Walgreens’ Execs Ignored Doubts in Theranos’ Technology in Fear of Deal Crumbling
May 26, 2016
By Alex Keown, BioSpace.com Breaking News Staff
CHICAGO – Deerfield, Ill.-based Walgreens never vetted Theranos blood-testing technology before forming a partnership with the Palo-Alto, Calif. company, the Wall Street Journal reported this morning.
The Journal reported that Deerfield, Ill.-based Walgreens, Theranos’ biggest partner, never validated Theranos’ blood testing technology before forming its partnership with the company. Rather than have a team from Johns Hopkins University validate the technology that purports to use a single drop of blood for testing purposes, Walgreens went ahead and entered into its agreement in 2013, opening 40 of its stores in Arizona to the company, the Journal said. Walgreens initially had plans to expand Theranos’ presence in stores across the country. However, Walgreens held off on expanding after reports of issues with Theranos’ proprietary technology surfaced in the fall of 2015. After failing to vet the technology, Walgreens began to learn about the issues related to the blood-testing devices from media reports.
Throughout the relationship, Walgreens allegedly shrugged off any concerns about Theranos’ technology for fear the Palo Alto, Calif.-based company would strike a deal with a rival drug store company.
However, as more and more concerns over Theranos’ technology have been raised in the past several months, Walgreens has distanced itself from Theranos. In March, Walgreens was reportedly looking to close the 40 blood testing sites in its Arizona stores. Walgreens began looking for ways to terminate its agreement with Theranos, especially after concerns were raised by the U.S. Center for Medicare and Medicaid Services about Theranos’ California laboratory. The warning letter from the Centers for Medicare and Medicaid Services told Theranos that its laboratory practices at the Newark site were not in compliance with conditions set forth by the federal Clinical Laboratory Improvement Amendment (CLIA). The letter said the company’s hematology practices at that site “posed immediate jeopardy to the health and safety” of patients.
Now that Theranos has invalidated two years of its test results to doctors and customers, Walgreens may be able to find out what it was reportedly looking for a few months ago. The invalidation of those test results means that some of the information sent could have been incorrect, leading to doctors making an incorrect diagnosis. That issue of incorrect diagnoses is at the heart of a lawsuit against Theranos filed in the U.S. District Court of Northern California. The lawsuit was filed by one individual, but has been structured to become a class action lawsuit. The complainant, identified by the initials MPB, said in the complaint that the now invalidated blood tests means patients may have been subjected to “unnecessary or potentially harmful treatments and/or been denied the opportunity to seek treatment for a treatable condition.”
Brooke Buchanan, vice president of communications for Theranos, told BioSpace (DHX) in an email “the lawsuit filed today against Theranos is without merit. The company will vigorously defend itself against these claims.”