Theranos: Many Questions, but Very Few Answers

Clinical laboratory competitors talk about a secretive company and paint a different picture than the one in the media

WHEN A COMPANY THAT GOES PUBLIC WITH ITS GOALS, regularly and repeatedly declaring its lofty ambitions to do good for mankind by disrupting the status quo and replacing it with something new and wonderful, it invites itself to be judged by its actions and what it actually delivers.

Since Theranos of Palo Alto, California, made its public debut in September 2013 with an admiring profile in The Wall Street Journal, it has been closely scrutinized by many pathologists and clinical laboratory professionals.

They have legitimate interests in the company’s stated goals for several reasons. First, as healthcare professionals that provide patient care, most pathologists and lab scientists have a genuine interest in doing what’s right for the patient. Caring for sick people and keeping well people healthy is a major reason why they chose a career in laboratory medicine.

Second, when a for-profit company makes a public declaration that its ambition is nothing short of full disruption to the existing lab testing marketplace as it exists today, it is human nature to have fears and concerns about how such developments may undermine the financial stability of the lab testing organizations where pathologists and lab professionals work today.

Put these two areas of interest together, and it becomes obvious why Theranos is a subject of importance across the lab testing industry.

Technology Is An Unknown

This is why many questions are being asked. But because Theranos operates in a highly-secretive manner, other than the enthusiastic stories it gets placed in major media outlets, the company has revealed little of substance about its proprietary diagnostic technology, the accuracy of the testing methods it has developed, and how those methodologies correlate with FDA-cleared diagnostic assays in common use by clinical laboratories throughout the United States.

Because of patient safety concerns, both the public and the clinical laboratory profession have a genuine and valid interest in knowing and understanding the accuracy, reliability, and reproducibility of the innovative diagnostic technologies that the company repeatedly assures the public that it has developed.

The issue is credibility. Whether fair or not, Theranos has a credibility problem with pathologists, clinical chemists, and clinical laboratory scientists. It has itself to blame for this problem because it refuses to engage the scientific community in traditional ways. Why? Because it claims it needs to protect its proprietary technology.

Competitive Intelligence

To advance this story one step further, it is helpful for readers to understand that laboratory professionals across the United States are carefully watching its actions and sharing the tidbits of intelligence they’ve gathered. As is true of every industry, clinical lab professionals are observing, gathering stories, sharing anecdotes, and passing news of Theranos along to their colleagues. Some of this is competitive market intelligence and some of it happens during lab industry meetings.

This is happening now in Phoenix. Since Theranos opened its first specimen collection center there in late 2013, competing laboratories have regularly sent secret shoppers, employees, and even lab managers into Walgreens pharmacies to purchase lab tests and provide a specimen. They do this to assess the service provided to them as consumers and to see what a competitor is delivering.

Labs Compare Test Results

However, competing labs are also in a position to do something that consumers cannot do. Competing labs can draw blood from their secret shoppers at around the same time these employees visit a Theranos site at a Walgreens pharmacy. They can then perform the same lab tests as Theranos and compare the results. This form of competitive market intelligence has been in use for decades.

As noted above, competing labs have been surveying Theranos in this manner for more than one year now. So these labs are learning something about the level of service their employees received as consumers in a Walgreens pharmacy. In some cases, to compare for accuracy, competing labs have test results on the same individual that were reported by Theranos and by their own CLIA-licensed laboratories.

An additional source of market intelligence comes from physicians’ offices and from consumers themselves. As consumers and physicians interact with Theranos, they are sharing the positive and negative experiences with their clinical laboratory providers.

What all of this means is that-outside of Theranos-competing laboratories in Phoenix probably have the most knowledge about how Theranos is performing in the highly-competitive lab testing marketplace in Phoenix.

Measured by Its Statements

It should be noted that these competing labs are assessing Theranos against its own statements about how it will deliver clinical lab testing services that disrupt the existing industry and provide consumers with a lab testing experience that is less painful, more pleasant, and less expensive than services offered by other clinical lab companies.

In THE DARK REPORT issue of August 11, 2104, we summarized the public statements of Theranos as follows:

  • No need for a venipuncture. A simple finger stick is all that is required.
  • No need for 3-4 vacutainers of specimen. A micro-sample is adequate.
  • Theranos’ proprietary test technology returns answers in four hours.
  • Theranos says it can perform “hundreds of laboratory tests.”
  • Theranos is charging just 50% of the Medicare Part B lab test fees for the tests it performs.

The following is a review of what competing laboratories see Theranos doing in Phoenix, relative to these points. Theranos has been asked to comment on each of these points. No response was provided as of press time and THE DARK REPORT is prepared to provide statements by Theranos when they are received.

Finger Stick Specimen

On the specimen collection by a “less invasive” fingerstick versus a traditional venipuncture, Theranos appears to have a mixed record. This editor has visited Theranos twice in the past 12 months to have his blood tested.ider agreements.



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