FDA-Regulated Industry May Have Found the Best Example in Theranos to Educate Public [Posted on: Thursday, June 16, 2016]

The news of questionable science and data integrity issues at Theranos has filled prime time news for several months. Critics have variously chastised the company for all aspects of its operations. However, the blame for this does not rest only on Theranos; the industry as a whole made major mistakes in not checking one of its own. But there may be a silver lining; Theranos episode brings to fore many aspects of the pharma industry that are not so obvious to the general public. Theranos broke many basic rules of scientific innovation, and not in a good way. There are five aspects of drug development that got learnt the hard way at Theranos. First, scientific innovation needs verification via independent review. Practically all aspects of medical technology, diagnostic, therapeutic or preventive, starts by peer-reviewed publications, careful development strategy followed by systematic testing, and detailed reviews by regulators, before it is available to public. Theranos did not publish any of its research, and never pursued regulatory review. In less than 5 years, Theranos, went from small testing lab in 2009 to offering millions of tests nationwide through Walgreens by 2014 without any formal reviews or approvals by independent researchers or regulators. A feat like that will be impossible for any medical technology. Second, Theranos was practically the only company working on a breakthrough disruptive technology that claimed to revolutionize all blood testing. No one in the World was working on a similar technology. Even after, Theranos started making news in 2009-2010, no research lab in the World succeeded in or at least tried to replicate or duplicate Theranos technology. For any innovative medical technology, there is always stiff competition between multiple research labs trying to race with each other. A technology with no competition should have raised red-flags. Third, the entire Board of Directors and investors in Theranos were Who’s Who of the Silicon Valley but none from the diagnostic industry. The Board was practically collected to impress and intimidate but never question the science. Drug companies rely heavily on their Boards filled with professionals with relevant qualifications and significant experience to ask tough technical questions and challenge all data. Without that resource, Theranos was practically short-changed. Fourth, there are no short-cuts to innovation. Theranos decided to take a highly questionable regulatory pathway of Lab Developed Tests (LDTs) to market. Even if its technology was credible, it involved new instrumentation, new analytical models and was intended to compete with conventional blood diagnostics. FDA would have questioned any such mass marketed technology. In 2010, FDA had similarly challenged providers of genetic diagnostics, so it should have been obvious that Theranos’ technology will come under similar scrutiny. Regulatory review is a time-consuming and critical part of any new technology’s development. The company never attempted to get FDA’s opinion. It is not known if it even considered credible independent regulatory advice. It is ironic that Walgreens was at the negative end of genetic diagnostics as well. Guess Walgreens has a very aggressive business model which is taken advantage by dubious companies. Fifth, Theranos ignored the basic tenets of data integrity. Medical technology companies live and die by their data. SOPs, systematic training, complete documentation, analysis of all data, and careful cataloging of all data is critical for any innovative company. And data is never discarded. Invention of new technology requires patience as it takes time while we optimize methods, learn from errors, and validate hypothesis. None of these seemed to have been followed at Theranos. Monday-night quarterbacking is easy. Theranos started with a disruptive idea but it did not follow-through. It believed in publicity over publication, hype over hard work, and high valuation over high integrity. Now we know that while it’s CEO, Elizabeth Holmes, was being profiled at top magazines and invited to TED Talks, it was dumping valuable data and dealing with negative CMS and FDA audits. The debacle started with an exposé by the Wall Street Journal, which quickly expanded into widely-accepted belief that Theranos should never have been in the lime-light anyway. It should be shocking that just a few months ago Theranos was one of the most admired companies in medical diagnostics. Media hyped it and a diligent journalist crashed the party. Forbes changed its opinion in less than a year. All may not be lost for Theranos. It has the technology, but it needs to develop it, earn credibility, and win the trust, not of media but its peers and regulators. The media created an aura of a Hollywood-worthy story; a company led by a Stanford drop-out which a smart idea that no one else could think of and who became of the richest young woman in the World. Public bought it. Now that we have a negative media, the rest of the industry should take this opportunity to educate the same public using this example, about how hard it is to innovate, and how expensive are failures. Theranos lost practically all its $4.5 billion valuation in less than 6 months. It should be a lesson not forgotten but taught to all.