Walgreens claims that the blood-testing firm voided or corrected 31,000 test reports.

Nancy Crotti

Walgreens claims that Theranos "voided and/or corrected tens of thousands of tests" performed on Walgreens customers without telling the drugstore chain it was doing so, according to a partially redacted legal filing.

The $140 million breach-of-contract lawsuit, filed last week in U.S. District Court in Delaware, also claims that the once-vaunted blood-testing company repeatedly refused to provide information to Walgreens, even after reports containing that information had been published in the media.

In response to Walgreens's repeated attempts to learn how many test reports had been voided, Theranos on June 11, 2016 revealed the number to be 31,000. Walgreens terminated its agreement with Theranos the following day.

Theranos and its founder and CEO Elizabeth Holmes once touted a vision of reliable, fast finger prick blood tests for the masses. The potential was enticing enough that Walgreens forged a strong business partnership with Theranos, allowing the company to set up blood testing labs in 40 of its Arizona drugstores.

But things started to unravel for Theranos in October 2015 after a Wall Street Journal exposé called into question the accuracy of Theranos's tests.

The Centers for Medicare and Medicaid Services (CMS) found numerous deficiencies at Theranos' Newark, CA, lab. CMS imposed sanctions on the company in July 2016, demanding the Newark lab's and banning Holmes from the industry for two years. Last month, Theranos announced the shuttering of its clinical labs and Theranos Wellness Centers--a move affecting about 340 workers in Arizona, California, and Pennsylvania.

After Walgreens filed the suit to recover its investment in Theranos, the blood-testing firm said it would "vigorously" respond to what it called "unfounded allegations," according to a report by the Associated Press.

Neither Theranos nor Walgreens responded to a request for comment on the public release of the redacted lawsuit complaint.

The suit further states that Theranos told Walgreens in March 2010 that it had "proprietary, patented technology" that had been "comprehensively validated over the course of the last seven years by 10 of the 15 largest pharmaceutical companies." Theranos also told Walgreens that the technology had been used by "numerous current and past clients, including these same pharmaceutical companies, mid-sized bio-pharma companies, prominent research institutions, and U.S. and foreign health and military organizations.

Theranos also allegedly told Walgreens that its proprietary blood-testing technology, later dubbed "Edison," could perform general chemistry panels and standard blood tests, influenza and fertility tests, using a single drop of blood. Theranos also allegedly told Walgreens that its tests were validated under FDA guidelines and that its labs were "CLIA-certified."

Walgreens also claims that a team at Johns Hopkins University declared Theranos' technology "novel and sound" and that it could "accurately run a wide range of routine and special assays." These statements were based on proprietary testing data that Theranos said it had provided to the Johns Hopkins team, who also noted that one of the "[s]pecial strengths of the technology" was "[a]ccuracy," according to the lawsuit. 

Theranos told Walgreens its device had been validated by drug companies and researchers at Johns Hopkins University, according to the complaint. Hopkins researchers first reviewed data from the device at an April 2010 meeting, a year earlier than previously known, the filing said. People involved in that meeting later told WSJ that Hopkins researchers never actually tested one of Theranos's devices.People present at that meeting later told the Wall Street Journal that "Hopkins researchers never actually tested one of Theranos's devices," the newspaper reported.

Theranos opened its pilot location in 2013 in a Walgreens store in Palo Alto, CA, where Theranos is based. By the fall of 2015, Theranos Wellness Centers were operating in 40 additional Walgreens stores, all in Arizona.

Walgreens claims that Theranos repeatedly failed to respond to the drugstore chain's requests for information, including details of a CLIA recertification and complaint survey of Theranos' Newark laboratory and a state inspection of its Arizona lab.

On June 11, 2016, a Theranos employee told Walgreens that Theranos had been aware since September 2015 of quality issues with its testing, the lawsuit says. The employee further told Walgreens that Theranos began voiding test reports and/or issuing corrected reports in November 2015 and 31,000, or 11.3%, of Walgreens customers had received voided test reports.

Instead of finger prick blood tests for the masses, Theranos is now focusing on a technology that could very well be sold to health providers: a tabletop miniLab,Holmes announced in an open letter posted on the company's website.

Nancy Crotti is a contributor to Qmed.

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[Image courtesy of Stuart Miles on Freedigitalphotos.net]