Elizabeth Holmes dropped out of Stanford University at 19 with a big, disruptive idea.
She founded Theranos in 2003 with the goal of streamlining and standardizing blood tests via a handheld device. At the time, she was a sophomore majoring in chemical engineering at Stanford University, but she left academia to start her company with a bridge loan from a venture capitalist.
Now 30 and America’s youngest female billionaire, Holmes is the CEO of Theranos, and her company is disrupting the very profitable business of blood testing and analysis.
Its simple value proposition hinges around blood tests and early detection that can help detect dozens of medical conditions based on one or two drops of blood drawn with a finger pinprick. From that nanotainer of blood, Theranos can run more than 70 tests for anything from blood sugar abnormalities to sexually transmitted infections—and at a cost of 50 to 90 percent less than Medicare reimbursement rates.
Walgreens is a believer, both as an investor and retail partner.[more]
The pharmacy giant has opened Theranos Wellness Centers in 41 Walgreens stores in Arizona and expanding in California, with plans to open thousands more coast-to-coast across America. With Walgreens stores less than 5 miles from most Americans’ homes (and less than 1 mile in urban centers), it’s a radical alternative to the current system.
The goal is to make blood testing simple and accessible, painless and fast, even publishing fees for its tests online to make healthcare as transparent as possible and empower the consumer.
Just show up with an ID, insurance card and a doctor’s note, and a Walgreens pharmacist will draw your blood on the spot and send it to a Theranos lab. The goal is to protect the integrity of the process and of the customer’s data.
There’s a Theranos app, and results are typically sent to the customer within 24 hours. “A typical lab test for cholesterol can cost $50 or more,” a recent New Yorker profile of Holmes comments. “The Theranos test at Walgreens costs $2.99.”
The Walgreens partnership with Theranos is just one of the drug chain’s ongoing efforts and innovations to make healthcare more accessible for its customers.
As part of building out its mobile health platform, the retailer has launched an activity tracker fitness band,in addition to partnering with WebMD and recently launching MDLive-enabled virtual doctor visits. (Find out more in our recent chat with Walgreens VP of digital health Adam Pellegrini.)
In addition, Walgreens is expanding its global reach through the acquisition of the remaining shares of Alliance Boots that it did not already own, making Theranos part of the biggest pharmacy retailer in the world—which opens the door to a global rollout, which Holmes has said is one of her brand’s goals.
— Theranos (@theranos) February 2, 2015
As the young entrepreneur outlined at the recent Clinton Global Initiative 2015 Health Matters summit, she envisages wellness centers in most Walgreens and Duane Reade stores, putting Theranos’ blood labs “within five miles of every American.”
As a speaker at TEDMED 2014, she told a rapt audience that her aversion to needles was a key motivator. “I really believe that if we were from a foreign planet and said, ‘OK, let’s brainstorm on torture experiments,’ the concept of sticking a needle into someone and sucking blood out slowly, while the person watches, probably qualifies.”
Holmes said that between 40 and 60 percent of people ordered by their doctor to have a blood test do not do so. “We see a world in which no one ever has to say, ‘If only I’d known sooner.’ A world in which no one ever has to say ‘goodbye’ too soon.”
It’s this disruptive thinking—opening access to actionable clinical information and creating a low-cost alternative that speeds up critical healthcare—that has made Holmes a billionaire and a Silicon Valley darling, profiled not only in the New Yorker but making the cover of Fortune (and its Most Powerful Women summit in October) and boosting the Theranos brand valued to more than $9 billion.
Her powerhouse board of directors, by the way, includes George P. Shultz, Henry Kissinger, Sam Nunn and William H. Foege, the former director of the US Centers for Disease Control and Prevention.
“I think it’s potentially a breakthrough company,” Dr. Delos M. Cosgrove, CEO and president of the Cleveland Clinic, told The New Yorker. “It represents a major change in how we deliver health care. The CVSs and the Walgreens and the Walmarts of the world are going to be taking a lot of things that currently go to primary-care physicians. The impact of that on our industry will be enormous.”
The rise of Theranos couldn’t come at a worse time for competitor Quest Laboratories, which is coming under fire for allegedly scheming with payers and physicians to create a monopoly in California.
Theranos has been able to keep its technology under wraps as it differs from other diagnostic labs, including Quest and Laboratory Corporation of America, that rely on equipment from outside manufacturers like Siemens and Roche Diagnostics.
While those manufacturers requires FDA approval, Theranos does not because it makes its own equipment and doesn’t sell it or move it out of its labs. Theranos is currently certified in 48 states, with two more applications pending, under the federal Clinical Laboratory Improvement Amendments of 1988.
“I believe the individual is the answer to the challenges of healthcare,” Holmes told Business Insider. “But we can’t engage the individual in changing outcomes unless the individual has access to the information they need to do so,” said Holmes.
The Theranos brand, as its passionate employees (watch below) attest, is single-handedly committed to providing that essential access, one pinprick at a time.