Theranos has received a letter of warning from Walgreens, asking the former to reach a quick resolution to their laboratory issues. The drug retailer has given them a 30-day deadline to clean up their act, else be prepared to lose their biggest retail-space partner.
Walgreens Boots Alliance, the largest drug retailing chain in the US, runs more than 40 Theranos wellness centers out of their Arizona and California stores, where the citizens can get their blood medically tested. According to Fortune, the issues began when the US Centers for Medicare & Medicaid Services sent a letter highlighting some violations at the Theranos Northern California lab, which "pose immediate jeopardy to patient health and safety."
The malpractices included flawed blood-testing methods, inaccurate reports and three specific instances related to lab personnel. By way of defense, Theranos has stated that 95% of Walgreens' wellness enter lab tests are run from the Arizona lab, which is not indicted by the federal authorities. The Arizona hubs were created as a pilot project between the partners for which there are no current plans of expansion, as confirmed by Walgreens, says Business Insider.
Theranos had exploded into the scene with their revolutionary methods of medical tests. They had pushed the process, saying only single drops of blood would suffice for screening, something that fell largely short of its promises. Instead, the medical-testing servicers got slammed for their "deficient practices" leading to inaccurate results. So much so that the FDA even went on to tell them to ensure they perform at least one screening: the Herpes test.
Engadget reports that Walgreens has already started their process of distancing themselves from their partner. They have shut down the Palo Alto wellness center and plan to re-route all the Theranos-branded lab tests to third parties. The drug retail giant knows exactly how these consequences can damage the image of their business. Once a drug company gets a bad name, it takes years to get back on their feet, if at all.
Theranos had assumed a very casual approach regarding the negative reports before it received the formal notice from the government authorities. Now, with Walgreens threatening to cut off all ties, it puts them in quite a spot. So unless the company acts quickly and clears its name, the startup will lose one of its biggest retail spaces that had built up its customer base. Both parties were not available for comment.
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