Theranos settles lawsuit brought by Walgreens over blood tests

Theranos Inc. Chief Executive Elizabeth Holmes in Philadelphia on Oct. 5, 2015.
(Gilbert Carrasquillo/Getty Images)

Theranos Inc., the once highflying blood-testing firm, said Tuesday it settled a lawsuit filed against the company by the drugstore chain Walgreens and its parent, Walgreens Boots Alliance Inc.

Terms of the settlement were not disclosed, but Theranos said there was “no finding or implication of liability” and Walgreens’ lawsuit will be dismissed.

Theranos, led by founder and Chief Executive Elizabeth Holmes, had developed a novel testing technology that made blood drawing easier for patients and at costs below commercial-lab prices.


Many of the Palo Alto company’s tests required only droplets of blood from finger pricks, as opposed to obtaining a vial of blood, and used Theranos’ proprietary testing technology that enabled the tests to cover dozens of medical conditions.

Walgreens had entered a partnership to make the tests available at 40 Walgreens stores in Arizona, as well as one in Palo Alto.

But starting in late 2015, questions mounted about the tests’ accuracy and whether Theranos’ technology was flawed. Health regulators also found Theranos out of compliance with certain federal lab requirements.

Walgreens then terminated its partnership with Theranos and in November filed its lawsuit that alleged breach of contract.

Federal regulators a year ago banned Holmes from owning or running a medical lab for two years. In October, Theranos shut down its labs, laid off 340 employees — or more than 40% of its workforce — and shifted its focus to developing a portable blood-testing device called the MiniLab.

In April, Theranos reached a settlement with the federal Centers for Medicare and Medicaid Services, which regulate blood-testing labs.


That same month, Theranos agreed to return $4.65 million to Arizona consumers who paid to take one of Theranos’ tests, along with $200,000 in civil penalties paid to the Arizona attorney general’s office.

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