DEERFIELD, Ill. — Walgreens has officially severed ties with Theranos and plans to close all 40 Theranos Wellness Centers at its stores in Arizona. Walgreens’ Sunday announcement was a critical blow to the beleaguered blood-testing company that has been plagued with problems since last fall.
Walgreens’ decision was not surprising in the wake of the issues Theranos has dealt with regarding the efficacy of its proprietary blood-testing technology and the recent news the company was invalidating two-years’ worth of blood tests the company has performed. While Theranos maintained that the invalidated results only accounted for about 1 percent of all its tests, the company said it sent out “tens of thousands” of corrected blood-tests to patients and doctors. The company told federal regulators with the U.S. Center for Medicare and Medicaid Services about their decision to void the test results for the two year period. Theranos said it had “voided results associated with any findings that were not consistent with the quality standards the lab holds itself to today, under our lab’s new leadership.” Since the California lab site was flagged earlier this year, Theranos has maintained it’s been addressing those concerns.
“In light of the voiding of a number of test results, and as the Centers for Medicare and Medicaid Services (CMS) has rejected Theranos’ plan of correction and considers sanctions, we have carefully considered our relationship with Theranos and believe it is in our customers’ best interests to terminate our partnership,” Brad Fluegel, Walgreens chief health care commercial market development officer, said in a statement.
Theranos called Walgreens’ decision disappointing. Brooke Buchanan, Theranos’ vice president of communications, said the company will continue to serve its customers through its six independent retail locations in Arizona and California. She said Theranos remains “fully committed to our mission to provide patients access to affordable health information” through its locations.
The Theranos testing sites in the 40 Walgreens locations have been the Palo Alto, Calif-based company’s biggest source of revenue. At one point, Theranos was valued at about $9 billion, however since the company has been plagued by questions about its product, some estimates of the privately-held company have placed its value below $1 billion.
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In a Sunday statement, Walgreens said the closing of the wellness centers will take place immediately and the drug store company will work with customers over the next several days to transition customers to a new option, although what that might be was not said. After the U.S. Centers for Medicare and Medicaid Services flagged Theranos’ Newark, Calif.-based laboratory for shoddy work earlier in the year, Walgreens ordered Theranos to only send blood tests to its Phoenix laboratory for testing.
At one time, Walgreens had intended to expand its partnership with Theranos, opening many more wellness centers across the country. However, in October Walgreens said it had halted planned expansion of Theranos sites until the company addressed to its satisfaction efficacy questions of its blood-testing technology. A recent report in the Wall Street Journal though showed Walgreens may have jumped the gun with Theranos, agreeing to open the wellness centers in 2013 without properly vetting the claims of Theranos. “Quality and safety are our top priorities and we are working closely with government officials to ensure that we not only comply with all federal regulations but exceed them,” Buchanan said Sunday in a statement.
In addition to the loss of Walgreens as a partner, Theranos is also facing a few lawsuits regarding the incorrect diagnoses the company sent to its clients. Buchanan told BioSpace last month that the lawsuits were without merit and the company “will vigorously defend itself against these claims.”