Walgreen Ends Its Shaky Relationship With Theranos
The Wall Street Journal described Walgreens Boots Alliance Inc (NASDAQ: WBA)'s relationship with Theranos as an "extreme case study of what can go wrong" in a business relationship.
Since then, Walgreens has confirmed in a press release over the weekend that its relationship with the startup company is over. Theranos manufacturers a device called Edison, which examines blood samples to identify dozens of conditions, such as cholesterol and cancer.
Theranos' technology was available to Walgreens' clients in 40 stores. However, Theranos' business was riddled with controversy dating back to 2014 when the Wall Street Journal reported only a small fraction of blood tests were conducted on the Edison machine with the rest being conducted on traditional lab machines.
The U.S. Food and Drug Administration (FDA) was not convinced Theranos' technology was ready for mass use given many quality control problems that could have led to inaccurate results for patients.
The New York Times reported earlier this year that federal regulators were even considering banning Theranos' senior executives from owning or operating any sort of laboratory for at least two years.
In its press release on Sunday, Walgreens confirmed it will no longer offer Theranos' services and technology at any of its stores.
"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 healthcare commercial market development officer.
Brooke Buchanan, Vice President of Communications at Theranos, released this statement:
"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."
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