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The Hippocratic Oath
Alan Beam, Theranos’s laboratory director, was late to the party.
A white tent had been set up on basketball courts next to the old Facebook building, which the company was in the process of vacating. Music was blaring from big outdoor speakers and lights projected images of giant pink spiders onto the makeshift dance floor. The grass field behind the tent was decorated with pumpkins and bales of hay. As he breathed in the cooling evening air of Palo Alto’s Indian summer, Alan scanned the costumed crowd and caught sight of Elizabeth. She was wearing a long velvet dress with gold trim and a big upright collar, and her blond hair was done up in an elaborate bun. The irony of her Queen Elizabeth attire wasn’t lost on him. With a net worth that Forbes had just estimated at $4.5 billion in its October 20, 2014, issue, she had become Silicon Valley royalty.
Elizabeth loved to throw company parties. And none more so than the one she organized every year for Halloween. It was a Theranos tradition for which no expense was spared. The company’s senior executives all played along. Sunny was dressed as an Arab sheik. Daniel Young was Walter White, the high school chemistry teacher turned drug dealer from the show Breaking Bad. Christian Holmes and the Frat Pack were characters from Quentin Tarantino’s Kill Bill movies.
Ordinarily stiff and aloof at the office, Elizabeth liked to let loose on these occasions. At last year’s party, she’d jumped up and down in a bouncy house like an excited child. This year, the bouncy house was replaced by an inflatable boxing ring. While employees wearing sumo suits and oversized boxing gloves wobbled around in it, Elizabeth was delighting in the costume of an engineer disguised as a giant neutrophil.
Alan was supposed to be a zombie and he felt like one. In retrospect, leaving his tranquil post in Pittsburgh to come work at Theranos had been like crossing into his own strange version of the Twilight Zone. For his first few months as laboratory director, he’d clung to the belief that the company was going to transform lab testing with its technology. But the past year’s events had shattered any illusion of that. He now felt like a pawn in a dangerous game being played with patients, investors, and regulators. At one point, he’d had to talk Sunny and Elizabeth out of running HIV tests on diluted finger-stick samples. Unreliable potassium and cholesterol results were bad enough. False HIV results would have been disastrous.
His codirector, Mark Pandori, had quit after just five months on the job. The trigger had been a request he’d made that Elizabeth check in with them before making representations to the press about Theranos’s testing capabilities. Sunny had summarily rejected it, prompting Mark to hand in his resignation that very day. Another member of the lab had been so troubled by some of the company’s practices that she told Alan she couldn’t sleep at night. She too had resigned.
Alan was reaching his own breaking point. A few weeks earlier, he’d started forwarding dozens of work emails to his personal Gmail account. He knew forwarding the emails was a risky move because the company monitored everything, but he wanted to keep a record of the concerns he’d repeatedly raised with Sunny and Elizabeth. He’d gone a step further two days earlier and called a law firm in Washington, D.C., that specialized in representing corporate whistleblowers, but the person who answered the phone was a “client services specialist.” He opted to keep the reason for his call vague, wanting to speak only to an attorney. He did send them one of his email exchanges with Sunny, but he worried it was hard to understand without additional context and a good understanding of how clinical laboratories operate.
It was also hard to prove everything. The company kept things so compartmentalized. Why wasn’t he being shown quality-control data anymore? How could a lab director, the person who was supposed to vouch for the accuracy of the test results delivered to doctors and patients, be denied that information? His other big concern was proficiency testing. After reading up on the CLIA regulations, he’d become convinced that Theranos was gaming the exercise.
Daniel Young had sidled up next to him, interrupting his somber thoughts. As was his habit at these work parties, Daniel was drunk. The alcohol made him uncharacteristically friendly and approachable, but Alan knew better than to share his misgivings. Daniel was part of the inner circle. They made small talk, bantering about Daniel’s upper-crust upbringing in Connecticut. As they chatted, the festivities seemed to be winding down. Some colleagues were headed to Antonio’s Nut House, a dive bar a few blocks down the street, to have a few more beers. Alan and Daniel tagged along.
When they got to the bar, Alan spotted Curtis Schneider, a scientist on the R&D side of the company, and grabbed a stool beside him. Curtis was one of the smartest people Alan knew at Theranos. He had a Ph.D. in inorganic chemistry and had spent four years as a postdoctoral scholar at Caltech. They talked about fly fishing for a while. It was one of Curtis’s favorite hobbies. Then Curtis told Alan about a conference call earlier that day with officials from the FDA. Theranos was trying to get the agency to approve some of its proprietary blood tests. During the call, one of the agency’s reviewers voiced a dissenting view about the company’s submission but was silenced by his colleagues. Curtis found it odd. There might be nothing to it, Alan thought, but the story added to his mounting unease. He told Curtis about the lab’s quality-control data and how it was being kept from him. And he confided something else: the company was cheating on proficiency testing. In case Curtis hadn’t registered the implication of what he’d just said, he spelled it out: Theranos was breaking the law.
When he looked up, Alan saw that Young was staring at them from across the bar. His face was white as a ghost’s.
THREE WEEKS LATER, Alan was sitting in his new office in Newark when he got a call from Christian Holmes. Most of the company had moved to the new building on Page Mill Road in Palo Alto, but not the clinical laboratory. The lab had moved across San Francisco Bay to Theranos’s sprawling Newark facility, where it planned to one day manufacture thousands of miniLabs.
Christian wanted Alan to handle yet another doctor’s complaint. Alan had fielded dozens of them since the company had gone live with its tests the previous fall. Time and time again, he’d been asked to convince physicians that blood-test results he had no confidence in were sound and accurate. He decided he couldn’t do it anymore. His conscience wouldn’t allow him to.
He told Christian no and emailed Sunny and Elizabeth to inform them that he was resigning and to ask them to immediately take his name off the lab’s CLIA license. Elizabeth replied that she was deeply disappointed. He agreed to delay his official departure by another month to give Theranos time to find a new lab director. For the first two weeks of his notice period, Alan went on vacation. He rode his motorcycle to Los Angeles to see his brother for a few days and then flew to New York to spend Thanksgiving with his parents. When he returned in mid-December, he headed to the new Palo Alto headquarters to discuss a transition plan with Sunny.
Sunny came down with Mona to meet him in the lobby of the new building. They ushered him into a room off the reception area and informed him he was being terminated early. Sunny slid what looked like a legal document across the table toward him.
Alan read the bold heading at the top: “AFFIDAVIT OF ALAN BEAM.”
It stated, under penalty of perjury under the laws of California, that he promised to never disclose any proprietary or confidential information learned during his employment at the company. And it included this line: “I do not have any electronic or hard copy information relating to Theranos in my possession in any location including personal email accounts, any personal laptops or desktops, trash/deleted folders, USB drives, home, car, or any other location.”
Before Alan had time to finish reading, he heard Sunny say in an icy tone, “We know you sent yourself a bunch of work emails. You have to let Mona access your Gmail account so that she can go through them and delete them.”
Alan refused. He told Sunny the company had no right to invade his privacy and he wouldn’t sign any more documents.
Sunny’s face reddened. His volcanic temper was building. Shaking his head in disgust, he turned to Mona and said, “Can you believe this guy?”
He turned back to Alan. Contempt oozing from his voice, he offered to hire him an attorney to expedite matters.
The notion that a lawyer in the pay of Theranos would adequately defend his interests in a dispute with the company struck Alan as absurd. He declined the offer and announced that he wanted to leave. Mona gave him his backpack, which he’d insisted she retrieve from the lab. In return, she asked for his company phone and laptop. He handed them over after quickly resetting the phone to factory settings to wipe it of its contents. Then he walked out.
Over the next few days, the messages piled up in his voicemail box. Some were from Sunny, others from Mona. They all said the same thing, in increasingly threatening tones: he needed to come back to the office, let Mona delete the emails from his personal email account, and sign the affidavit. Or else the company would sue him.
Alan realized that they weren’t going to stop. He needed a lawyer. Contacts with that Washington firm had gone nowhere. He needed someone local he could consult in person. He called the first listing that came up in a Google search: a medical malpractice and personal injury attorney in San Francisco. She agreed to represent him after he paid her a ten-thousand-dollar retainer.
As his new lawyer saw it, Alan didn’t have much of a choice. Theranos could make a case that his actions did breach his confidential obligations. And even if it failed to do so, it could tie him up in court for months, if not years. This was one of the most valuable private companies in Silicon Valley, one of the fabled unicorns. Its financial resources were virtually limitless. The litigation could bankrupt him. Did he really want to take that risk?
His lawyer was getting pressure from a Boies Schiller partner who was representing Theranos and she was clearly intimidated. She urged Alan to delete the emails and to sign the affidavit. She told him she would send Theranos a preservation order instructing it to keep the originals. There was no assurance the company would honor it, but that was the best they could do, she said.
That evening, Alan glumly sat down at his computer in his apartment in Santa Clara and logged into his Gmail account. One by one, he erased the emails. By the time he was done, he’d counted 175 of them.
IT HAD BEEN nine months since Richard Fuisz had settled with Theranos and agreed to withdraw his patent, but he was still consumed with the case. For the first few weeks after the settlement, he’d been nearly catatonic. His wife, Lorraine, had had to call his son Joe to find out what had happened because he refused to talk about it.
During the litigation, Fuisz had found a friendly ear in Phyllis Gardner, a longtime friend who was a professor at Stanford’s medical school. Phyllis and her husband, Andrew Perlman, had briefly been involved with Theranos during its infancy because Elizabeth had consulted Phyllis about her original patch idea when she dropped out of Stanford. After telling her she didn’t think her concept was remotely feasible, Phyllis had referred Elizabeth to Andrew, a veteran biotech industry executive. Andrew had agreed to serve on a short-lived Theranos advisory board that Elizabeth had dissolved after just a few months.
The decade-old episode had left Phyllis skeptical that Elizabeth, who had no medical or scientific training to speak of and a clear tendency not to listen to people who were older and more experienced, had really gone on to develop groundbreaking blood-testing technology. Her suspicions had deepened when Andrew had chatted with a Siemens sales representative during a flight and learned that Theranos was a major purchaser of Siemens diagnostic equipment.
Fuisz too had become doubtful that Theranos could really do what it claimed. During a visit to Palo Alto for pretrial motions in the fall of 2013, he’d called the local Walgreens and asked if he could have a creatinine finger-stick test done there. His doctors had recently diagnosed him with aldosteronism, a hormonal disorder that causes high blood pressure, and wanted him to monitor his creatinine levels for any sign of kidney damage. Creatinine is a common blood test, but the woman who answered the phone told him the wellness center didn’t offer it without a special approval from Theranos’s CEO. When he added that to the company’s intense secrecy and to the fact that it had actively discouraged Ian Gibbons from testifying before he died, he smelled a rat.
Fuisz had introduced Phyllis to Ian’s widow, Rochelle, and the two women had bonded over their distrust of Elizabeth. Together, the three of them formed a little band of Theranos skeptics. The problem was that no one else seemed to share their doubts.
That would change when, in its December 15, 2014, issue, The New Yorker published a profile of Elizabeth. In many ways, it was just a longer version of the Fortune story that had rocketed her to fame six months earlier. The difference this time was that someone knowledgeable about blood testing read it and was immediately dubious.
That someone was Adam Clapper, a practicing pathologist in Columbia, Missouri, who in his spare time wrote a blog about the industry called Pathology Blawg. To Clapper, it all sounded too good to be true, especially Theranos’s supposed ability to run dozens of tests on just a drop of blood pricked from a finger.
The New Yorker article did strike some skeptical notes. It included quotes from a senior scientist at Quest who said he didn’t think finger-stick blood tests could be reliable, and it noted Theranos’s lack of published, peer-reviewed data. Among the arguments she marshaled to rebut the latter point, Elizabeth cited a paper she had coauthored in a medical journal called Hematology Reports. Clapper had never heard of Hematology Reports before, so he looked into it. He learned that it was an online-only publication based in Italy that charged scientists who wanted to publish in it a five-hundred-dollar fee. He then looked up the paper Holmes had coauthored and was shocked to see that it included data for just one blood test from a grand total of six patients.
In a post on his blog about the New Yorker story, Clapper pointed out the medical journal’s obscurity and the flimsiness of the study and declared himself a skeptic “until I see evidence Theranos can deliver what it says it can deliver in terms of diagnostic accuracy.” Pathology Blawg didn’t exactly have a big readership, but Joe Fuisz came across the post in a Google search and brought it to his father’s attention. Richard Fuisz immediately got in touch with Clapper and told him he was onto something. He put him in contact with Phyllis and Rochelle and urged him to listen to what they had to say. Clapper was intrigued by what the three of them told him, especially by the story of Ian Gibbons’s death. But it all sounded too circumstantial to go beyond what he’d already written. What he needed was some sort of proof, he told Fuisz.
Fuisz was frustrated. What would it take for people to listen to him and finally see through Elizabeth Holmes?
While checking his emails a few days later, Fuisz saw a notification from LinkedIn alerting him that someone new had looked up his profile on the site. The viewer’s name—Alan Beam—didn’t ring a bell but his job title got Fuisz’s attention: laboratory director at Theranos. Fuisz sent Beam a message through the site’s InMail feature asking if they could talk on the phone. He thought the odds of getting a response were very low, but it was worth a try. He was in Malibu taking photos with his old Leica camera the next day when a short reply from Beam appeared in his iPhone in-box. He was willing to talk and he included his cell-phone number. Fuisz drove his black Mercedes E-Class sedan back to Beverly Hills and, when he was just a few blocks from home, dialed the number.
The voice he heard on the other end of the line sounded terrified. “Dr. Fuisz, the reason I’m willing to talk to you is you’re a physician,” Beam said. “You and I took the Hippocratic Oath, which is to first do no harm. Theranos is putting people in harm’s way.” Alan proceeded to tell Fuisz about a litany of problems in the Theranos lab. Fuisz pulled into his driveway and quickly got out of his car. As soon as he was inside his house, he grabbed a notepad he’d brought back from a stay at a hotel in Paris called Le Meurice and started taking notes. Alan was speaking so fast that he was having trouble keeping up with what he was saying. He jotted down:
LIED TO CLIA people & cheated
ROLL OUT DISASTER
Finger stick not accurate—using venipuncture
Transporting Arizona to Palo Alto
Using Siemens equip.
False thyroid results
K results all over map
False pregnancy errors
Told Eliz not ready but insisted proceed
Fuisz asked Alan to talk to Joe and to Phyllis. He wanted them to hear it for themselves from the horse’s mouth. Alan agreed to call them and more or less repeated to each of them what he had told Fuisz. But that was all he was willing to do. He wouldn’t talk to anyone else. Boies Schiller lawyers had been hounding him, he said, and he couldn’t afford to be sued like Fuisz had been. Although he sympathized with Alan’s predicament, Fuisz couldn’t just leave it at that. He got back in touch with Clapper and told him about the new connection he had made and what he’d learned. This was the proof he’d been asking for, he told him.
Clapper agreed that this changed everything. The story now had legs. But he decided he couldn’t take it on himself. For one thing, he couldn’t shoulder the legal liability of going up against a $9 billion Silicon Valley company with a litigious track record that was represented by David Boies. For another, he was just an amateur blogger. He didn’t have the journalistic know-how to tackle something like this. Not to mention the fact that he had a full-time medical practice to tend to. This, he thought, was a job for an investigative reporter. In the three years since he’d launched Pathology Blawg, Clapper had spoken to several about lab-industry abuses. There was one in particular who came to mind. He worked for the Wall Street Journal.
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