Before 2018, Elizabeth Holmes and Theranos, the company she founded, were lauded nationally and internationally for a magic box that promised a new era in democratized healthcare. On that promise, Theranos attracted some $700 Million in funding, signed a deal with Walgreens, and reached the dizzying heights of a $10 Billion valuation – all without turning a profit. The truth, however, was that Theranos’ magic box didn’t work.
The party finally came to a crashing halt in 2018, when the Wall Street Journal exposed Theranos for the fraud that it was. But Theranos did not start out that way. Rather, the way to a federal indictment and conviction for Ms. Holmes began with a series of small steps, many of which were entirely defensible, but which collectively walked Theranos into a mire of half truths and lies that not only defrauded investors but also threatened public health and welfare.
This story is not unique to Theranos. It finds echos in other scandals, including those that embroiled Purdue, Insys Systems, Forest Laboratories, and more.
The tale is cautionary for participants in the Health Sciences space, who work to bring new therapies, treatments and other much needed innovations to market. The truth is that ethical and regulatory requirements are frequently open to interpretation and are circumstance and fact dependent. Those who fail to keep an eye fixed on their mission and best practices can find themselves making questionable decisions that can severely compromise if not destroy what they have worked so hard to build.
Developing best practices, understanding the regulatory and business pitfalls, and appreciating other factors critical to your business are essential to avoiding poor decisions both great and small that in aggregate can derail your plans. Looking at just a few:
Understand the Regulatory Frameworks
Pharmaceuticals, Biotech, Medical Devices and other participants in the health science space exist in a complex and sophisticated regulatory and ethical environment that governs everything from clinical trials to post-marketing surveillance. A comprehensive and nuanced understanding of this environment is essential.
Knowing how organizations like FDA, CDER, DHS, USPTO, CMS, and other regulatory and enforcement bodies function will likely influence your business and the way it interacts with investors. Fully considering the potential legal risks of non-compliance will help you avoid inevitable complications. This takes a team, not only of researchers and experts, but also experienced legal counsel who can help you evaluate and understand your options and alternatives.
Regulatory Approvals and Market Access
As Theranos proved, how one accesses the market for a product can be critical. Understanding approval pathways and strategies, and how those may affect investor relations and public communications, can have a big impact on your business down the road. Experienced legal counsel will be one of your best resources in balancing out at times competing concerns.
Safeguarding Intellectual Property
After the tremendous effort and investment put into building a portfolio of know-how, work product, innovations and other intellectual property, that portfolio must be protected. Once intellectual property is compromised, it is difficult if not impossible to retrieve. Its loss may also prove dangerous to the health of your business and investor relations. Safeguarding and capturing intellectual property is therefore critical, from the beginning, and should be captured in your corporate culture and values, employment agreements, development contracts and more.
Engage Experienced Counsel
Baker Jenner has helped many participants in high stakes industries derive and implement solutions that have helped safeguard the bottom line, protect assets, and improve outcomes. The team at Baker Jenner has extensive experience helping businesses address these challenges head-on to ensure long-term success. If you would like to discuss how we can work together to adapt your strategies, schedule a consultation by calling (404) 400-5955 or scheduling a consultation via our online form today.
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