Posts Tagged ‘Walgreens’

Service of Too Good to be True II

Thursday, June 28th, 2018

Photo: depositphotos.com

I’ve followed highlights of the Elizabeth Holmes/Theranos criminal case for a while in newspaper and radio coverage and a few things nag at me:

  • How did high profile investors, partners and board members get duped by a machine and service that never worked?
  • Even though “Federal prosecutors filed criminal charges against Theranos Inc. founder Elizabeth Holmes and the blood-testing company’s former No. 2 executive,” news focus brushes over life-changing damage done to patients who think they are OK when they’re not.

The charges allege “that they defrauded investors out of hundreds of millions of dollars and also defrauded doctors and patients.” This quote and the one above made up the lead to John Carreyrou’s recent Wall Street Journal article.

Photo: en.wikipedia.org

“The blood test machine her company created doesn’t work — and never has,” Scott Simon wrote recently, capturing an interview with Carreyrou on NPR’s Morning Edition that he hosts. “She raised almost a billion dollars from investors, including Rupert Murdoch, Carlos Slim Helú, and the family of Betsy DeVos, and signed contracts with Walgreens and Safeway, by lying to them.” Carreyrou’s original coverage led to the 2½ year investigation.

He also wrote a book about the scandal, “Bad Blood: Secrets and Lies in a Silicon Valley Startup,” and the test that was expected to revolutionize the industry by costing less and using blood drops from a finger pin prick.

Simon continued quoting Carreyrou: Holmes and “Sunny Balwani, who was the number two of the company, knew as they were rolling out the blood testing services in Walgreens stores in California and Arizona that the blood tests were faulty, and yet they still went ahead with the rollout. And there were, I came across personally in my reporting more than a dozen patients who had health scares because they received bad results from Theranos.”

Photo: pehub.com

This was the most in-depth comment I could find about the patient victims of the scandal. Others mostly referred to them though in his New York Times coverage, Reed Abelson wrote that the so-called tests endangered lives.

So how did Holmes get away with bamboozling five star board members along with all the rest? Carreyrou told Simon “she capitalized on this yearning there was, in Silicon Valley and beyond, to see a woman break through in this man’s world in Silicon Valley.” In addition, he said, the investors based their decision on the Walgreens contract, figuring the company had confirmed the accuracy of the tests. This was a false assumption. Holmes refused to show the equipment claiming she was afraid the competition would discover the secret sauce.

About venture capitalists Abelson shared the prediction of Lakshman Ramamurthy, a former FDA official, now with Foundation Medicine, who “is not certain investors have learned their lesson. Companies like Theranos, which offered little hard evidence that its tests worked to its investors, ‘have their own rules,’ he said. ‘That hasn’t changed. The Silicon Valley hubris remains.’”

According to Ken Sweet’s AP article, referring to Holmes and Balwani: “If convicted, they could face prison sentences that would keep them behind bars for the rest of their lives, and total fines of $2.75 million each.” At one point the company, built on lies, was worth $10 billion +. I wonder if the fine covers the damage to investors sufficiently.

Surely lawsuits will follow should patients prove they were harmed either because they weren’t properly diagnosed or were damaged because they were given harmful medicines they didn’t need. Are you surprised that such high profile businesses, canny investors and high profile board members were deceived by the old “I can’t show you the goods” trick so soon after Bernie Madoff played the same card?

Photo: harp-onthis.com

Service of Patriotism

Thursday, August 7th, 2014

Parade

I cheered when I heard NPR Radio’s coverage yesterday morning of drugstore chain Walgreens’ decision to keep its headquarters in Illinois rather than in Europe where it had considered moving to save on taxes. It is in the final stages of purchasing pharmacy chain Alliance Boots headquartered in Switzerland. At the end of the segment the reporter noted that the stock was down 15 points.

WalgreensUSA Today’s headline on Adam Shell’s story was “Walgreens move to keep HQ in USA gets thumbs-down from Wall Street.”

In The Wall Street Journal’s Marketplace section, Damian Paletta and Dana Mattioli wrote: “The Walgreen situation has been widely watched because most tax-beneficial merger deals lately have been in the pharmaceutical industry, where many companies have substantial profits overseas.”

double punchLater in “A Double Punch for Tax ‘Inversion,’” Paletta and Mattioli reported: “Companies, especially ones in health care, have been busily striking inversion deals in the past year. But lately, a chorus has risen against the deals. President Barack Obama last month dubbed them ‘wrong’ and called on Congress to do something about what he termed an ‘unpatriotic tax loophole.’”

Just whom do the American investors think would make up the loss in tax revenue? Can’t you hear some of these same people sniffing self-righteously that they’d never invest in a company that made firearms or cigarettes? Had Walgreens headquarters moved abroad there would be more than lost tax revenues: What about jobs in the Land of Lincoln?

While microscopic potatoes as compared to Walgreens and its some 8,200 stores [this estimate according to Paletta and Mattioli], I’ve written previously about a renowned southern living history museum that once sold American-made reproductions. My husband and I have stopped buying their wares. The tavern glasses we subsequently ordered from their catalog weren’t near the quality of those we’d bought in the gift store. Further: The second set was made abroad.

What’s with us? Why have investors become so numb? Is patriotism old fashioned, out of sync with life today and no longer a factor in the public’s buying decisions?

what's up doc

Get This Blog Emailed to You:
Enter your Email


Preview | Powered by FeedBlitz

Clicky Web Analytics