Walgreen Co., a big drug store operator officially announced that they cut ties with a strained alliance Theranos Inc. This is in lined with the decision of regulators to impose appropriate sanctions to the controversial Silicon Valley Firm.
The strained relationship started when officials of Walgreens Boots Alliance Inc. got frustrated when Theranos failed to provide the appropriate documents for its blood testing machine. Walgreens asked for the details when they learned that Theranos had corrected thousands of its blood tests including the samples collected from customers of Walgreens Pharmacies. This news came from people who are familiar with the said partnership.
Last Sunday, Walgreens issued a press release statement saying that the company is terminating their three year partnership with Theranos. The said termination of contract is effective immediately. They will also shut-down all the laboratory testing services in all Walgreens locations.
In the next few days the company will work on the transition process for the customers.
Brad Fluegel, Chief Healthcare Commercial Market Development Officer and Senior Vice President of Walgreens said in the press release statement that because of a report of voiding of some test results and the Centers for Medicare and Medicaid Services or CMS, rejected plans of correction and consider sanction, the company decided to terminate the relationship with Theranos. They come up with this decision because the company believes that it is their customer’s best interest that should be their primary consideration.
Theranos faced allegations that most of its laboratory test was performed in a traditional laboratory machines not part of its proprietary. The report prompts sanctions against Theranos CEO, Elizabeth Holmes. In a report in Wall Street Journal published in May, Theranos had voided the results of its proprietary – Edison device test that were carry out in 2014 and 2015.
Walgreens decision to cut ties with Theranos is a significant blow to the company. There are 40 blood draw sites built inside the Walgreens store in Arizona which they call Wellness Centers. The other Theranos lab-testing services locations in Palo Alto, California has already been stopped. An analyst says that blood-draw sites in Arizona had been the primary source of revenue for Theranos. Since the tie-up with Walgreens was announced in September 2013, the partnership alliance has given Theranos a stamp of credibility.
In response to Walgreens press release statement, a Theranos spokesperson said in an interview that they are working with government officials so they can provide the necessary federal regulations and even go above their requirements. The Theranos spokesperson also noted that the company is disappointed with Walgreens decision to terminate the three-year old relationship. The company stressed that they remain committed in their mission in providing patients with affordable health information. They also look forward to continue serving patients in California and Arizona through their retail locations.
Before, Theranos was praised for its less invasive and fast blood testing technology but things change when media reports questioned the accuracy of their proprietary test. The SEC and Federal Prosecutors from US Attorney’s Office had investigated the company whether they misled their investors.
The Controversial Deal
Walgreens has made a right decision in terminating the partnership deal with Theranos. The patients are paying their hard-earned money in the hope that the services provided will give them accurate results and help them save a few dollars. But it turned out that the lab-testing service offered by Theranos is not fully validated and there are some issues of voiding.
If Theranos will be able to provide the appropriate documents that would confirm the reliability and accuracy of their testing services then they will not be put into public eye.