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Walgreen Terminates Partnership with Theranos

310 points by dhawalhs 10y ago

GuiA 10y ago
The Theranos leadership belongs in jail. Misleading patients with bullshit medical science ranks pretty high up on the list of things that should get executives locked up. We are talking about tens of thousands of patients here whose doctors made medical choices based on fundamentally flawed blood work, all while Holmes and her buddies were boasting about how disruptive their technology was, how much better they were than the oh so misguided competition, and that validation data was coming very very soon. Plain criminal. Keep in mind, this is almost half a billion dollars of private investment money that just went up in smoke (and countless man hours from employees who thought they were doing the right thing). When you know how hard academic research labs have to work to get even a hundredth of that kind of funding - when they do much more to advance the field - it's just plain infuriating. But no, Elizabeth Holmes will get a movie about her, and they'll all fail upward in some fashion - won't be surprised to see them on various boards and advisor positions in the years to come. The rich get richer, while the general population gets fucked over- the apple is rotten to the core. I take a little comfort in knowing that something this extreme would never happen in more civilized countries (say Japan, Canada, most EU countries, some South American countries, usw.)
- bitshiftthis 10y ago
  Feels good after 4 years of dealing with smug people about Theranos and how they were going to change the world, deflecting all criticism as sexism (If I had a dollar for every time I heard "B-b-buh she's the female S-Steve J-J-Jobs") that the company crashed and burned in such spectacular fashion. At least the feds stepped in and tried to make a change, that must matter for something right? :^)
- jzwinck 10y ago
  I like Japan but I'm not sure you should hold it out here as an example of good corporate behavior: http://scmp.com/business/companies/article/1880094/partial-table-japanese-corporate-scandals http://scmp.com/business/companies/article/1880094/partial-t...
  - personjerry 10y ago
    IIRC a number of Japan's corporations still work fairly closely with the Yakuza, don't they?
    - ekianjo 10y ago
      Yes, even politicians.
- wpietri 10y ago
  I agree that Theranos's leadership belongs in jail. But I think it's worth reflecting a bit on how much our community created and benefits from the tech-genius hype cycle that they exploited. On how much we have supported a mythos that our cutting-edge innovations can't be judged by existing stick-in-the-mud regulators. I'm not saying that those are entirely bad things. But it's worth remembering that Theranos couldn't have happened without Silicon Valley. If we want to keep the latitude we've been given, maybe should be more vigorous about policing the people making use of it.
  - honkhonkpants 10y ago
    I don't think that's "our community". It certainly isn't my community. I believe (and hope) that the delusional libertarian wing of the entrepreneurial class, who believe that regulation has no place in a market, is a fringe element.
    - dnautics 10y ago
      Pretty sure most libertarians are ok with regulations when they involve possibly causing harm to someone's body or laying hands on someone's body or property, and fraud. This case hits two of those concerns.
      - nommm-nommm 10y ago
        Not from what I've seen posted here. Hopefully that is a very fringe group that's just very vocal.
    - HarryHirsch 10y ago
      The "no regulation faction" is fighting hard to get out of its corner. A few days ago, Jessica Flanigan (https://sites.google.com/site/jessicamflanigan/Research https://sites.google.com/site/jessicamflanigan/Research), an anti-FDA medicine ethicist at the University of Richmond, made the rounds on this very board. She shows how this group is trying to get its ideas accepted by the mainstream. Note that she is housed at a philosophy department! Physicians are trained to put patient outcomes first. If she were invited to speak at any medical school she would be torn to pieces. She wouldn't have any good answers how her positions would help prevent Elixir Sulfanilamide or now Theranos. The medical school I am associated with is in the South, in a conservative town, and she wouldn't fare well here. But I guess at a conservative philosophy department they don't ask that kind of hard questions. We need to fight to keep the libertarian fringe confined.
- dang 10y ago
  You're not going to find many defenders of Theranos at this point, but that doesn't mean this isn't a bad comment to post to HN. We ask users here to post reflective comments, not ones that try to maximize fury—no matter how right you are or how angry you feel. The fact that you end your comment with a cheap slur about "more civilized countries" is indicative.
  - niels_olson 10y ago
    Dang, I appreciate where you're coming from, and understand your sentiment. However, as a pathologist, and having sworn to defend the US Constitution for over 20 years, and having visited a number of the countries he mentioned, I'm inclined to not disagree with the poster. And I am inclined to suggest that killing people for profit is the best single basis for righteous fury.
    - delish 10y ago
      In my estimation (I'd like to be wrong!) righteous fury adds nothing to the pursuit of insight. And, again in my estimation,[0] we'll better distribute justice if we stay unbiased and seek to understand the situation. The people at Theranos, especially the wrongdoers, probably want to be and feel understood. I think that's a step toward insight and justice. Maximizing fury (I love the turn of phrase) makes people defensive, which aborts the insight-pursuit. [0] Sorry to use so many qualifiers. Because I'm telling people how they should talk, I want to be as precise as possible.
    - dang 10y ago
      Inflaming indignation like that isn't righteous. It's a mob behavior, not much different whether the target is guilty or innocent. It's just more socially acceptable when the target is (or is seen as) guilty. Group rage is good for bonding a community—as Phil Ochs once put it, "the family that slays together stays together"—but that's not the kind of community we want HN to be. Indeed, how we react to situations where someone is (or is seen as) obviously guilty is a good measure of how well we're holding to that standard. I realize the above may sound counterintuitive, but consider that the comments we get are the best predictor of what we'll get more of. Do we want more of those? The dynamic they lead to is people one-upping each other with fiery denunciations and getting ever more reflexive. We can't have both that and reflective discourse, and we want reflective discourse, including about bad things.
- forgetsusername 10y ago
  >The Theranos leadership belongs in jail Let's ensure that actual crimes have been committed before we go throwing people in jail.
  - pkaye 10y ago
    Perhaps civil forfeiture? Because apparently it is okay to do it to individuals.
    - ycombobreaker 10y ago
      Let's not legitimize that behavior.
    - madgar 10y ago
      More seriously, could one of Theranos' large minority shareholders (successfully) sue to freeze their assets, keeping any cash liquid? How bad of shape does a company need to be in before that becomes viable?
- readams 10y ago
  Fortunately we have a system of law and not based on outrage.
FreedomToCreate 10y ago
It still baffles me that Walgreens got into this partnership in the first place. A complete failure of due diligence.
- tuna-piano 10y ago
  How many of us could name the current or former Walgreens CEO? I've seen a certain mentality in people, including managers in the more "boring" companies in our economy. Silicon Valey companies are glamorous. There's a certain star mentality about it. Silicon Valley is in the news, the founders are rock stars. I think the management of "boring" companies is as star struck as the rest of us are. They shouldn't be- they run huge companies employing many people, doing complex things and making profits. In this case, the star power blinded them and they'll pay a large price.
  - adw 10y ago
    Stefano Pessina. One of the most impressive European entrepreneurs. And he's CEO because the pre-existing management, who got them into this mess, were terrible.
    - oneloop 10y ago
      Out of interest, what is it that you do in your life that you're informed about such unusual knowledge?
      - rjsw 10y ago
        The Walgreens Boots Alliance group have been in the news recently because of accusations of charging for unnecessary drug reviews for customers by the Boots part.
      - adw 10y ago
        Professionally I'm a data scientist, but vocationally I'm interested in how the world works, and "real industry" is an important part of that. Also, I'm British, and the Alliance Boots deal was big news.
minimaxir 10y ago
The previous news story was that Walgreens discontinued sending blood to Theranos in light of the allegations. If the partnership is terminated, then Walgreens must know something is very off.
grizzles 10y ago
It's shocking to find out that a science education is actually pretty useful for leading a science company. DFJ and the other investors should be getting way more of the blame for not doing proper due diligence on Theranos. It's kind of amazing in a way that the company is still a going concern. There is going to be no salvaging this company, because it has nothing of value. What a shmozzle.
- tlb 10y ago
  On the other hand, out of the top 5 pharma companies, only 3/5 CEOs have science degrees: (Edit: was 1, wasn't counting medical degrees before) #1: Novartis: Economics, MBA #2: Pfizer: BS chemical engineering, chartered accountancy #3: Roche: economics, law #4: Sanofi: MD #5: Merck: veterinary medicine, PhD So a person who didn't know any better might not assume a science degree was necessary.
  - dragonwriter 10y ago
    I don't see one with a science degree. I see two with science degrees -- both in the same social science, each of which also has a professional degree in addition -- one with an engineering degree, and two with professional degrees in medicine (one if which is veterinary).
  - grizzles 10y ago
    Do you think it's fair to compare a startup with established multinational companies that have profits and a serious track record? These investors are presumably investing in something, not writing a blank cheque. I could go start a space mining company tomorrow, with a view towards building a space shuttle that was powered by a single drop of oil but I would assume that I would have some trouble raising capital without some kind of verification of my claims.
  - deleted 10y ago
    [deleted]
  - PhasmaFelis 10y ago
    > #5: Merck: veterinary medicine, PhD I'm really curious what sort of path takes someone from training to be a vet to heading up a global pharmaceuticals company.
deleted 10y ago
[deleted]
aresant 10y ago
"In recent weeks, Walgreens also was named as a co-defendant in one of three civil lawsuits filed by consumers against Theranos. The suits, which seek class-action status, allege that Theranos misled the public about the nature and accuracy of its blood-testing technology." Walgreens had an official partnership, including an investment of $50m, into Theranos. If there is actual consumer damage shown its Walgreens that's going to find themselves writing checks to tort classes and attorneys. In the entire WSJ expose it sounded like Walgreens management was as snowed-over as the rest of us with regard to Theranos' "technology" but it's crazy that they didn't do more relatively simple due diligence given their exposure
- jalonso510 10y ago
  Who's writing the checks really depends on what's in the contract between Walgreens and Theranos. I haven't seen it, but it wouldn't be out of the ordinary for Theranos to have agreed to indemnify Walgreens against claims over the accuracy of the tests. If so, Theranos would be on the hook even if Walgreens is getting sued as well, and the real question is how big the claims are and whether they will be enough to to bankrupt Theranos.
  - mathattack 10y ago
    In this case I believe that the contract was very tilted towards Theranos. The execs in charge were forced out previously. [0] I don't know any specifics on indemnification though, but if Theranos goes under, they can't indemnify much. [0] http://www.nytimes.com/2016/04/22/business/a-once-avid-ally-walgreens-is-struggling-to-shake-off-theranos.html http://www.nytimes.com/2016/04/22/business/a-once-avid-ally-...
    - pdabbadabba 10y ago
      > if Theranos goes under, they can't indemnify much. Insurance!
      - mathattack 10y ago
smaili 10y ago
Anyone happen to know why this took so long to become official? EDIT: Looks like it's mentioned a few paragraphs into the article: Walgreens leaders decided to end the partnership after regulators disclosed problems at Theranos in late January, but held off on finalizing the separation because the company feared Theranos might sue, said people familiar with the matter.
- metalliqaz 10y ago
  They must have realized that Theranos is going to sue no matter what happens.
  - joshdickson 10y ago
    Not quite - Walgreens believes that the CMS punishment, which is expected in the next two weeks, will be sufficiently harsh enough that it will win a case against Theranos. If they lost the case, they could have potentially been on the hook for hundreds of millions or even billions of dollars in damages (i.e. so much money that even with the incredibly bad press of not severing the deal sooner, it still made more sense to keep the deal until things got to where they are now). https://twitter.com/joshdickson40/status/742154076851408898 https://twitter.com/joshdickson40/status/742154076851408898
bane 10y ago
Walgreens managers also grew increasingly frustrated in recent weeks with Theranos as they sought information about the extent of test reports it had corrected or voided. This seems to be a common thread in the stories I've read about Theranos, an almost pathological inability to provide basic information upon request. I can only guess that Holmes' notion of open and transparent communication is defined very differently from what most people would consider it to mean. A big warning sign to me is also the bizarre collection of company reviews on Glassdoor [1]. It's really fascinating to me that anybody would even consider turfing their own company's reviews with this kind of ham fisted, single voice corporate speak nonsense. I wonder who inside the company is responsible for writing all of these? Holmes herself? Regardless, it's a really fascinating look into how Holmes has prioritized things. 1 - https://www.glassdoor.com/Reviews/Theranos-Reviews-E248889.htm?sort.sortType=RD&sort.ascending=false&filter.employmentStatus=REGULAR&filter.employmentStatus=PART_TIME&filter.employmentStatus=UNKNOWN https://www.glassdoor.com/Reviews/Theranos-Reviews-E248889.h...
- tb303 10y ago
  Theranos' relationship with GlassDoor is rich. You should have seen the posts up there before Theranos went after them with lawyers.
- dominotw 10y ago
  This is hilarious https://www.glassdoor.com/Reviews/Employee-Review-Theranos-RVW6516521.htm https://www.glassdoor.com/Reviews/Employee-Review-Theranos-R... Advice to Management You are doing a good job. Stay in better touch with the employees. I think most people do feel appreciated but there are also some that are disgruntled and unhappy for other reasons. I see these people spreading negative energy. You should seek them and try and fix the problem. Is it common practice among upstart companies to pad their reviews on glassdoor. I've been using those as references for my job search, I know better now.
  - askafriend 10y ago
    They are absolutely padded and padding is even encouraged at some places. Even companies like FB do it.
_audakel 10y ago
1 - Theranos should have been more transparent, but what startup doesn't stretch the truth or even leave out data on occasion? It is a fine line between lying and hustling. Startups can often talk about something that doesn't exist yet like it does because they can move fast enough to build it. 2 - I worked at a medical startup in Palo Alto and I can attest that it is incredibly hard complying with all the FDA rules. Many are regulations that do little to protect consumers and exist from an outdated bureaucratic system. Others are lobbied into existence by big players like JNJ to protect themselves from startups like Theranos. 3 - Theranos was trying to do something that few people do - truly inovate in the medical world. As a country we have come to a point where little inovation is possilbe bc so many rules prevent the change necessary. We are not willing to accept any risk, and so we are stuck without progress. 4 - Before we all hop on the hate Theranos band wagon, lets remember that they did what all startups do - move fast and break things.
- minimaxir 10y ago
  > 4 - Before we all hop on the hate Theranos band wagon, lets remember that they did what all startups do - move fast and break things. There are some things like medical information which should not be broken, and worst of all, lying about it.
- tuna-piano 10y ago
  You may be right with all your points. But did Walgreens know this was Theranos' mentality? The investors, patients, the doctors using the unreliable test results? If the Theranos stakeholders all hopped on to the "move fast and break things" train- I'd be all for it. Facebook had that as their well known public motto and people still invested and used the service. People don't want to break things when it comes to their health.
- SyneRyder 10y ago
  "It is a fine line between lying and hustling." You just highlighted why I think "hustle" is a terrible word for the startup community to embrace. Google's dictionary (appears to be the Oxford dictionary) includes the definition "a fraud or swindle / to obtain illicitly or by forceful action". The Cambridge dictionary lists "A dishonest way of making money / to try to persuade someone, especially to buy something, often illegally". By those definitions, there is no fine line - they're the same thing.
dennyis 10y ago
Man I've gotta say that despite all the bad news this really bums me out. I love being able to run down to Walgreens, order my own blood tests, and get the results without a doctor or a big hassle.
- danieltillett 10y ago
  I can make it even more convenient - get out a couple of dice and roll them across your desk. If the total is under 7 you are ok otherwise go to the doctor for some competently run test.
- wmt 10y ago
  Do you care if the results are garbage or not? Because that's why they're booting them out, all Edison results from 2014 and 2015 were voided. http://www.wsj.com/articles/theranos-voids-two-years-of-edison-blood-test-results-1463616976 http://www.wsj.com/articles/theranos-voids-two-years-of-edis...
- oneloop 10y ago
  Guys, I think I found Holmes.
- madgar 10y ago
  In my city you can get a walk-in palm reading by a psychic for less money than a Theranos blood test.
- whacker 10y ago
  All the other replies are misinterpreting this: There was once hope that this would democratize/commoditize medical testing. Sad that it did not come true.
meeper16 10y ago
The hallmark of a good product is whether or not the founder, founding team, board and few key shareholders are using the product. I'd like to hear more about this.
- Retra 10y ago
  That's useful if they're not all cranks trying to sell perpetual motion, organic food, or placebos.
- barkingdog 10y ago
  Well...let's agree to disagree because I say the hallmark is whether the business model is sustainable, which I'm not sure your heuristic completely fields. Deal? To be fair, it did look like the business model had legs here for a while.
- yongjik 10y ago
  Depends on the product. (E.g., funeral service?)
- nommm-nommm 10y ago
  Nor really, most products aren't designed for consumer use. If a company makes nuclear weapons, I hope the board members are not using them. Board members may not have a use for straight jackets, body armor, cash registers, oil rigs, industrial equipment, commercial fishing vessels, you get the point. Even if the product is great, the business model could suck and the company will fail.
beilabs 10y ago
Has there been any confirmed cases where someone has died as a result of a faulty Theranos test during this period? Surely that would be the final nail in the coffin of such a mismanaged enterprise...
- pyrophane 10y ago
  No. If that were to happen then I imagine that the discussion would shift to which Theranos executives will be going to prison.
cracks4download 10y ago
fake reviews
kqr2 10y ago
Official statement from Theranos: https://theranos.com/news/posts/statement-from-theranos-7 https://theranos.com/news/posts/statement-from-theranos-7 Quality and safety are our top priorities and we are working closely with government officials to ensure that we not only comply with all federal regulations but exceed them. We are disappointed that Walgreens has chosen to terminate our relationship and remain fully committed to our mission to provide patients access to affordable health information and look forward to continuing to serve customers in Arizona and California through our independent retail locations.
lordnacho 10y ago
Are the tests just completely worthless? I thought the FDA or such would mandate a battery of studies to determine whether the tests were accurate before letting someone sell them. The fact that a major chain was selling them also seemed to indicate to me that there was something real in Theranos. Probably a lot of people think the same way, and are disappointed.
- seehafer 10y ago
  No, the regulatory system is actually doing its job. The regulatory system is predicated on the government not being all knowing and all seeing and private actors in the industry having a bit of sense and doing their own due diligence. To structure it otherwise would basically make it impossible for any health tech startup to get off the ground -- the time required, and the capital requirements would be insane. To summarize regulatory action: Theranos sent in a marketing application to FDA for one of the use of Edison with one test, FDA said OK, this looks good based on the data you sent us (FDA can only see what you send them). FDA then placed Theranos on an audit list (common practice for any new company), stopped by after a few months, and found out that Theranos' own internal procedures for making sure that the data they generate about their product's performance is honest were, shall we say, poor. They also found Theranos marketing other components that they had not sought clearance to market from FDA. So FDA issued a 483 (deficiency notice) and the fallout from that we have yet to see. (I personally think there will be another shoe to drop here.) Now, on the lab side, which is regulated by the Center for Medicare and Medicaid Systems, not FDA, the process is different. Basically CMS allows you to get a preliminary certificate after a cursory inspection and gives you 2 years within which to build a real testing process and get your shit together before they do the real audit. Theranos's Bay Area lab got the preliminary certificate and massively failed the real audit, and then massively failed to fix anything, which is what's landing Holmes in potentially very hot water (being banned from the diagnostic industry for two years in the US). The reason this is structured this way is that 1) to have enough data for a meaningful audit takes time and 2) the government expects anyone contracting with a brand new lab for the first two years to understand that it's a brand new lab and act accordingly (i.e. be skeptical, do your own audit, don't take NewCo's evidence at face value). Most people in the industry understand this. Hell, most people at Walgreens understood this and were properly skeptical [1]. But the top execs at the time overrode the valid concerns of their QC people in order to chase the unicorn. [1] http://www.wsj.com/articles/craving-growth-walgreens-dismissed-its-doubts-about-theranos-1464207285 http://www.wsj.com/articles/craving-growth-walgreens-dismiss...
mathattack 10y ago
It's about time. I'd be very surprised if Walgreens doesn't have a legal liability as a result of taking so long to cancel the partnership.
seesomesense 10y ago
Consumer class action litigation against Walgreens has started and will go on for decades.
tim333 10y ago
I look forward to the movie version of this fiasco with Jennifer Lawrence playing Holmes http://www.independent.co.uk/arts-entertainment/films/news/jennifer-lawrence-to-play-controversial-silicon-valley-ceo-elizabeth-holmes-a7077886.html http://www.independent.co.uk/arts-entertainment/films/news/j...
perseusprime11 10y ago
What took them so long?
korginator 10y ago
Walgreens done messed up their due diligence big time. They have no one to blame but themselves. Greed drove them to this.

310 points by dhawalhs 10y ago

GuiA 10y ago

The Theranos leadership belongs in jail. Misleading patients with bullshit medical science ranks pretty high up on the list of things that should get executives locked up. We are talking about tens of thousands of patients here whose doctors made medical choices based on fundamentally flawed blood work, all while Holmes and her buddies were boasting about how disruptive their technology was, how much better they were than the oh so misguided competition, and that validation data was coming very very soon. Plain criminal. Keep in mind, this is almost half a billion dollars of private investment money that just went up in smoke (and countless man hours from employees who thought they were doing the right thing). When you know how hard academic research labs have to work to get even a hundredth of that kind of funding - when they do much more to advance the field - it's just plain infuriating. But no, Elizabeth Holmes will get a movie about her, and they'll all fail upward in some fashion - won't be surprised to see them on various boards and advisor positions in the years to come. The rich get richer, while the general population gets fucked over- the apple is rotten to the core. I take a little comfort in knowing that something this extreme would never happen in more civilized countries (say Japan, Canada, most EU countries, some South American countries, usw.)

bitshiftthis 10y ago
Feels good after 4 years of dealing with smug people about Theranos and how they were going to change the world, deflecting all criticism as sexism (If I had a dollar for every time I heard "B-b-buh she's the female S-Steve J-J-Jobs") that the company crashed and burned in such spectacular fashion. At least the feds stepped in and tried to make a change, that must matter for something right? :^)
jzwinck 10y ago
I like Japan but I'm not sure you should hold it out here as an example of good corporate behavior: http://scmp.com/business/companies/article/1880094/partial-table-japanese-corporate-scandals http://scmp.com/business/companies/article/1880094/partial-t...
- personjerry 10y ago
  IIRC a number of Japan's corporations still work fairly closely with the Yakuza, don't they?
  - ekianjo 10y ago
    Yes, even politicians.
wpietri 10y ago
I agree that Theranos's leadership belongs in jail. But I think it's worth reflecting a bit on how much our community created and benefits from the tech-genius hype cycle that they exploited. On how much we have supported a mythos that our cutting-edge innovations can't be judged by existing stick-in-the-mud regulators. I'm not saying that those are entirely bad things. But it's worth remembering that Theranos couldn't have happened without Silicon Valley. If we want to keep the latitude we've been given, maybe should be more vigorous about policing the people making use of it.
- honkhonkpants 10y ago
  I don't think that's "our community". It certainly isn't my community. I believe (and hope) that the delusional libertarian wing of the entrepreneurial class, who believe that regulation has no place in a market, is a fringe element.
  - dnautics 10y ago
    Pretty sure most libertarians are ok with regulations when they involve possibly causing harm to someone's body or laying hands on someone's body or property, and fraud. This case hits two of those concerns.
    - nommm-nommm 10y ago
      Not from what I've seen posted here. Hopefully that is a very fringe group that's just very vocal.
  - HarryHirsch 10y ago
    The "no regulation faction" is fighting hard to get out of its corner. A few days ago, Jessica Flanigan (https://sites.google.com/site/jessicamflanigan/Research https://sites.google.com/site/jessicamflanigan/Research), an anti-FDA medicine ethicist at the University of Richmond, made the rounds on this very board. She shows how this group is trying to get its ideas accepted by the mainstream. Note that she is housed at a philosophy department! Physicians are trained to put patient outcomes first. If she were invited to speak at any medical school she would be torn to pieces. She wouldn't have any good answers how her positions would help prevent Elixir Sulfanilamide or now Theranos. The medical school I am associated with is in the South, in a conservative town, and she wouldn't fare well here. But I guess at a conservative philosophy department they don't ask that kind of hard questions. We need to fight to keep the libertarian fringe confined.
dang 10y ago
You're not going to find many defenders of Theranos at this point, but that doesn't mean this isn't a bad comment to post to HN. We ask users here to post reflective comments, not ones that try to maximize fury—no matter how right you are or how angry you feel. The fact that you end your comment with a cheap slur about "more civilized countries" is indicative.
- niels_olson 10y ago
  Dang, I appreciate where you're coming from, and understand your sentiment. However, as a pathologist, and having sworn to defend the US Constitution for over 20 years, and having visited a number of the countries he mentioned, I'm inclined to not disagree with the poster. And I am inclined to suggest that killing people for profit is the best single basis for righteous fury.
  - delish 10y ago
    In my estimation (I'd like to be wrong!) righteous fury adds nothing to the pursuit of insight. And, again in my estimation,[0] we'll better distribute justice if we stay unbiased and seek to understand the situation. The people at Theranos, especially the wrongdoers, probably want to be and feel understood. I think that's a step toward insight and justice. Maximizing fury (I love the turn of phrase) makes people defensive, which aborts the insight-pursuit. [0] Sorry to use so many qualifiers. Because I'm telling people how they should talk, I want to be as precise as possible.
  - dang 10y ago
    Inflaming indignation like that isn't righteous. It's a mob behavior, not much different whether the target is guilty or innocent. It's just more socially acceptable when the target is (or is seen as) guilty. Group rage is good for bonding a community—as Phil Ochs once put it, "the family that slays together stays together"—but that's not the kind of community we want HN to be. Indeed, how we react to situations where someone is (or is seen as) obviously guilty is a good measure of how well we're holding to that standard. I realize the above may sound counterintuitive, but consider that the comments we get are the best predictor of what we'll get more of. Do we want more of those? The dynamic they lead to is people one-upping each other with fiery denunciations and getting ever more reflexive. We can't have both that and reflective discourse, and we want reflective discourse, including about bad things.
forgetsusername 10y ago
>The Theranos leadership belongs in jail Let's ensure that actual crimes have been committed before we go throwing people in jail.
- pkaye 10y ago
  Perhaps civil forfeiture? Because apparently it is okay to do it to individuals.
  - ycombobreaker 10y ago
    Let's not legitimize that behavior.
  - madgar 10y ago
    More seriously, could one of Theranos' large minority shareholders (successfully) sue to freeze their assets, keeping any cash liquid? How bad of shape does a company need to be in before that becomes viable?
readams 10y ago
Fortunately we have a system of law and not based on outrage.

FreedomToCreate 10y ago

It still baffles me that Walgreens got into this partnership in the first place. A complete failure of due diligence.

tuna-piano 10y ago
How many of us could name the current or former Walgreens CEO? I've seen a certain mentality in people, including managers in the more "boring" companies in our economy. Silicon Valey companies are glamorous. There's a certain star mentality about it. Silicon Valley is in the news, the founders are rock stars. I think the management of "boring" companies is as star struck as the rest of us are. They shouldn't be- they run huge companies employing many people, doing complex things and making profits. In this case, the star power blinded them and they'll pay a large price.
- adw 10y ago
  Stefano Pessina. One of the most impressive European entrepreneurs. And he's CEO because the pre-existing management, who got them into this mess, were terrible.
  - oneloop 10y ago
    Out of interest, what is it that you do in your life that you're informed about such unusual knowledge?
    - rjsw 10y ago
      The Walgreens Boots Alliance group have been in the news recently because of accusations of charging for unnecessary drug reviews for customers by the Boots part.
    - adw 10y ago
      Professionally I'm a data scientist, but vocationally I'm interested in how the world works, and "real industry" is an important part of that. Also, I'm British, and the Alliance Boots deal was big news.

minimaxir 10y ago

The previous news story was that Walgreens discontinued sending blood to Theranos in light of the allegations. If the partnership is terminated, then Walgreens must know something is very off.

grizzles 10y ago

It's shocking to find out that a science education is actually pretty useful for leading a science company. DFJ and the other investors should be getting way more of the blame for not doing proper due diligence on Theranos. It's kind of amazing in a way that the company is still a going concern. There is going to be no salvaging this company, because it has nothing of value. What a shmozzle.

tlb 10y ago
On the other hand, out of the top 5 pharma companies, only 3/5 CEOs have science degrees: (Edit: was 1, wasn't counting medical degrees before) #1: Novartis: Economics, MBA #2: Pfizer: BS chemical engineering, chartered accountancy #3: Roche: economics, law #4: Sanofi: MD #5: Merck: veterinary medicine, PhD So a person who didn't know any better might not assume a science degree was necessary.
- dragonwriter 10y ago
  I don't see one with a science degree. I see two with science degrees -- both in the same social science, each of which also has a professional degree in addition -- one with an engineering degree, and two with professional degrees in medicine (one if which is veterinary).
- grizzles 10y ago
  Do you think it's fair to compare a startup with established multinational companies that have profits and a serious track record? These investors are presumably investing in something, not writing a blank cheque. I could go start a space mining company tomorrow, with a view towards building a space shuttle that was powered by a single drop of oil but I would assume that I would have some trouble raising capital without some kind of verification of my claims.
- deleted 10y ago
  [deleted]
- PhasmaFelis 10y ago
  > #5: Merck: veterinary medicine, PhD I'm really curious what sort of path takes someone from training to be a vet to heading up a global pharmaceuticals company.

deleted 10y ago

[deleted]

aresant 10y ago

"In recent weeks, Walgreens also was named as a co-defendant in one of three civil lawsuits filed by consumers against Theranos. The suits, which seek class-action status, allege that Theranos misled the public about the nature and accuracy of its blood-testing technology." Walgreens had an official partnership, including an investment of $50m, into Theranos. If there is actual consumer damage shown its Walgreens that's going to find themselves writing checks to tort classes and attorneys. In the entire WSJ expose it sounded like Walgreens management was as snowed-over as the rest of us with regard to Theranos' "technology" but it's crazy that they didn't do more relatively simple due diligence given their exposure

jalonso510 10y ago
Who's writing the checks really depends on what's in the contract between Walgreens and Theranos. I haven't seen it, but it wouldn't be out of the ordinary for Theranos to have agreed to indemnify Walgreens against claims over the accuracy of the tests. If so, Theranos would be on the hook even if Walgreens is getting sued as well, and the real question is how big the claims are and whether they will be enough to to bankrupt Theranos.
- mathattack 10y ago
  In this case I believe that the contract was very tilted towards Theranos. The execs in charge were forced out previously. [0] I don't know any specifics on indemnification though, but if Theranos goes under, they can't indemnify much. [0] http://www.nytimes.com/2016/04/22/business/a-once-avid-ally-walgreens-is-struggling-to-shake-off-theranos.html http://www.nytimes.com/2016/04/22/business/a-once-avid-ally-...
  - pdabbadabba 10y ago
    > if Theranos goes under, they can't indemnify much. Insurance!
    - mathattack 10y ago

smaili 10y ago

Anyone happen to know why this took so long to become official? EDIT: Looks like it's mentioned a few paragraphs into the article: Walgreens leaders decided to end the partnership after regulators disclosed problems at Theranos in late January, but held off on finalizing the separation because the company feared Theranos might sue, said people familiar with the matter.

metalliqaz 10y ago
They must have realized that Theranos is going to sue no matter what happens.
- joshdickson 10y ago
  Not quite - Walgreens believes that the CMS punishment, which is expected in the next two weeks, will be sufficiently harsh enough that it will win a case against Theranos. If they lost the case, they could have potentially been on the hook for hundreds of millions or even billions of dollars in damages (i.e. so much money that even with the incredibly bad press of not severing the deal sooner, it still made more sense to keep the deal until things got to where they are now). https://twitter.com/joshdickson40/status/742154076851408898 https://twitter.com/joshdickson40/status/742154076851408898

bane 10y ago

Walgreens managers also grew increasingly frustrated in recent weeks with Theranos as they sought information about the extent of test reports it had corrected or voided. This seems to be a common thread in the stories I've read about Theranos, an almost pathological inability to provide basic information upon request. I can only guess that Holmes' notion of open and transparent communication is defined very differently from what most people would consider it to mean. A big warning sign to me is also the bizarre collection of company reviews on Glassdoor [1]. It's really fascinating to me that anybody would even consider turfing their own company's reviews with this kind of ham fisted, single voice corporate speak nonsense. I wonder who inside the company is responsible for writing all of these? Holmes herself? Regardless, it's a really fascinating look into how Holmes has prioritized things. 1 - https://www.glassdoor.com/Reviews/Theranos-Reviews-E248889.htm?sort.sortType=RD&sort.ascending=false&filter.employmentStatus=REGULAR&filter.employmentStatus=PART_TIME&filter.employmentStatus=UNKNOWN https://www.glassdoor.com/Reviews/Theranos-Reviews-E248889.h...

tb303 10y ago
Theranos' relationship with GlassDoor is rich. You should have seen the posts up there before Theranos went after them with lawyers.
dominotw 10y ago
This is hilarious https://www.glassdoor.com/Reviews/Employee-Review-Theranos-RVW6516521.htm https://www.glassdoor.com/Reviews/Employee-Review-Theranos-R... Advice to Management You are doing a good job. Stay in better touch with the employees. I think most people do feel appreciated but there are also some that are disgruntled and unhappy for other reasons. I see these people spreading negative energy. You should seek them and try and fix the problem. Is it common practice among upstart companies to pad their reviews on glassdoor. I've been using those as references for my job search, I know better now.
- askafriend 10y ago
  They are absolutely padded and padding is even encouraged at some places. Even companies like FB do it.

_audakel 10y ago

1 - Theranos should have been more transparent, but what startup doesn't stretch the truth or even leave out data on occasion? It is a fine line between lying and hustling. Startups can often talk about something that doesn't exist yet like it does because they can move fast enough to build it. 2 - I worked at a medical startup in Palo Alto and I can attest that it is incredibly hard complying with all the FDA rules. Many are regulations that do little to protect consumers and exist from an outdated bureaucratic system. Others are lobbied into existence by big players like JNJ to protect themselves from startups like Theranos. 3 - Theranos was trying to do something that few people do - truly inovate in the medical world. As a country we have come to a point where little inovation is possilbe bc so many rules prevent the change necessary. We are not willing to accept any risk, and so we are stuck without progress. 4 - Before we all hop on the hate Theranos band wagon, lets remember that they did what all startups do - move fast and break things.

minimaxir 10y ago
> 4 - Before we all hop on the hate Theranos band wagon, lets remember that they did what all startups do - move fast and break things. There are some things like medical information which should not be broken, and worst of all, lying about it.
tuna-piano 10y ago
You may be right with all your points. But did Walgreens know this was Theranos' mentality? The investors, patients, the doctors using the unreliable test results? If the Theranos stakeholders all hopped on to the "move fast and break things" train- I'd be all for it. Facebook had that as their well known public motto and people still invested and used the service. People don't want to break things when it comes to their health.
SyneRyder 10y ago
"It is a fine line between lying and hustling." You just highlighted why I think "hustle" is a terrible word for the startup community to embrace. Google's dictionary (appears to be the Oxford dictionary) includes the definition "a fraud or swindle / to obtain illicitly or by forceful action". The Cambridge dictionary lists "A dishonest way of making money / to try to persuade someone, especially to buy something, often illegally". By those definitions, there is no fine line - they're the same thing.

dennyis 10y ago

Man I've gotta say that despite all the bad news this really bums me out. I love being able to run down to Walgreens, order my own blood tests, and get the results without a doctor or a big hassle.

danieltillett 10y ago
I can make it even more convenient - get out a couple of dice and roll them across your desk. If the total is under 7 you are ok otherwise go to the doctor for some competently run test.
wmt 10y ago
Do you care if the results are garbage or not? Because that's why they're booting them out, all Edison results from 2014 and 2015 were voided. http://www.wsj.com/articles/theranos-voids-two-years-of-edison-blood-test-results-1463616976 http://www.wsj.com/articles/theranos-voids-two-years-of-edis...
oneloop 10y ago
Guys, I think I found Holmes.
madgar 10y ago
In my city you can get a walk-in palm reading by a psychic for less money than a Theranos blood test.
whacker 10y ago
All the other replies are misinterpreting this: There was once hope that this would democratize/commoditize medical testing. Sad that it did not come true.

meeper16 10y ago

The hallmark of a good product is whether or not the founder, founding team, board and few key shareholders are using the product. I'd like to hear more about this.

Retra 10y ago
That's useful if they're not all cranks trying to sell perpetual motion, organic food, or placebos.
barkingdog 10y ago
Well...let's agree to disagree because I say the hallmark is whether the business model is sustainable, which I'm not sure your heuristic completely fields. Deal? To be fair, it did look like the business model had legs here for a while.
yongjik 10y ago
Depends on the product. (E.g., funeral service?)
nommm-nommm 10y ago
Nor really, most products aren't designed for consumer use. If a company makes nuclear weapons, I hope the board members are not using them. Board members may not have a use for straight jackets, body armor, cash registers, oil rigs, industrial equipment, commercial fishing vessels, you get the point. Even if the product is great, the business model could suck and the company will fail.

beilabs 10y ago

Has there been any confirmed cases where someone has died as a result of a faulty Theranos test during this period? Surely that would be the final nail in the coffin of such a mismanaged enterprise...

pyrophane 10y ago
No. If that were to happen then I imagine that the discussion would shift to which Theranos executives will be going to prison.

cracks4download 10y ago

fake reviews

kqr2 10y ago

Official statement from Theranos: https://theranos.com/news/posts/statement-from-theranos-7 https://theranos.com/news/posts/statement-from-theranos-7 Quality and safety are our top priorities and we are working closely with government officials to ensure that we not only comply with all federal regulations but exceed them. We are disappointed that Walgreens has chosen to terminate our relationship and remain fully committed to our mission to provide patients access to affordable health information and look forward to continuing to serve customers in Arizona and California through our independent retail locations.

lordnacho 10y ago

Are the tests just completely worthless? I thought the FDA or such would mandate a battery of studies to determine whether the tests were accurate before letting someone sell them. The fact that a major chain was selling them also seemed to indicate to me that there was something real in Theranos. Probably a lot of people think the same way, and are disappointed.

seehafer 10y ago
No, the regulatory system is actually doing its job. The regulatory system is predicated on the government not being all knowing and all seeing and private actors in the industry having a bit of sense and doing their own due diligence. To structure it otherwise would basically make it impossible for any health tech startup to get off the ground -- the time required, and the capital requirements would be insane. To summarize regulatory action: Theranos sent in a marketing application to FDA for one of the use of Edison with one test, FDA said OK, this looks good based on the data you sent us (FDA can only see what you send them). FDA then placed Theranos on an audit list (common practice for any new company), stopped by after a few months, and found out that Theranos' own internal procedures for making sure that the data they generate about their product's performance is honest were, shall we say, poor. They also found Theranos marketing other components that they had not sought clearance to market from FDA. So FDA issued a 483 (deficiency notice) and the fallout from that we have yet to see. (I personally think there will be another shoe to drop here.) Now, on the lab side, which is regulated by the Center for Medicare and Medicaid Systems, not FDA, the process is different. Basically CMS allows you to get a preliminary certificate after a cursory inspection and gives you 2 years within which to build a real testing process and get your shit together before they do the real audit. Theranos's Bay Area lab got the preliminary certificate and massively failed the real audit, and then massively failed to fix anything, which is what's landing Holmes in potentially very hot water (being banned from the diagnostic industry for two years in the US). The reason this is structured this way is that 1) to have enough data for a meaningful audit takes time and 2) the government expects anyone contracting with a brand new lab for the first two years to understand that it's a brand new lab and act accordingly (i.e. be skeptical, do your own audit, don't take NewCo's evidence at face value). Most people in the industry understand this. Hell, most people at Walgreens understood this and were properly skeptical [1]. But the top execs at the time overrode the valid concerns of their QC people in order to chase the unicorn. [1] http://www.wsj.com/articles/craving-growth-walgreens-dismissed-its-doubts-about-theranos-1464207285 http://www.wsj.com/articles/craving-growth-walgreens-dismiss...

mathattack 10y ago

It's about time. I'd be very surprised if Walgreens doesn't have a legal liability as a result of taking so long to cancel the partnership.

seesomesense 10y ago

Consumer class action litigation against Walgreens has started and will go on for decades.

tim333 10y ago

I look forward to the movie version of this fiasco with Jennifer Lawrence playing Holmes http://www.independent.co.uk/arts-entertainment/films/news/jennifer-lawrence-to-play-controversial-silicon-valley-ceo-elizabeth-holmes-a7077886.html http://www.independent.co.uk/arts-entertainment/films/news/j...

perseusprime11 10y ago

What took them so long?

korginator 10y ago

Walgreens done messed up their due diligence big time. They have no one to blame but themselves. Greed drove them to this.