Theranos Would Be Thriving in the Covid-19 Pandemic

Relaxed regulations, misinformation, and a big potential payout are reminiscent of the conditions that cultivated Theranos

November 2015, the U.S. House of Representatives held a hearing about draft guidance from the U.S. Food and Drug Administration (FDA) about closing a regulatory loophole exploited by Theranos. However, the draft guidance was never put into law, with one congressman objecting, “Why in the world would a lab develop a test that wasn’t safe and accurate?” The short answer: because its founder wanted to become the world’s youngest self-made female billionaire.

We’ve seen the U.S. Centers for Disease Control and Prevention (CDC) flounder as it scrambled to develop a test for SARS-CoV-2, heard President Trump blame Obama-era regulations for the lack of tests, and are now hearing about serology tests that can determine if we can go back to work. Because of my role in exposing the Theranos scandal and starting a diagnostic company of my own, I have been asked countless times: “What is going on with coronavirus testing?” While there is certainly value in moving as fast as possible during this crisis, I am worried that we are creating an environment that facilitates many of the same mistakes Theranos made.

Theranos spent 15 years and nearly a billion dollars of venture capital and only got FDA clearance for one test — oral herpes, which is more commonly diagnosed by simple visual inspection than with a blood test. How can so many years and dollars result in such astonishing failure? Sure, bad scientific methods, poor engineering, terrible management, uninformed investors, a negligent board, and fraud played a part. But from my perspective, our worst and most pervasive sin was a simple one: cutting corners. We “launched” a product that claimed to perform hundreds of tests from a single drop of blood when in reality we could only do one. We needed to launch more tests, we needed to test more patients, and we needed to do so quickly. If there was a corner that could be cut, it was gone.

The deadline to get SARS-CoV-2 tests working and distributed was not artificial — Covid-19 was coming, whether we were prepared for it or not. And just like at Theranos, sweet talking, half-truths, and unfounded optimism were not going to help. The CDC rushed to develop and distribute a test, and the first tests were sent out on February 5, just weeks after development began. However, many labs found that the negative controls from the test kits produced positive results. This was a clear sign that the tests were not working. By the end of February, the CDC said it had only tested 1,235 people for SARS-CoV-2. For reference, South Korea had tested over 100,000 people by that time. On February 29, the FDA released a policy to guide the private sector in the development of tests for SARS-CoV-2.

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