In the wake of the news that federal officials have informed Theranos its deficiencies pose “immediate jeopardy to patient health and safety,” the medical-testing startup’s partnership with Walgreens is hitting a bump. On Thursday afternoon, the drugstore giant announced that it told Theranos to stop sending the clinical laboratory tests collected from 40 Theranos Wellness Centers at Walgreens pharmacy locations in Arizona to the startup’s lab in Newark, California, for analysis.
The Theranos facility in Newark was cited yesterday for deficiencies related to hematology, documentation, and oversight by the Centers for Medicaid and Medicare Services, following visits to the lab in November and December. The CMS gave Theranos 10 days to fix the problems under the threat of sanctions and enforcement actions.
Until those issues are “fully” resolved, Walgreens said that no patient samples collected at the wellness centers should be sent to the Newark lab. Walgreens is also suspending Theranos laboratory services at its Palo Alto store, “effective immediately.”
Theranos, the once-high-flying startup with a $10 billion valuation, has hit a rocky patch in recent months due to concerns about the efficacy and reliability of its proprietary technology, which it claimed could perform “hundreds of blood tests” with a mere drop of blood. The company’s troubles began last October, with the publication of an in-depth Wall Street Journal expose; soon after, the FDA said that Theranos had been using an unapproved medical device to collect samples from its patients.
“Our CLIA-certified Arizona lab, which handles approximately 95% of our wellness center lab tests, is not impacted by this week’s findings and will continue to serve wellness centers,” said a Theranos spokeswoman. “This week’s CMS findings relate solely to certain aspects of a different lab – our Newark, CA lab – and do not reflect the current state of that lab. This is an issue that many other labs have faced, and we have been and will fix it quickly and completely, working with our regulators as we always do. We are open for business, confident in our technologies, and unwavering in our commitment to provide Arizonans with the care and service they deserve.”