Walgreens Shutting Down Theranos Centers 'Immediately'

Walgreens has had enough of Theranos, the beleaguered blood-testing company.

In a press release Sunday, the drugstore chain announced "it will be terminating its relationship and closing operations at all 40 Theranos Wellness Centers at its stores in Arizona, effective immediately."

“In light of the voiding of a number of test results," said Walgreens Senior Vice President Brad Fluegel, in the statement, "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.”

The announcement ends a relationship that began in 2013, with the opening of Theranos centers at Walgreens in Phoenix and Scottsdale, putting a previously furtive Theranos on the map.

Brooke Buchanan, Theranos' vice president of communications (one can think of cushier jobs at this point), issued  this statement in response to Walgreens' announcement:

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. 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.

The Wall Street Journal is reporting that Walgreens executives decided to sever the relationship with Theranos in January, after the Centers for Medicare & Medicaid Services, which regulates the nation's blood labs, found serious, even life-threatening, deficiencies at Theranos' facility in Newark, Calif. The federal agency later rejected Theranos' submission of proof that it had corrected those problems, threatening to pull the lab's license and ban founder and CEO Elizabeth Holmes from operating a lab for two years.

Theranos has since submitted a further plan of correction and is awaiting a final decision from CMS. Theranos also voided or corrected tens of thousands of blood tests, sending notices to doctors and patients in May.

The Journal, citing "people familiar with the matter," said Walgreens waited until now to terminate the Theranos deal out of fear it would be sued.

Theranos helped push through an Arizona law in 2015 that gave consumers the right to order their own blood tests.

Theranos still lists five locations where consumers can get their blood tested, four in Arizona and one in California. The Walgreens web page that used to list the locations of Theranos centers now redirects to the drugstore chain's home page.

So what effect will this have on Theranos' business? From The New York Times:

While Theranos might struggle along with its own retail units, clearly most of its customers came from the testing centers in Walgreens. Having easily accessible locations in corner drugstores was part of Theranos’s grand plan to upend the laboratory testing business, and it had at one time said it eventually envisioned being in Walgreens drugstores nationwide.

And from The Wall Street Journal:

Without Walgreens, Theranos would no longer be competing with major labs. To regain its access to consumers, it would have to forge a new retail partnership, offer its blood-testing services directly to more doctors’ offices or open its own blood-draw sites, among other options. It already has moved to open a blood-testing center in Arizona. Recently, the company has been exploring a tie-up with another pharmacy or supermarket, according to a person familiar with the matter.

And don't forget, several lawsuits are pending, as well.