Elizabeth Holmes exposed: the $9 billion medical ‘miracle’ that never existed | 60 Minutes Australia

elizabeth holmes promised the world a medical revolution at 19 she claimed to have invented a miniaturized machine that with a single drop of blood could map our health her boast was serious diseases like cancer would be prevented before they happened and it was not only a wow moment for patients high-profile investors poured a fortune into elizabeth holmes company theranos their money guaranteed she became silicon valley's first self-made female billionaire but her invention was an invention it didn't work elizabeth holmes is no visionary she's a fraudster who's risked people's lives and if convicted faces 20 years it's finding what you're born to do when you really give everything to that then you can realize great things holmes was making the greatest promise of all that she could save lives through a revolutionary blood testing device she had created and which she would make available to all through supermarkets and pharmacies theranose means being able to see the onset of disease in time to be able to do something about it i'd like to welcome elizabeth holmes the real treat the incredible elizabeth holmes [Music] california's silicon valley and some of the richest people in the world bought the dream there are people in this world who revolutionize our lives coco chanel steve jobs bill gates walt disney and elizabeth holmes mark my words turning theranos into a staggering 9 billion juggernaut and making homes the tech valley's first self-made female billionaire you founded this company 12 years ago right tell them how old you were i was 19. celebrity commentators and cashed up investors couldn't get enough of this new kid on the block in silicon valley she was the new darling and a lot of that was because she was a woman entrepreneur which is a very popular thing it's been a man's world you know for so long she would wear black turtlenecks like steve jobs and sold her little tail and everybody bought it for a while the revolution promised by elizabeth holmes was to put preventative health care at our fingertips quite literally all it would take would be one tiny drop of blood from a finger prick from which to run hundreds of blood tests using a groundbreaking miniaturized testing device which would deliver more reliable faster and cheaper results people don't like big needles being stuck into their arm yeah part of it you're one of those people right deeply so elizabeth's machine would wipe out the traditional way of doing things larger volumes of blood drawn from the arm by big needles and costly and time-consuming lab analysis the mission was to enable everyone to get blood tests as frequently as once a month to build a personal health profile and to catch diseases like cancer at their earliest people don't even know that they have a basic human right to be able to get access to information about themselves and their own bodies that can change their lives but as whistleblowers would expose the elizabeth holmes revolution turned out to be an extraordinary fraud a lie that put lives in jeopardy were you ever asked to falsify data or destroy data oh just just get rid of these tests that you've run wiped out nearly a billion dollars of investors money there was no money to be had it all just evaporated any comment at all to the investors and may well end with homes behind bars for up to 20 years come her fraud trial later this month as far as please raise your right hand do you swear to tell the truth the whole truth and nothing but the truth i do how would you describe the rise and rise and then the fall of elizabeth holmes well i think it is a commentary on silicon valley's culture there's so much hyping so much exaggerating in this culture that you know young entrepreneurs are basically bred to to behave this way and as investigative journalist john carraroo found there were plenty of people in the room willing to drink the kool-aid all hoping to crack the unicorn club the billion dollar startups emerging in silicon valley at the time this was the unicorn boom and this was 2015 and things were getting really frothy in silicon valley and uh people didn't want to miss the next facebook and a lot of people wanted it to get on board this next rocket to uh to riches when she first interviewed me i have to say i was a bit starstruck science graduate erica chung was not out to get rich she just wanted a job and theranos with ernest elizabeth holmes at the helm was the dream pick i was really enthusiastic as sort of a young scientist to to work for a company that seemed to have a compelling vision and a strong leader who seemed to back it as well [Music] but erica was shocked to find the theranos dream was in fact a fairy tale peddled by holmes and chief operating officer ramesh sunny balwani elizabeth's boyfriend at the time for all the excitement the little black box simply did not work it could not do what the pair claimed the reality of working at theranos was that a lot of the things that were being said about the company were not actually what was going on behind closed doors this new revolutionary device it wasn't actually in existence it hadn't quite been built yet worse they were using a jerry-rigged version of the machine to run patients blood tests the results were often false or misleading but this too was hidden from an unsuspecting public despite the significant health risks i just wanted people to know that they were leveraging this faulty device to test on patients and that needed to be stopped rumors of theranos bad practice were circulating but it was journalist john kariu from the wall street journal who would be the first to start investigating after a tip-off from a skeptical pathologist things you know began to come into focus for me and and i realized that you know this was not just a a business fraud and a corporate fraud but potentially a fraud that had big implications for the public health and so i thought well this is a big story for all the hope and hype elizabeth holmes was now accused of being a fake but as it would become clear the consequences of her fraud were real and dangerous this is inexcusable now and forever the remarkable story of healthcare startup company theranos and its founder elizabeth holmes starts at stanford university in 2003. this used to be my advisor's office we got in [Music] at just 19 and after just two semesters studying chemical engineering holmes dropped out of university to become a medical technology entrepreneur another few classes in chemical engineering was not necessary for what i wanted to do one of the first to hear her future business plans was stanford university professor of medicine dr phyllis gardner unlike most who encountered homes dr gardner was not impressed did elizabeth holmes always have big dreams in your opinion absolutely her ambition was over the top and unfortunately the person who twice introduced her to me said she's just brilliant and she's brilliant and when you're surrounded by nobel laureates you take that with a grain of salt a boulder of salt she had no knowledge of medicine and a rudimentary knowledge of engineering and she was 19. and she really didn't want any expertise she thought she knew at all well you don't at 19 i'm sorry but right from the start elizabeth holmes knew the power of pr i believe the individual is the answer to the challenges of health care she didn't bother proving her so-called groundbreaking blood testing device could do all she promised through peer reviews or releasing extensive data let's take these tests and make them accessible instead she gathered a war council to her board reveling in their fame and credibility so it includes three former u.s cabinet secretaries two former u.s senators a retired navy admiral and a retired marine corps general including george schultz henry kissinger how did you make that happen the board was george schultz jim mattis henry kissinger and a bunch of four star generals and someone said this is like a board that's going to take over the world and uh but what does it have to do with medical advancements nothing and so everyone was duped silicon valley really had egg on its face over this thing but initially like so many small time investor eileen lepro was impressed after she was advised to sink a hard-earned 100 000 into was there something about the nature of what elizabeth holmes was hoping to do promising to do that attracted you to this type of investment was there anything altruistic about it not for me i was looking to make money but i worked for a venture capitalist at the time and um he said it would be equivalent to apple and to get as many shares as i could no matter there was no evidence the money flowing into theranos was huge almost a billion dollars at one time rupert murdoch was the single biggest investor buying 125 million dollars worth of shares coincidentally as the proprietor of the wall street journal he was also investigative journalist john kararu's boss at the time kararu exposed holmes's spin as captioning not available and mostly he's been right uh as for the other investors certainly you know they should have done more due diligence i think it was a deliberate choice of elizabeth's to focus on uh what i would call uncharitably the dumb money the uh billionaires and their family offices as opposed to the uh sophisticated silicon valley venture funds who i don't think they would have fallen for the same lies what do you think of the investors who lined up to to give her nearly a billion dollars worth of money older white men right i'm telling you i've said it brains go on south they weren't thinking with their brains it's what you're saying uh-huh [Laughter] i don't know and they believed her and she could be charming she could be i'm sure it just didn't charm me but she could be charming to older men giving people the right to obtain a laboratory test will by definition begin the process of enabling them to engage in their health it's homes you are magnificent with elizabeth's charm offensive in full flight results back in the lab were going from bad to worse according to former lab associate erica chung they were producing really wildly inaccurate and imprecise results on a consistent basis across many different types of blood tests you know tests like hepatitis c or your thyroid test or test that would be predictive of cancer it's telling us very clearly we need to stop testing patients every person should have the ability to get that type of test but elizabeth was not listening desperate for her technology to catch up with her vision your health is really important to us as a kid of all those taken in by the theranosmania it would be patients who had the most to lose because nothing is more important than the health of those you love it was just a big fraud and if you can perpetrate a fraud smile about it go to white house dinners that to me is just no conscience this notion that she was faking it until she could make it do you think that she ever believed herself in what she could do possibly probably i mean it's almost like in another fantasy world an egoism that i can't describe i don't have that i i doubt you have that fake it till you make it excuse me on patience i don't think so what is your view of that that they're happy to to go live with a system that's still being tested and is actually failing yeah it's unconscionable it's unethical it's immoral as you know all the words you can think about to describe that and in australia why the elizabeth holmes miniature black box was never going to work she could never do what she claimed she could do founder and ceo of startup company theranos elizabeth holmes was promising to make possible the impossible in the name of preventative medicine the issue comes that she tried to essentially take an entire pathology lab and squish it into a little black box and promised to be able to do all those tests all the time for people and it takes years and years to develop a single one of those tests up to the standard where it can be accurate so it was ambitious doesn't quite capture it but it was incredibly ambitious medical scientist dr darren saunders from sydney university has keenly followed the rise of elizabeth holmes and her promise that this mini lab could run hundreds of blood tests of just one drop of blood his expertise in the field made him incredulous right from the start over the last 11 years we've reinvented the traditional laboratory infrastructure it's quite a weird thing to watch happen because you feel like shouting the emperor's not wearing any clothes right and as a scientist it was i think frustrating is the word i'd use incredibly frustrating because you felt like taking these people aside and going look there's nothing going on here why are you spending so much money on something that there's there's no proof that it exists that was the phrase i always used it was exactly that the emperor has no clothes and that is the perfect metaphor for what it was like across the world dr phyllis gardner was equally disturbed as a professor at stanford university she knew elizabeth holmes as a student there up until that point the way that they had had to draw before she famously dropped out and acquired the steve jobs attire i'm so dehumanizing that um it's an incredibly emotional process so and before her voice changed well it's wonderful to be here i started this company because what about the deep voice did you have the deep voice when you were dealing with no i was shocked when i heard a voice because i didn't matter before i certainly that is a voice you don't forget in a woman oh [Music] hello yes the rate to protect the health and well-being carefully crafted or otherwise corporations were lining up to embrace elizabeth holmes her success was sealed when in 2013 in a multi-million dollar deal theranos was launched in pharmacy chain walgreens we have an operational plan that will allow us to become within five miles of every person's home through the walgreens that we've opened and are continuing to open nationally it was all about access and ease customers could get an in-store blood test off a simple finger prick which would cost next to nothing they'd even get their results back within four hours that was the promise the truth was another matter according to former theranos lab associate erica chong you know this thing that was supposed to be five would all even all of a sudden show up to be 60 and then you would run it and it would show up to be you know four and it was just the degree of inner accuracy was just way too high to be acceptable to start running on on patients so i got my thera nose test done on like 29th of july and then 31st of july i got a test done by another lab and it was different unaware of the wildly unreliable results pallav schader himself a physician-turned-medical technology entrepreneur went to walgreens for a theranos blood test the results were surprisingly bad for this health-conscious medico they showed he was pre-diabetic luckily pallav's own doctor was suspicious of the diagnosis and ordered another blood test from another lab that was the moment when i felt cheated because i there was a little bit of a pride hurt because i'm from the industry if you had not got a second opinion a second test what course of action would you have taken at age 35 i would have been started on anti-diabetic medication and no medication is it comes without side effects so i i i get emotional thinking about how big a deal it was for me if you followed the theronos model you would have been on medication for a disease you don't have yes absolutely this is inexcusable now and forever was it a fact that there were illnesses that might not have been picked up that the people who might have been suffering from life-threatening diseases and they just didn't know it because they got a false result yeah the devices were so unreliable that you really couldn't trust it with any test the groundbreaking theranos technology was a charade instead theranos was secretly using traditional commercially available blood analyzers because those machines require larger amounts of blood to run their tests staff were ordered to dilute the small blood samples collected by finger prick rendering those results unsafe they were doing the tests on standard equipment and they were diluting the blood which invalidates a lot of the results so i knew there was fraud going on and i from very early on but still the marketing myth continued and you make a decision to do something you do it and that's it a previously non-existent lab was created filled with as many of the black boxes the company could find then vice president joe biden was invited to inspect this is sort of the laboratory of the future unaware the devices didn't work and that he along with the world was being conned to learn that she created a fake lab to show joe biden i mean what an audacious act of deception well she was audacious i would grant you that and everything she did i do think there's some this is my opinion that there's some sociopathy involved and the ability to lie and without caring is not normal from my perspective as a medical doctor she was trying uh to uh over promise and then hope that her engineers and her biochemists would catch up and that when they eventually did and that her machine worked no one would be the wiser the problem is she was nowhere near already elizabeth holmes was revered as the superwoman scientist come to rescue and revolutionize the u.s health system but the true heroes of the theronos tale are the courageous whistleblowers who helped investigative journalist john kararu from the wall street journal exposed the sham of their testimonies he went on to write the award-winning bad blood and is hosting a podcast called bad blood the final chapter these are people who wanted to do good these are people who couldn't sleep at night because they were worried that patients were relying on on false results right did that strike you as well they couldn't in good conscience continue uh to not say anything they felt the need to speak up and they felt that lives were in danger and that the longer this went on the worse it would get erica chung was one such hero when her concerns were ignored by theranos she left in disgust but still feared for its customers erica alerted regulators to what was going on behind closed doors you were being extraordinarily brave yes you clearly felt compelled to get someone else's even though it was scary and it was nerve-wracking and at that time theranose was at least threatening to sue me and they were following me to sort of intimidate me and to not speak up against them it's just that they needed to stop doing this thing right they needed to stop testing on patients and that the truth needed to be uncovered this is what happens when you work to change things and first they think you're crazy then they fight you and then all of a sudden you change the world elizabeth holmes came out fighting but regulators acted against her closing down theranos laboratories and banning medical testing after they found massive fraud that put patients in serious jeopardy the company once valued at nine billion dollars was now worth zero and that was good right like the mission was finally accomplished by that point i was able to finally sleep at night and and realize that you know my my work was done in further legal action elizabeth and ex-boyfriend sunny balwani are now in the midst of a delayed criminal trial for defrauding investors patients and doctors and could be jailed for up to 20 years if convicted holmes trial has been pushed back to the end of this month first by covert and then news she was expecting her first child a son who was born in july to get pregnant when you're undergoing a trial is the height of irresponsibility in my mind what about the baby well do you think this was a planned pregnancy or do you think it was an accident i definitely think it was i mean i was predicting it because it's the best way to garner sympathy to try to keep yourself out of prison i think she needs to go to prison for a while i think 25 years sounds good those closest to the theranos dream including investor eileen lipra still believe elizabeth holmes should face the harshest sanctions because beyond money so much was at stake everybody knows it was all a sham so why would you get a slap on the wrist you know if it was just money that's one thing but it's it's people's lives their medical situations that's not okay with anybody hello i'm tara brown thanks for watching 60 minutes australia subscribe to our channel now for brand new stories and exclusive clips every week and don't miss out on our extra minutes segments and full episodes of 60 minutes on nine now dot com dot a u and the nine now app

Channel: 60 Minutes Australia

Views: 4,467,998

Rating: 4.8040924 out of 5

Keywords: 60 Minutes, 60 Minutes Australia, Liz Hayes, Tara Brown, Liam Bartlett, Tom Steinfort, Sarah Abo, karl stefanovic, 60Mins, #60Mins, elizabeth holmes, rupert murdoch, silicon valley, medical, miracle, revolution, billions, scam, lie, fraud, fake, CEO, forbes, millions, bill clinton, joe biden, beauty, old men, victims, media, famous, celebrity, science, blood, tests, machine, unbelievable, history, Jennifer Lawrence, bad blood, movie

Id: BgNfrDXr7uA

Length: 27min 11sec (1631 seconds)

Published: Sun Aug 08 2021

Reddit Comments

[u/InGordWeTrust]

$1,000,000,000 in fraud, and just a proposed 20 year jail sentence. America the game show.

[u/RevEngineer_11]

It was surreal reading Bad Blood and remembering actually getting test results from Theranos. The fact that her major investors listened to her, a first-year college drop-out, instead of M.D.s and Ph.D.s that called her on the bullshit is hard to fathom. It really does seem to show that if you have connections and come from money you're going to be successful, and if you're poor you are pretty well fucked unless you just get really lucky.

I feel about her the same way I did that woman from "I Care A Lot".

[u/saadcee]

That voice is shockingly weird.

[u/DrEnter]

I'd much rather get a story about Ian Gibbons than hear her name mentioned in anything but an article about her conviction.

[u/[deleted]]

[removed]

[u/Rusty-Shackleford]

"Dumb money" including Rupert Murdoch and Jim Mattis? It seems her skill came in the form of appealing to the greed of others....

[u/Guido125]

She looks like Mark Zuckerberg's sister o.0

[u/AdditionalExcitement]

I remember anytime anyone brought up any criticism of her. People would say " but she is a strong women CEO, you don't like her because she is a woman! " I didn't like her because of the silly fake deep voice (watch some videos to see that) and the steve jobs clothes. It felt so fake and strange

[u/RapaxIII]

1. Tech startup
2. Decently attractive woman as figurehead
3. Nebulous explanation for how the technology works

3 ways to get big time investor interest