Theranos and Walgreens Bury the Hatchet—For Now

It all looked so promising back in 2015. Privately-held Theranos was poised to usher in a new era of diagnostics with its revolutionary fingerprick technology for performing a wide array of tests with just a few drops of blood. Walgreens was (and remains) the nation’s largest retail pharmacy chain. So the arrangement to open independent “wellness centers” at Walgreens stores across Arizona and California seemed like a game changer, one that Walgreens hailed as the next step in its “efforts to transform community pharmacy.” Arizona’s enactment of legislation empowering residents to order tests for themselves without a doctor’s order was the icing on the cake.

Just 16 months later, it had all come undone. The Theranos Edison platform failed to meet its lofty expectations. Walgreens ended the partnership in July 2016; in November, it sued Theranos for $140 million claiming that it misrepresented the technology’s capabilities. Meanwhile, the Centers for Medicare and Medicaid Services slammed Theranos and its CEO Elizabeth Holmes for a series of infractions at its Newark, CA, lab. The Arizona Attorney General joined the fray by bringing a consumer fraud lawsuit.

Theranos on the Settlement Path
After settling with CMS in April and Arizona in April, Theranos has now reached a tentative settlement agreement with Walgreens. Under the deal, which requires official court approval and is also reportedly still subject to negotiation, Theranos would pay Walgreens a sum south of $30 million.