Walgreens Suspends Theranos California Lab After U.S. Report

  • Blood-testing startup still works with Walgreens in Arizona
  • Move follows regulator's letter citing shortcomings at lab

Walgreens Boots Alliance Inc. said it will stop sending lab tests to Theranos Inc.’s Newark, California, facility after U.S. regulators found severe deficiencies at the lab.

The companies have been working together to provide lab testing to consumers through a handful of Walgreens stores in California and Arizona. Theranos’s lab in Arizona, where it does the majority of its analysis, isn’t affected. Shortcomings at the California lab jeopardized the health and safety of patients, the Centers for Medicare and Medicaid Services said in a letter to Theranos made public on Wednesday.

“No patient samples will be sent to the Newark lab until all issues raised by CMS have been fully resolved,” Walgreens said Thursday.

The partnership, which is with the Walgreens unit of the drugstore operator, has been the most public evidence of Theranos’s promise of providing quicker and cheaper lab testing, using its proprietary technology. Walgreens said that while it’s halting testing at a store in Palo Alto, California, testing will continue at 40 stores in Arizona.

Testing Site Closed

In Palo Alto, a sheet of paper was posted on the frosted window of the shuttered testing site, telling would-be patients it was closed “until further notice.” A woman in a Theranos uniform declined to talk with a reporter before leaving.

“We look forward to continuing to work with Walgreens to provide access to reliable, high quality, and low-cost lab testing services," Theranos spokeswoman Brooke Buchanan said in an e-mail. “Our CLIA-certified Arizona lab, which handles approximately 95 percent of our wellness center lab tests, is not impacted by this week’s findings and will continue to serve wellness centers."

The CLIA program sets and enforces government laboratory testing standards. Walgreens spokesman Michael Polzin declined to elaborate beyond his company’s statement.

Other partners also have distanced themselves from Theranos, which is run by founder Elizabeth Holmes. Theranos had asked the Cleveland Clinic, a prominent research hospital, to run a study comparing Theranos’s technology to traditional blood draw, Holmes has said.

The Cleveland Clinic, however, said Wednesday that it had started no such program. 

“The Cleveland Clinic has not begun any work related to the study at this time,” spokeswoman Eileen Sheil said Wednesday. “We are not consultants, nor do we have any financial investments in the company.”

Hospital Chain

Intermountain Healthcare, a 22-hospital system based in Utah, said in October that it was planning to run a pilot program with Theranos technology, to be used alongside traditional blood testing for comparison.

Intermountain hasn’t used Theranos’s technology yet, according to spokesman Daron Cowley. “We have not yet scheduled a possible pilot” study, Cowley said Wednesday in an e-mail. “We’ll certainly evaluate this and all information before beginning a pilot.”

CMS said in its letter that Theranos violated at least five U.S. regulations for clinical laboratories that do things like test blood levels or assess disease. Theranos said Wednesday that the government inspection, conducted in November, doesn’t reflect the current condition of its lab. The company already has fixed some of the problems identified by regulators and plans to submit a plan to address the rest “within days,” Buchanan said Wednesday.

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