Good behavior in federal prison by the disgraced founder of the now-defunct clinical laboratory company earned her the reduction in her original sentence of 11 years
Elizabeth Holmes, founder of failed clinical laboratory blood analysis company Theranos, continues to serve a lengthy term in prison after being convicted of multiple counts of fraud in 2022. However, now comes news that good behavior at her federal prison has shortened her sentence by nearly two years, according to NBC News.
The latest reduction took Holmes’ release from December 2032 to August 2032 in her “11-plus-year (135 month) prison sentence for wire fraud and conspiracy,” NBC reported, adding that Holmes, though Theranos, “defrauded investors out of hundreds of millions of dollars.”
Holmes entered FPC Bryan, a federal prison camp in Bryan, Texas, to begin serving her term in May 2023.
“Holmes had her sentence computation done within the first 30 days of arriving at Bryan,” Forbes reported. Given Good Conduct Time (GCT), Holmes was given 608 days off calculated from the start of her sentence. “If she were to incur a disciplinary infraction, some of those days can be taken away. Most all prisoners receive 54 days per year of GCT based on the sentence imposed,” Forbes added.
The Federal Bureau of Prisons (BOP) can additionally shave off up to a year through its Residential Drug Abuse Program (RDAP). “To qualify, the prisoner must not have a disqualifying offense, such as terrorism or gun charge, and voluntarily provided information that they had a drug or alcohol problem prior to their arrest. This disclosure has to be done prior to sentencing during the pre-sentence interview and must be also documented in the Presentence Report, a detailed report used by the BOP to determine things like classification and programming for the prisoner,” Forbes noted.
Additionally, the federal First Step Act, which President Trump signed into law in 2018, enables Holmes to “earn up to 365 days off any imposed sentence by participating in prison programming such as a self-improvement classes, a job, or religious activities,” Forbes reported.
Given the opportunities to shave time off her sentence, Holmes may ultimately serve just 66 months of her original 135 month sentence in federal prison.
Elizabeth Holmes (above) taken backstage at TechCrunch Disrupt San Francisco 2014 when Holmes was at the height of her fame and popularity. At this point, Theranos’ Edison blood testing device had not yet been shown to be a fake. But evidence was mounting as clinical laboratory scientists and anatomic pathologists became aware of the technology’s shortcomings. (Photo copyright: Max Morse/Wikimedia Commons.)
Fall of a Silicon Valley Darling
Theranos boasted breakthrough technology and became an almost overnight sensation in Silicon Valley when it burst onto the scene in 2003. Holmes, a then 19-year-old Stanford University dropout, claimed Theranos would “revolutionize the world of blood testing by reducing sample sizes to a single pin prick,” Quartz reported.
The height of the company saw Theranos valued at $9 billion, which came crashing down when the Wall Street Journal reported in 2015 that questionable accuracy and procedures were being followed by the company, CNN reported.
“From the moment Holmes concluded her presentation and stepped off the podium on Monday afternoon, she, her company, and her comments became the number one subject discussed by attendees in the halls between sessions and in the AACC exhibit hall,” Michel wrote, adding, “The executive team and the investors at Theranos have burned through their credibility with the media, the medical laboratory profession, and the public. In the future, the company’s claims will only be accepted if presented with scientific data developed according to accepted standards and reviewed by credible third parties. Much of this data also needs to be published in peer-reviewed medical journals held in highest esteem.”
Ultimately, investors who had jumped in early with financial support for Theranos were defrauded of hundreds of millions of dollars and Holmes was sentenced to 11 years/three months behind bars.
“Theranos had only ever performed roughly a dozen of the hundreds of tests it offered using its proprietary technology, and with questionable accuracy. It also came to light that Theranos was relying on third-party manufactured devices from traditional blood testing companies rather than its own technology,” CNN added.
The company shut down in 2018.
And so, the Elizabeth Holmes saga continues with reductions in her prison sentence for “good behavior.” The irony will likely not be lost on the anatomic pathologists, clinical laboratory scientists, and lab managers who followed the federal trials.
Facing pressure by the Food and Drug Administration over its OvaSure test for ovarian cancer, Laboratory Corporation of America announced last Friday in a Securities and Exchange Commission filing that it had stopped sales of the test. The dispute between the FDA and the nation’s second largest laboratory company will be closely watched for insights into how the FDA regulates “home brew” assays.
In the October 20, 2008 issue of The Dark Report, an intelligence briefing provides an assessment on the issues of concern to the FDA about the OvaSure test for detection of ovarian cancer. It was these concerns which led the federal agency to send an initial letter and then a warning letter to LabCorp in recent months.
The current troubles swirling around the OvaSure assay represent two unfolding trends in laboratory medicine-and healthcare in general. One is the trend for new healthcare technology to have a demonstrated clinical benefit, along with a reasonable cost to achieve the improvement in clinical outcomes. Two is the repeated statements by the FDA that it sees the need for tighter oversight of diagnostic assays which incorporate molecular technologies.
The first trend came into play shortly after LabCorp, last June, began selling the OvaSure test as one method to detect cervical cancer. A number of physicians quickly criticized this decision. They argued that data from the clinical trials used to evaluate the OvaSure technology was not comprehensive enough to appropriately support how LabCorp recommended that physicians use the OvaSure test to detect cervical cancer. It didn’t take long before certain women’s health advocates also chimed in with criticism of LabCorp’s marketing of the OvaSure test. These criticisms were similarly rooted in a belief that the data from the clinical studies did not fully support the marketing claims for the test.
As to the second trend, the FDA seems to have noticed these public criticisms. It sent a letter to LabCorp late in the summer describing its concerns. Apparently, the FDA was not satisfied by whatever response was provided by LabCorp, because the agency then sent a warning letter to LabCorp earlier this month. In this correspondence, the FDA again questioned the adequacy of the clinical data used to support the manner in how the OvaSure test is marketed. The federal agency also, in its letters, noted that LabCorp was purchasing components of the test from Yale University and was thus not compliant with aspects of the home brew requirements.
By its actions, LabCorp has obviously decided that the best response to the FDA’s stop letter is to cease sale of the OvaSure test. This story has several chapters yet to come, depending on whether LabCorp wants to pursue its case with vigor and whether the FDA takes additional steps to rein in other home brew assays that many laboratories currently offer in today’s clinical marketplace.
For medical laboratories, there are two useful lessons to draw from the flow of events to date. First, a new laboratory test coming to market will have a much easier time gaining acceptance by physicians and payers if that test has strong clinical data to support its clinical efficacy, as well as its cost effectiveness.
Second, the FDA has once again served notice that it is concerned about home brew assays. This is not auspicious for the nation’s molecular testing laboratories, since any additional regulations will make it tougher for these laboratories to offer “home brew” assays to clinicians. It would also make it tougher for labs to gain additional knowledge about how home brew assays perform in clinical use.
Despite the ever-growing shortage of nurses, nursing schools are turning away qualified applicants in record numbers, due to a sheer lack of space. In 2006, one in three qualified applicants was rejected. In 2007, 31,000 eligible applicants were denied entry. That number is up sharply from only 3,600 rejections in 2002.
Despite what one might think from the large number of rejections, that’s only part of the story. There are additional thousands more qualified and interested applicants for nursing schools who don’t even bother to apply because rumors of imminent rejection have deterred them. These are the findings of a survey of nursing programs conducted by the National League for Nursing (NLN). Nursing schools reported an 8.7% drop in applicants, some 30,000 fewer applications, in 2006 compared to 2005.
This drop in applications leaves nursing schools unfazed, however, as they are still overwhelmed with admission applications from far more qualified applicants than they could possibly accept. For example, the University of Colorado Denver School of Nursing combs through 1,000 applications for just 200 to 230 seats each year.
Not only is there a lack of instructors and classroom space in the nursing schools themselves, but there are not enough training slots in doctors’ offices and local hospitals for each nursing school student. One solution to this problem was put forth at Porter Adventist Hospital in Denver. Porter Adventist provided incentives for hospital nurses who were willing to work with nursing students. The hospital agreed to pay the full salary for nurses who would go on to become part-time faculty, wiping out the threat of a pay cut for those nurses. This allowed nurses to pursue their master’s degrees, which the hospital hopes will alleviate some of the teaching shortage in coming years. The hospital also gained access to nurses-in-training that might be interested in signing on for full-time work after graduation.
Dark Daily observes that, for all the discussion about the shortage of nurses, little attention is given to the fact that thousands of qualified applicants are knocking at the doors of nursing schools and are being denied admission simply because there is not enough classroom space and not enough instructors. By comparison, the shortage of medical technologists (MTs) to staff the nation’s medical laboratories is rooted in two factors. First, the number of active MT training programs was greatly reduced during the past decade, leaving many communities around the United States without any local MT training program. Second, many fewer people are interested in a career as a medical technologist today, compared even to just a few years ago. Thus, some active MT training programs must actively recruit students to fill up all the available spaces for each term.
Going forward, the laboratory medicine profession must address both of these factors if it is to maintain an adequate supply of fully-trained medical technologists to staff the nation’s clinical laboratories. During this decade, little progress has been made on either problem. Thus, the impeding wave of retirements by the baby boomer MTs is likely to further exacerbate the already vexing shortage of medical technologists and other skilled laboratory professionals.
