The drugstore chain Walgreens told Theranos to stop sending clinical lab tests to its Newark, California lab today. Walgreens has also decided to immediately suspend Theranos laboratory testing services at its store in Palo Alto, California. The decision, which will affect Theranos Wellness Centers located inside Walgreens, comes a day after a warning letter sent to Theranos was made public by the US Centers for Medicare and Medicaid Services.
"Walgreens informed Theranos that tests collected at 40 Theranos Wellness Centers located at stores in Arizona must be sent only to Theranos’ certified lab in the Phoenix area or to an accredited third-party lab for analysis," a Walgreens statement explains. "No patient samples will be sent to the Newark lab until all issues raised by CMS have been fully resolved."
"No patient samples will be sent to the Newark lab."
Theranos' Newark lab poses "immediate jeopardy to patient safety," CMS said in its letter. Surveyors who completed an inspection in December cited problems with the laboratory director, the technical supervisor, hematology, and the lab's analytic systems. Because the inspection report that prompted the letter has yet to be released, the details of these deficiencies remain uncertain. But the consequences for the blood testing startup that has been valued at $9 billion could be serious. If Theranos fails to provide CMS with "acceptable evidence of correction," the lab could lose its certification, which would effectively stop the lab from performing patient testing. The company may also be fined as much as $10,000 per day.
"We are currently in discussions about the next phase of our relationship," a Walgreens spokesperson told The Verge in an email on Tuesday, before the letter was released. Theranos operates 40 Wellness Centers at Walgreens locations in Arizona. The company also has a Wellness Center in a Walgreens Palo Alto store, but the listing for that particular center has been removed from Theranos' website.
"We are currently in discussions about the next phase of our relationship."
Theranos' Arizona lab wasn't impacted by CMS' findings, "and will continue to serve wellness centers," a spokesperson for Theranos told The Verge in an emailed statement. "We are open for business, confident in our technologies, and unwavering in our commitment to provide Arizonans with the care and service they deserve." Theranos has been given 10 calendar days to respond to CMS' letter.