Bad Blood

“Bad Blood” is a book by John Carreyou, about Theranos, Inc. and Elizabeth Holmes, its founder and CEO. Carreyou was the prizewinning Wall Street Journal reporter who broke the story, initially from sources inside the company, of the misrepresentations related to a device that Holmes maintained could do 200 blood tests on a prick of blood drawn from a finger. This would have made the traumatizing blood draw from the arm with a hypodermic needle unnecessary. Even though Theranos never got a device developed that could do more than a few tests from a drop of blood, and these inaccurately, she lied to investors, the media, politicians and government regulators for years. It was one of the most amazing frauds ever perpetrated in history. She fooled people such as Vice-President Joe Biden, who at one point viewed the lab and deemed it the “laboratory of the future”. Marquee investors such as Robert Kraft, Betsy DeVos, Robert Murdoch and Carlos Slim invested $900 million in the company without ever seeing the device work. Theranos attracted such renown board members as George Shultz and Henry Kissinger and persuaded Safeway and Walgreens to spend millions of dollars to set up clinics to use the Theranos’s device without seeing the device work or having any guarantees, other than from Holmes, that it would. John Hopkins Medical University was provided a presentation about the device by Holmes and pronounced the technology novel and sound but never was allowed to review the device closely.

Holmes was treated as a biomedical version of Steve Jobs or Bill Gates, even though a college dropout, and was at one time worth 4.5 billion, half of the 9 billion Theranos was valued at. She cast a hypnotic spell on even seasoned investors, mostly older white men, honing her pitch about a little girl who was afraid of needles and who now wanted to improve the world by providing faster, better blood tests. Holmes adopted a Silicon Valley philosophy, “fake it until you make it”, that had been adopted by many technology start-up companies who had a good idea but needed to entice investors for capital before they had time to finished developing their products. In the end, Holmes never could get her idea developed, and told increasing lies along the way to hide the failures so as not to disappoint investors and commercial partners. The idea itself was dubious as many of the standard blood tests could not be done on so small a blood sample, or at least the technology was many years away. What made Holmes’s fraud so bad was that patients blood was actually tested on some of their devices, and patients given results that were knowingly inaccurate, putting their health in jeopardy. Holmes harbored delusions of grandeur but couldn’t cope with the messy realities of bioengineering.

After Carreyrou’s front-page exposé was published in 2015, Theranos’s business prospects collapsed, directors resigned and the S.E.C. sued Holmes for fraud which she settled. The company also settled private suits. Federal regulators found numerous violations, including sloppy lab procedures and unreliable equipment which put patient health in jeopardy. Investors eventually fled and Theranos shut down in 2019. Holmes was convicted in 2022 of one count of conspiracy and three counts of wire fraud and is currently awaiting sentencing.

This was an excellent book with an amazing story that most anyone could be drawn to. It is the story of a person who had extreme ambition and would lie or do anything to maintain her popularity and reputation. It also shows how many otherwise sophisticated people can be taken in by a skillful lie and lack of due diligence.

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