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Impact of the Theranos Lab Tests Scandal

Paper Type: Free Essay Subject: Sciences
Wordcount: 1018 words Published: 16th Mar 2021

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The Theranos lab tests scandal all starts with a woman named Elizabeth Holmes and her story's so compelling. She was going to herald a revolution in medical treatment in this country. It was a massive movement in Silicon Valley. Holmes created a billion-dollar company. Everyone was in awe with Holmes. She was an outlier, something special. Holmes was compared next to Steve Jobs. The idea Holmes had was a lab inside a box called Edison. The goal was to put these devices in every American home. Many would call this to be the Apple of healthcare. Holmes was lying about the accuracy of the Edison machines doing blood tests. It's all a show. She didn't want anybody to see what was going on within the company. Holmes has made herself appear to be in cahoots with very powerful people who she would charm. She was deceiving investors and taking their money, millions of dollars. It all comes back to "fake it until you make it." Something was going on behind the scenes. Holmes has made detrimental ethical choices within her career by lying about her equipment, having friends in high places, and deceiving the American people.   

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Lying about the Edison machines had a plethora of ethical implications. One of which was the results of the machines would output false or inconclusive information about the patient. This is wrong on many levels. People’s lives are at stake. A former employee said, “they kicked out the microbiology team, gave the room a fresh coat of paint and stocked it with every Edison they could find” (ABC). Just so that Holmes could give the impression that the machines were ready and set to go. When these machines were put on into the market, doctors raised a myriad of ethical concerns due to the limited transparency Theranos had given them. It is said that “markets work best when there is maximum transparency. The greater the amount of knowledge, the easier it is to assign risk. Increasing transparency makes markets more efficient. Thus participating in the financial markets support rules that increase transparency” (103). Meaning that if Theranos had disclosed that their machines could not do all the tests as advertised then they would have significantly less backlash, than openly lying about what the devices were capable of doing.

Having friends in high places had a plethora of ethical implications. One of which was how Holmes had leveraged the secretary of the state into appearing that she had military contracts. On another occasion, Holmes had wiggled her way into the Obama administration starting with her ties to Joe Biden. In a press conference, Biden had said: “The president and I share your vision of the new health care paradigm, focused on preventative care” (Dunn). This conference went viral, the media exploded. Even though nobody knew how this was possible, the fact that Holmes had powerful allies meant that nobody would doubt her convictions. By the same token, this directly conflicts with one of the Caux Round Table’s principles. Principle 7 states “A responsible business does not participate in, or condone, corrupt practices” (Hartman, 101). Avoiding illicit activities had been violated in a way that Holmes had leveraged her friendship with others.

When Theranos decided to deceive the American people regarding the company's statements about the work that they do in their laboratories had many ethical implications. One of which was lying about the company's net worth. Another deception was when most people went to do a checkup and thought that all they had to do was a finger prick, they were immediately upset that they had to do a venous draw and more tests that needed to be sent to labs. This action was reported in the Wall Street Journal by saying that the “company didn’t just burn investors who bought into its promise to revolutionize the world of blood testing. It also left a trail of agonized patients who had been drawn to Theranos by its claims of convenience, low cost, and reliability” (Weaver). Due to this misinformation, patients wanted to get a refund on the test administered to them. Theranos was in hot water due to this and had to refund its patients for the tests conducted. Thus does right by another Caux Round Table’s principle of respecting others beyond its stakeholders. Principle 1 states that “A responsible business acknowledges its duty to contribute value to society through the wealth and employment it creates and the products and services it provides to consumers” (Hartman, 100). Even though the tests were done Theranos had refunded its patients.   

All of the scandals Theranos had succumbed to had the company go under and be no more. However, things would have gone differently if Holmes had been using her ethical compass to guide her on her journey. If maybe they didn't lie about the Edison machines doing many tests as advertised, but instead of just saying a few tests can run and overtime researching more tests to be built into the machines. Another way this all could be avoided is not abusing the power of friendship to sneak your way past regulations and laws. Lastly, it all comes down to when ethical decision making goes wrong. We have to ask ourselves this question: “Why do “good” people engage in “bad” acts? (Hartman, 49). To answer this, Holmes had justified doing those things she did because that is what she truly thought was right at that time. The problem was that the road that she went down was a dead end.


  • Dunn, Taylor. ABC News Network, abcnews.go.com/Business/elizabeth-holmes-theranos-devices-working-made-mistakes-dropout/story?id=60863557
  • Hartman, Laura Pincus, et al. Business Ethics: Decision Making for Personal Integrity and Social Responsibility. McGraw-Hill Education, 2018.
  • Weaver, Christopher. “Agony, Alarm and Anger for People Hurt by Theranos's Botched Blood Tests.” The Wall Street Journal, Dow Jones & Company, 21 Oct. 2016, www.wsj.com/articles/the-patients-hurt-by-theranos-1476973026.


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