Drug-store chain Walgreens (WBA) said late Sunday that it had terminated its ties to blood lab Theranos, punctuating a tumultuous period after the start-up's testing methods were called into question.
The retailer, part of Walgreens Boots Alliance, said it will no longer offer any services from the Palo Alto, Calif.-based firm at any of its stores and will close 40 dedicated Theranos Wellness Centers in Arizona.
Federal investigators are investigating Theranos after the Center for Medicare and Medicaid Services identified deficiencies in the company's testing processes, which had promised expeditious and comprehensive results using a fingerprick method.
“In light of the voiding of a number of test results, and as the Centers for Medicare and Medicaid Services has rejected Theranos’ plan of correction and considers sanctions, we have carefully considered our relationship with Theranos and believe it is in our customers’ best interests to terminate our partnership,” said Brad Fluegel, Walgreens senior vice president and chief health care commercial market development officer, in a statement.
The investigations include a criminal probe by the U.S. Justice Department and an investigation by the U.S. Securities and Exchange Commission.
Once valued at $9 billion, Theranos rocketed to prestige in Silicon Valley with its innovative approach and charismatic young founder, Elizabeth Holmes, who started the company when she dropped out of Stanford at 19.
CMS officials have suggested banning Holmes and her recently departed president, Sunny Balwani, for two years from any lab testing enterprise.
Theranos spokesperson Brooke Buchanan said late Sunday in a statement that it was "disappointed that Walgreens has chosen to terminate our relationship" but remains "fully committed to our mission to provide patients access to affordable health information and look forward to continuing to serve customers in Arizona and California through our independent retail locations."
Buchanan said: "Quality and safety are our top priorities and we are working closely with government officials to ensure that we not only comply with all federal regulations but exceed them."
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
