Christopher Weaver of the Wall Street Journal spoke with Jenna Miller of the Reynolds Center to discuss his work with the award-winning investigation, “Testing Theranos.” This project took home the Silver Award at the 2016 Barlett and Steele Awards for Investigative Journalism. Weaver explains how the 10-month investigation began and the challenges they faced questioning a company that had become a media-darling. He also explains some of the impact the investigation had not only for the company, but for many of the company’s investors, employees, and clients.
Transcript
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Jenna Miller: How to Cover Money: Inside the 2016 Barlett and Steele Silver award-winning investigation, “Testing Theranos.”
Christopher Weaver: It takes courage to break through the veil of secrecy that all kinds of companies can create around themselves and their products. You know, it takes a willingness to be told to beg off 100 times for every 10 people who talk to you.
Miller: Hello and welcome to the Reynolds Center How to Cover Money podcast. We’re coming to you from the Donald W. Reynolds National Center for Business Journalism, based at the Walter Cronkite School of Journalism and Mass Communication at Arizona State University. I’m Jenna Miller today’s host of the How to Cover Money podcast. Today we talk with reporter Christopher Weaver of The Wall Street Journal about the 2016 Barlett and Steele Silver Award project, “Testing Theranos.” Weaver worked with other Wall Street Journal reporters on a 10-month investigation exposing problems with the blood testing company Theranos. The company claimed to have developed new technology, but the Wall Street Journal showed that the scope of the technology was limited and the results were unreliable. As a result of this reporting, Theranos is facing multiple lawsuits, and its founder, Elizabeth Holmes, has been banned from running a laboratory for two years. Back in 2013 the media had seemed to fall in love with Elizabeth Holmes and Theranos. I asked Weaver when he and his team began to realize that the reports of this breakthrough discovery didn’t make sense.
Weaver: John, who led the charge in this project, but couldn’t be here today, and I have both been covering healthcare for a long time. Theranos, in the last couple of years, has been all the rage in this industry since they sort of came out from their secret phase in 2013, opened stores in Silicon Valley and here in Phoenix. Miss Holmes, its founder, had attracted a lot of media attention that was showing up in major glossy magazines and glowing profiles in Fortune and in the New Yorker and we were both hearing about her accomplishments when we talked to industry sources far and wide. John got a confidential tip last fall from one of his sources, and did what a good reporter does, he followed up on it. The tip was that, basically, not all was as it seemed with the technology and operations at this company. And he was able to find a variety of sources who corroborated that, in fact, there were problems with the technology that they had claimed to develop. The claim was that they were going to upend the lab industry by introducing a new device that, with just a droplet of blood from somebody’s finger, could do dozens of lab tests. And the truth is that, in fact, they were using very conventional devices to do many of those tests, and they weren’t even doing good quality controls to make sure that the results from those tests were accurate.
Miller: Through steady footwork, Weaver and his colleagues connected with solid sources who spoke to what was happening at Theranos, but the reporters needed to get to the tipping point when they felt they had a clear picture of what was going on inside the company.
Weaver: Well, you know, this was, this was mostly last year, and mostly my colleague, John, who pioneered this series. But he put together, he initially talked to this confidential source who had basically only heard secondhand, right? So it was quite a challenge to find people who both could corroborate this and had first-hand knowledge and who were willing to talk, because the company was characterized by a level of secrecy that goes beyond even what might be typical in Silicon Valley. And I think, by, I don’t know, the middle of the year last year, John had dug up enough sources to corroborate the initial tip, and gone to the company, and then, did battle behind the scenes with this company and its representatives, including lawyers, who were insisting at that time that the reporting was untrue. It’s very difficult to go forward with a story that cuts against what your peers and media are reporting, and when the company is completely denying your findings. But by that point, his reporting was so rich that the Journal had full confidence. And you know, we went forward, and as our reportings unfolded over the course of 2016 it’s quite clear that the problems that John’s initial sources had identified, in fact, were just the tip of the iceberg, and that, as regulators have taken on, there were noticing now they found a wealth of issues that has now resulted in Miss Holmes being banned from the lab industry for at least two years – a regulatory decision that she’s now appealing.
Miller: Because of their strong reporting. Weaver and his colleagues were confident in defying common beliefs about a company that had become a media-darling. He gave some advice about what it takes for investigative journalists to succeed.
Weaver: Persistence, in this case, to really cut against the grain of a narrative that was taking shape and across the media, and to resist the challenges of a company that was insisting that it was right and we were wrong. It takes courage to break through the veil of secrecy that all kinds of companies can create around themselves and their products. It takes a willingness to be told to beg off 100 times for every 10 people who talk to you.
Miller: The Wall Street Journal reporting had a huge impact on Theranos and the people who relied on the company for accurate blood tests.
Weaver: We’ve been following this for a long time now, and when John, you know, first started looking into it, Miss Holmes and Theranos were considered to be a huge success. And since our first stories, which date back to October of 2015, the FDA has called a component of their technology, a thing called a nano-tainer to collect blood, an unclear medical device, and told them to stop using it. The Centers for Medicare and Medicaid Services, which is the main U.S. regulator of lab services, has sanctioned the company by revoking its license to do tests in the U.S. at its main lab in California. It’s banned Miss Holmes from the industry for at least two years. It’s effectively shut down their lab operations, which they closed in October. The result of our reporting ultimately forced Walgreens, the U.S. Drug Store giant that was their main commercial partner and in whose stores in the Phoenix area, Theranos set up its testing centers. It’s forced them to recognize that the promises that were the basis of their partnership, in fact, were largely unfounded, and they backed out that partnership. They’re now suing Theranos in federal court for breach of contract. That’s not their only court challenge. The SEC the U.S. securities regulator, is pursuing a civil case against Theranos. There’s a separate federal criminal probe. At least one major investor has sued the company, a hedge fund that invested almost $100 million in San Francisco. In the future, the saga continues, and I think the future of this company remains to be seen. But, I think certainly John’s, you know, early reporting has been more than borne out by the actions of these regulators and investors.
Miller: Thank you Christopher Weaver for spending some time with us discussing your award-winning business investigation and thank you listeners for tuning in to another episode of the How to Cover Money podcast. If you’d like to read the Wall Street Journal investigation, “Testing Theranos,” be sure to visit businessjournalism.org. We’ll include links to the award-winning stories in the show notes for this episode. If you’re in need of more business journalism training, the Reynolds Center can help. Visit businessjournalism.org to find articles and self-guided training, download our free eBook: Guide to Business Beat Basics, or sign up for our monthly newsletter. The newsletter will keep you up to date on training opportunities from the Reynolds Center year round. If you enjoyed the How to Cover Money podcast, be sure to subscribe on iTunes, Stitcher or SoundCloud, and while you’re there, leave us a rating or review to help make the podcast more visible to other business journalists. Support for the How to Cover Money podcast comes from the Donald W. Reynolds National Center for Business Journalism. Join us on the next episode of our podcast where we talk with Harriet Ryan and Matt Lait of the LA Times about their Barlett and Steele Bronze award-winning investigation, “Oxycontin’s 12-hour problem.”
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