Walgreens has dropped the curtain on its alliance with Theranos, a Silicon Valley start-up company that once promised to be a major disruptor in the medical lab business.
The drug store chain said it is closing down operations at all 40 Theranos Wellness Centers at its Walgreen stores in Arizona, effective immediately. In January, Walgreens stopped Theranos laboratory testing services at its Palo Alto, Calif., location.
Theranos developed a blood test device it named Edison. It uses a few drops of blood from a finger stick to run a number of blood panels, instead of drawing vials of blood from the patient.
Wall Street darling
The company was a Wall Street darling until last year, when The Wall Street Journal published articles questioning the accuracy of Edison's results. It wasn't long before the Securities and Exchange Commission and federal prosecutors launched investigations.
“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,” said Brad Fluegel, Walgreens Senior Vice President and Chief Health Care Commercial Market Development Officer.
Walgreens officials say they told Theranos at the beginning of the year it must stop sending clinical laboratory tests provided through its Wellness Centers at Walgreens to its lab in Newark, Calif., because the lab is under review by CMS.
Disappointed
In a statement, Theranos spokeswoman Brooke Buchanan said the company is working closely with government officials to make sure it complies with and exceeds all regulations.
“We are disappointed that Walgreens has chosen to terminate our relationship and remain fully committed to our mission to provide patients access to affordable health information and look forward to continuing to serve customers in Arizona and California through our independent retail locations,” she said.
Meanwhile, the drama surrounding Theranos' rapid rise and sudden problems apparently is headed to the screen. According to Venture Beat, Hollywood is making a movie about Theranos, with Jennifer Lawrence in the role of Theranos founder Elizabeth Holmes.