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Theranos' biggest mistake was its decision to offer its tests directly to consumers.

Stashed in: Medicine, Healthcare, Biotech!, Healthcare!, Cognitive Bias

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A potentially fatal flaw:

Many new health companies have made waves by treating healthcare like any other product you might buy. Take 23andMe, for example: Rather than making an appointment at the doctor, sitting for an array of expensive genetic tests, waiting days for the results and then having to trek back to the office to discuss them at your physician's convenience, the company offered a simple, straightforward alternative: Spit in a tube, mail it in, and get results online in a visual, simple-to-understand format.

Theranos wants to do something similar, but with blood instead of spit. Skip the arduous, traditional blood-test process. Show up at your local Walgreens, fill in a form, and get your results in a few hours.

Here's the problem: Doing it this way — without a doctor involved — puts the company under far more scrutiny than they'd endure if they included physicians in the process. 

Dozens of biotech leaders we've spoken with agree that the idea of offering healthcare products directly to customers is challenging. Many have told us they wouldn't do it — it's hard enough to do so with doctors involved. The FDA has strict regulatory oversight over information they deem could influence the health of a patient.

"The worst thing you can do in facing with the FDA is offer a test directly to the consumer,” Genalyte CEO Cary Gunn told Business Insider during the JPMorgan Healthcare conference in January. Gunn's company is working on developing a rapid test for diseases like rheumatoid arthritis. It's similar to Theranos in that Genalyte aims to do it by having the test read only a single drop of blood. But Gunn said he aims for it to be used only with the involvement of a physician.

Even with the recent challenges, Theranos VP of Communications Brooke Buchanan said the company's commitment to patient health and access hasn't changed.

Theranos isn't alone in facing the issue of how to offer a test directly to consumers. Many "disruptive" Silicon Valley health companies have run into this regulatory problem as well.

”Elizabeth Holmes: The Breakthrough of Instant Diagnosis [Updated Sept. 8, 2013 12:04 p.m. ET]”:

(A good description of how the testing is done.... at least in 2013)

”Boy Invents Cancer Test”:

(I hope good things come from what he did.)

Clearly there's a difference between inventing a good medical test and getting FDA approval for it. 

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