Elizabeth Holmes, former CEO of formerly multi-billion dollar valued corporation Theranos, has been awaiting trial since June 2018 over charges of wire fraud and conspiracy to commit wire fraud. Theranos aimed to develop medical technology providing blood analyses and diagnoses outside of a hospital setting. The trial has been delayed until August 2020, granting the defense’s request to further review evidence. The nature of the fraud and the confidence it inspired in investors are important in considering the status of internet-connected medical devices. Maybe we should all review the evidence.
Vision / Reality + Investment / Fraud
As an undergraduate, Holmes imagined a wearable patch that would provide doctors with real-time changes in patients’ blood. This notion of patient data being collectable and analyzable (by patients, doctors, insurance companies, advertisers) inspires most internet-integrated personal medical devices. Refining the patch into a station that could quickly analyze small blood samples, Holmes left school and founded Theranos, securing deals from Safeway and Walgreens to begin implementing these stations at their stores. The product development story doesn’t progress much further than that. After repeated missed deadlines and inconclusive results, both companies cancelled their contracts in 2015 and 2016. Walgreens filed suit and receieved $30 million in damages.
At the same time, investment and valuation were skyrocketing. Within four years, the company had raised over $40 million. Ten years later, it was up to $400 million, and the company was valued at $9 billion. Over $100 million each was invested by: Rupert Murdoch, Betsy DeVos, Cox Media Group, and the Walton family. Obviously, there was a lot of media coverage during this time, which certainly fueled further investment, despite the concomitant failures of the device itself.
For health or money?
Things that have been energetically invested and promoted that end up failing (Fyre ) are easy routes into the hopes of investors, consumers, and the culture that shapes them. The dream of a pocket doctor is for patients not just to be able to record their medical data from outside of a clinic—like a FitBit might—but also to offer algorithmically-produced diagnoses. Devices such as these would, and do, create huge data troves revealing unseen information about users (‘patients’ seems less applicable at this point). That such a large amount of investment in Theranos devices came from retail and media moguls gives good reason to look for other (read: commercial) uses of such a depersonalized (replacing both the doctor and patient with figures) collection and analysis of medical information. The market for internet-connected healthcare devices was estimated two years ago to reach over $130 billion by 2021.