From the article:

“There have been massive recalls of single tests in the past, but I’m not aware of one where a company recalled the entirety of the results from its testing platform,” said Geoffrey Baird, associate professor in the department of laboratory medicine at the University of Washington in Seattle. “I believe that’s unprecedented.”

Based on my ~10 years experience in device/diagnostic industry, I concur with this assessment. I don't think anything at this scale has ever happened. There are only two reasons a diagnostic company would issue such a sweeping retraction of test results:

- The product just plain doesn't work

- The administration of the product (lab procedures, etc) was so shoddy that accuracy can't be guaranteed.

Either of those conclusions is damning. Generally a company tries to limit the scope of the damage, either by scoping for type of test, i.e. "Oh well Edison is fine, but this this particular test (say cholesterol) is failing. The other tests are fine though" or scoping for time "We had some poor lab procedures from September thru December but we cleaned house and we're all better now". The WSJ report implies they did neither.

I agree that this is big, bad, and infrequent.

What I keep asking though, is where were the employees in all this? I also spent over a decade in the device industry, and everyone I worked with, from biochemists to engineers to Regulatory Affairs people would have been screaming loudly. We took patient safety very seriously. Any suggestion that our instrumentation was defective was immediately investigated. This is typical in the medical device industry. I can't believe that the rank and file people working at Theranos were really any different.

So where are their voices?

My guess -- some nasty implicit or explicit "you talk to the press and we'll sue you into oblivion" agreements that employees had to sign.

Which you and I know are especially illegal in the life science industries at the federal and state (in most states) levels. But given how secretive Holmes was toward potential investors and customers this would not surprise me.

1. https://www.glassdoor.com/Reviews/Theranos-Reviews-E248889.h... (look at the one-star ones...many of the rest are suspiciously booster-ish)

2. How do you think the original WSJ article came about? http://www.wsj.com/articles/theranos-has-struggled-with-bloo...

I guess I was hoping that it was a bit of hyperbole on WSJ's part. Sounds like Theranos truly fucked up.

Nope, this is a big deal. Carreyrou's been pretty even-handed throughout his reporting. Hard-hitting, but he's not telegraphed an agenda other than trying to figure out if there's anything really behind this company or if it's all a massive fraud.

there definitely are recalls and calibration issues all the time. But this is very bad, possibly a fatal blow for the company.

This is an Epic Fuck Up that will be discussed for decades in legal, technology, VC, and startup circles. It makes it effectively impossible for a non-established player to innovate in the space for at least 5 years. Additional regulations will hinder innovation for far longer. People will go to jail.

Ironically Holmes might end up getting her wish about all Lab Developed Tests (LDTs) needing to go through FDA approval in addition to CLIA certification, which cover the operation of a lab, not the design and validation of the machines in the lab.

This series of events will create a business case for the ages, one that MBA students will read right after they study the J&J Tylenol crisis of 1982 (http://www.ou.edu/deptcomm/dodjcc/groups/02C2/Johnson%20&%20...)

I am not familiar with the actual laws involved in this kind of case. If it were proven that a Theranos tests harmed a patient and that Theranos willingly obscured the accuracy data to regulars could Holmes be held criminally liable?

That would likely fall under a civil statute. But criminal fraud seems likely. I'd be willing to take a bet on even more trivial matters like falsification of evidence once things started to go south ("it's the coverup, not the crime"). Investigated properly this will probably blow up the FDA too.