Homeopathic companies provide a product that does not exist, or that is difficult to value or that cannot satisfy customers. I do not mean companies or individuals who sell homeopathic products. I’m talking about companies that sell smoke, that what they do could be done by anyone, and that make you believe that their advice or their product is essential.
I have encountered throughout my life with several homeopathic companies. I’ve always thought, do these companies really survive? Basically they give a service that is advice, consulting or a product, which they put an exorbitant price. The funny thing is that there are other companies that pay for that service, there are even people who invest money in it without knowing very well what it does.
The Theranos case
A paradigmatic case of homeopathic enterprise was Theranos. It offered a revolutionary laboratory method for treating samples of biological fluids. Their motto was One tiny drop changes everything,a simple drop changeseverything. The idea of the company was very novel. They proclaimed that they were developing technology that made it possible for many people to have laboratory results in a short time.
More than 200 different types of analysis
Theranos offered more than 240 tests that allowed measuring everything from cholesterol to various types of cancer. Its technology allowed to obtain results from a finger prick. It sounded good, very good. Investors invested more than $400 million in Theranos, valuing the company at more than $9 billion.
Part of the company’s success came from its founder, Elizabeth Holmes, who in many talks talked about the revolutionary advances of the startup that made it possible to quickly process the entire range of laboratory tests from a few drops of blood. Soon there were comparisons of Holmes, a young and ambitious woman, with Apple Inc. co-founder Steve Jobs.
The Miracle Robot
At the end of 2014, the laboratory instrument developed as the axis of its strategy that allowed laboratory tests to be carried out began to be sold to consumers. However, as often happens in many fairy tales of homeopathic companies, an investigation carried out by The Walt Street Journal uncovered that not everything was so wonderful.
A former high-ranking employee commented that Theranos routinely used the device, named Edison in honor of the prolific inventor, for only 15 tests in December 2014, not 240. Some employees were wary of the machine’s accuracy, according to former employees and emails reviewed by The Wall Street Journal.
A Theranos employee accused the company of failing to report test results that raised questions about the accuracy of the Edison system. Such a failure was a violation of federal rules for laboratories.
Theranos has also not publicly disclosed that it conducts most of its tests with traditional machines purchased from companies such as Siemens AG. It was not a revolutionary product; it was a product based on existing ones.
Information that is suspiciously changed on the website
Once the investigation by The Wall Street Journal began, some of the information on the Theranos´s website was deleted or changed. Asked by the company why it had done so, they commented that it was due to marketing issues.
For example, Theranos deleted a sentence on its website that said, “Many of our tests require only a few drops of blood.” It also removed a reference to collecting “usually only three tiny microvials” per sample, “rather than the usual six or larger.”
Accusation of fraud
Elizabeth Holmes and Ramesh “Sunny” Balwani (former president of Theranos) ended up in court charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud. According to the indictment, the charges stem from allegations that Holmes and Balwani participated in a multimillion-dollar scheme to defraud investors and a separate scheme to defraud doctors and patients.
Both schemes involved efforts to promote Theranos, a company founded by Holmes and based in Palo Alto, California. Theranos was a privately held healthcare and life sciences company with a stated mission to revolutionize medical laboratory testing through supposedly innovative methods for drawing blood, analyzing blood, and interpreting resulting patient data.
Holmes and Balwani used advertisements and solicitations to encourage and induce doctors and patients to use Theranos’ blood testing laboratory services, although, according to the government, the defendants knew that Theranos was not able to consistently produce accurate and reliable results for certain blood tests. In addition, it is alleged that tests conducted with Theranos technology are likely to contain inaccurate and unreliable results.
Court decides that this is a fraud
After being seen for sentencing in the end, the case against Holmes and Balwari of fraud was finally decided on January 3. A US jury found entrepreneur Elizabeth Holmes and Balwari guilty of four out of eleven counts, accused of a millionaire fraud after claiming that their company Theranos had developed a revolutionary blood testing system that was shown not to be such. The whole process can be followed via web or ftp as can be seen in Fig. 1.
Homeopathic companies like Theranos provide misleading results, which are not based on real data. There is a regulation in each country so that things like this do not happen. Fortunately, the system works, and through a newspaper article this millionaire fraud was uncovered that in no way favors science.