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Theranos Class Action: What You Need To Know


Theranos, a company once hailed as a revolution in modern medicine, has been hit with several class action lawsuits in the past week. The company claimed that state of the art machine named “Edison” would change the world by radically reducing the time and amount of blood necessary for blood tests. Far from the promised game changing innovation however, the lawsuits allege that the company engaged in false advertising and failed to follow proper medical lab procedure, possibly exposing consumers to inaccurate lab results.

The company’s current state of affairs stands in stark contrast to the thrilled media frenzy that accompanied its meteoric rise. Viewed as “disruptive”, a term used to describe innovations that change entire markets (the iPod being one of the most prominent examples), Theranos and its proprietary Edison blood test technology had all the trappings of a Silicon Valley success story.

The CEO, Elizabeth Holmes broke onto the startup scene as a young, charismatic, Ivy League dropout, having dropped out from Stanford freshman year to found Theranos. Equipped with anecdotes about how much she hated needles, and how this fear spurred her into trying to change existing blood test technology, she drew regular comparisons in the media to Steve Jobs for her groundbreaking ideas and compelling demeanor in interviews and public speaking events.

Private investors sunk $400 million into a company that allegedly refused to disclose anything regarding its breakthrough technology, claiming trade secrets too valuable to reveal to even potential investors, simply because of the mythos surrounding the company. In 2014, a second round of funding valued Theranos at $9 billion, and Elizabeth Holmes and her company became media darlings.

Business publications from Fortune to Businessweek rushed to print articles painting her an entrepreneurial icon. Accountability was sidelined in favor of regurgitating Holmes’ stump speech on the subversive nature of Theranos. The issues surrounding the company, namely a lack of peer review on the science the company was built on and the obsessively opaque nature of the company’s internal workings, were largely ignored by the press.

During this time, Walgreens partnered with Theranos without any of the usual due diligence regarding the Edison machines. After being effectively deflected from several inspections, the company bought into the media hype and supposedly disruptive nature of the technology and signed the deal. Transparency was deemed secondary to worries Theranos would back out. They opened more than 40 Theranos clinics where individuals could have their blood tested.

In late 2015 however, two time Pulitzer Prize winning John Carreyrou broke a mega-hit 2,700 word expose on the company. The high levels of secrecy surrounding the Edison machines, combined with individual consumer accounts of wildly fluctuating blood tests, cast considerable doubt on the marketing claims from the company.

A string of federal regulation agencies followed up on the claims, including not only the Food and Drug Administration, but also the Centers for Medicare / Medicaid Services, Securities Exchange Commission, and the Department of Justice. The company has since voided tens of thousands of blood test results from Edison machine, may lose its federal license, and Holmes herself might face a two year ban from running or owning a lab.

The bold claims of Theranos’ Edison machine providing quick and inexpensive finger prick blood tests have been walked back by the company after reports surfaced that the majority of all blood tests performed by the company were done by third parties on conventional machines.

In addition, the relationship between Walgreens and Theranos has soured considerably since the internal issues within Theranos went public. Expansion of the clinics has halted, and Walgreens executives have gone on record taking a harder line with the medical tech company. One lawsuit named Walgreens Boots Alliance, the parent company behind the drugstores, as a defendant alongside Theranos.

Theranos may prove to be a case study in press accountability and a glimpse into what happens when the tech sphere treats medical innovation the same way it treats “revolutionary” software and apps. The company allegedly endangered lives by releasing incorrect blood tests and utilizing technology that wasn’t ready for broad spectrum use, and is being summarily sued for it.

Contact Anderson and Wanca at (847) 368 1500 if you believe you may have received inaccurate results from a Theranos blood test.