Theranos voided one in every 10 test results conducted on behalf of Walgreens
DEERFIELD, Ill. — One day before Walgreens Boots Alliance severed its relationship with the blood-testing laboratory Theranos in June 2016, Theranos acknowledged to Walgreens executives that more than 10% of the test reports — totaling 31,000 test reports altogether — that were provided to Walgreens customers who used Theranos' services had to be voided. "[Theranos] stated that 31,000 Walgreens customers had received voided test reports, which was 11.3% of total Walgreens customers," Walgreens alleged in court papers filed Tuesday.
According to Walgreens, Theranos broke each of the promises made to the Chicago-based retail pharmacy operator, which had entered into an exclusive arrangement with Theranos in July, 2010, and which was later amended in June, 2012. The 2012 agreement provided the framework under which Theranos Wellness Centers could operate inside Walgreens' stores. By the fall of 2015, Theranos Wellness Centers were located in 41 Walgreens locations, one in Palo Alto and the remaining 40 in Arizona.
As outlined in the 52-page complaint, which excluded mutually-agreed upon redactions per a Nov. 8 court order, Walgreens repeatedly requested assurances that Theranos was adequately addressing concerns from both regulators — namely CMS — and reports in the press criticizing Theranos' blood-testing capabilities, most notably in The Wall Street Journal.
However, Theranos dodged many of those requests, Walgreens claimed, and ultimately turned the tables when it accused the retailer for breach of contract for not continuing to expand Theranos' lab offerings through Walgreens retail outlets even after many of the regulatory concerns came to light.
“We are disappointed that Walgreens filed this lawsuit," Theranos stated in a release following Walgreens' $140 million lawsuit against the company. "Over the years, Walgreens consistently failed to meet its commitments to Theranos. Through its mishandling of our partnership and now this lawsuit, Walgreens has caused Theranos and its investors significant harm."
Theranos charges instead that Walgreens had breached its contract for not expanding the footprint of its blood-testing services. Though, had Walgreens done so, it would have happened even as health regulators were actively scrutinizing Theranos' blood-testing capabilities and instituting restrictions after determining the tests were insufficient.
"[The 2012] agreement was the last agreement entered into between the parties, and no agreement on the expansion of the Theranos Wellness Centers beyond the pilot stores ever was finalized," Walgreens asserted. "Nor were any additional locations opened."