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I do not know why but I feel that one cause of this confusion is rooted in using such terms as "business ethics". Just act ethically, if you have to go to a course on "business ethics" then everything is lost already. If you view it from this point of view the behavior of NewCo is just not ethical, full stop.


It seems surprising that they don't have data, as comparing tests with continuous outcomes is fairly straightforward. Also there are standardised tests of how well calibrated they are. They can produce a publication comparing their methods to existing methods without revealing very much at all about the device. So you have to wonder why?


Fresh off the press: employee of "cryotherapy" clinic died while having cryotherapy. Link. No science behind such treatment but customers believe it is safe and effective.


From NYTimes http://www.nytimes.com/2015/10/28/business/theranos-quality-control-was-questioned-by-fda.html?_r=0 for those who don't have access to WSJ.


Context is important here. Every chair can claim some advantages. Every snack product can brag about great taste. Puffery in such contexts is common. Both chair ergonomics and taste have subjective components. It's not unethical to have an informercial where two actual users claim your chair is the most comfortable they've ever used and their back doesn't hurt.

In the medical field, there are more stringent ethical and legal requirements since the field inherently involves issues of life and death.

Nutritional supplements by law have to state essentially that "nobody knows whether this works - certainly not the FDA".


zbicyclist: Thanks for filling in the other side of the story. Ethics is a community standard. I don't think we will ever get consensus. There are certainly many products out in the market that pretend to have health benefits but don't actually have any science behind them. Consumers who purchase these products are fooled. They may even kill, as the cryotherapy case shows. I personally feel troubled by such cases. But the gray area is where there is bad science - and lord knows, it is easy to publish bad science, as is well-documented on other blogs, like Andrew Gelman's.

Christian: I agree that ethics don't have to have a business context. However, the existence of the profit motive is a driver of some unethical behaviors. I sometimes hear justification based on cost/benefit calculations.


NYTimes has an article http://www.nytimes.com/2015/10/30/business/the-narrative-frays-for-theranos-and-elizabeth-holmes.html?ref=business where several experts raise the same basic concern as I have. This is something that is easy to test, so why haven't they, and if they have why haven't the results been made public.

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