to hear anything that contradicted her point of view. As he looked around the table, he noted that she had brought no regulatory affairs expert to the meeting. He suspected the company didn’t even employ one. If he was right about that, it was an incredibly naïve way of operating. Health care was the most highly regulated industry in the country and for good reason: the lives of patients were at stake.
Shoemaker told Elizabeth she would need to get something in writing from the FDA supporting her position if she wanted him to greenlight the use of her machines on army personnel. Her face conveyed deep displeasure. She resumed her presentation but gave Shoemaker the cold shoulder for the rest of the day.
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IN HIS EIGHTEEN-YEAR CAREER in the army, Shoemaker had come across a lot of people who seemed to think the military was exempt from civilian regulations and free to conduct medical research as it pleased. That was simply not the case, though this wasn’t to say it hadn’t happened in the past. The Pentagon tested mustard gas on American soldiers during World War II and Agent Orange on prisoners in the 1960s. But the days of unsupervised, freewheeling medical experimentation by the military were long gone.
During the Serbian conflict in the 1990s, for instance, the Pentagon made sure to get the FDA’s assent before offering troops deployed in the Balkans an experimental vaccine against tick-borne encephalitis. And only soldiers who wished to receive the vaccine were given it. Similarly, the army worked closely with the agency to make an investigational vaccine against botulinum toxin available to soldiers in Iraq in 2003. At the time, concerns were high that Saddam Hussein had stockpiled the lethal biological agent, and the promising vaccine, which had been developed by researchers at Fort Detrick, hadn’t yet been approved by the FDA.
In both instances, the army consulted an institutional review board, or IRB—a committee within the military that monitors medical research to ensure that it is conducted safely and ethically. If the IRB deems that a proposed study doesn’t pose significant risks, the FDA will usually allow it to go forward, provided it’s carried out under a strict protocol the committee has reviewed and approved.
What was valid for vaccines was also valid for medical devices. If Theranos wanted to try out its blood-testing machines on troops in Afghanistan, Shoemaker felt certain that it would need to put together an IRB-approved study protocol. But since Elizabeth had been so adamant and he was also getting second-guessed by CENTCOM, he decided to bring in Jeremiah Kelly, an army lawyer who’d previously worked at the FDA. He scheduled another meeting with Elizabeth so Kelly could hear from her directly and provide a second opinion. They agreed to meet at 3:30 p.m. on December 9, 2011, at the Washington, D.C., offices of Theranos’s law firm, Zuckerman Spaeder.
Elizabeth came to the meeting alone with a single-page document outlining the same regulatory approach Shoemaker had heard her present a few weeks before in Palo Alto. He had to give it to her: the structure she laid out was creative. One might even call it sneaky.
The document explained that Theranos’s devices were merely remote sample-processing units. The real work of blood analysis would take place in the company’s lab in Palo Alto, where computers would analyze the data the devices transmitted to it and qualified laboratory personnel would review and interpret the results. Hence only the Palo Alto lab needed to be certified. The devices themselves were akin to “dumb” fax machines and exempt from regulatory oversight.
There was a second wrinkle Shoemaker found equally hard to swallow: Theranos maintained that the blood tests its devices performed were laboratory-developed tests and therefore beyond the FDA’s purview.
The Theranos position then was that a CLIA certificate for its Palo Alto lab was sufficient for it to deploy and use its devices anywhere. This was a clever theory, but Shoemaker didn’t buy it. And neither did Kelly. The Theranos devices were more than just dumb fax machines. They were blood analyzers and, like all other blood analyzers on the market, they would eventually need to be reviewed and approved by the FDA. Until then, Theranos would need to consult with an institutional review board and come up with a study protocol that the agency could live with. It was a process that typically took six to nine months.
Elizabeth continued to disagree despite the army lawyer’s presence. Her body language wasn’t as