Theranos, have displayed none of these virtues- in fact, she presented the exact opposite. Holmes's whole company was founded on lies and deceit. The Holmes showed no dignity when she tried to lie her way out of the situation instead of coming out and telling the public the truth and working to fix it. Instead of being generous by providing a pain-free service to analyze blood samples, Theranos threw off medical decisions by not being accurate.

Justified Ethics Evaluation
I personally believe that Theranos acted in a very unethical way. I can't see how anything they did in their process could be considered acceptable. Elizabeth Holmes and her company made billions of dollars and their product didn't even work. Their blood analyzing machines weren't accurate and they knew it. However, they sold them to other companies and used them for a massive profit. I also think that Holmes handled the situation wrong when she got caught with fraudulent devices. I think she should have come clean and admitted what her company has been doing, and apologized to the public, as well as the companies that partnered with her. Instead she tried to make it seem as if she'd done nothing wrong, solidifying the concern of her unethical behavior. 

References

Lapowsky, Issie. "Theranos’ Scandal Exposes the Problem With Tech’s Hype Cycle." Wired. Conde Nast, 15 Oct. 2015. Web. 04 Apr. 2017.

Stockton, Nick. "Everything You Need to Know About the Theranos Saga So Far." Wired. Conde Nast, 04 May 2016. Web. 04 Apr. 2017.

Stockton, Nick. "Fixing the Laws That Let Theranos Hide Data Won’t Be Easy." Wired. Conde Nast, 20 Oct. 2015. Web. 04 Apr. 2017.

Bilton, Nick. "Exclusive: How Elizabeth Holmes's House of Cards Came Tumbling Down." The Hive. Vanity Fair, 07 Sept. 2016. Web. 04 Apr. 2017.