US pharmacy chain halts some Theranos diagnostic testing

US pharmacy chain Walgreens has informed embattled diagnostics startup, Theranos, that it is to stop sending patient tests to its California laboratory following the US Centers for Medicare and Medicaid Services' warning letter, mandating that the company clean up its act, and describing the lab as an "immediate jeopardy to patient safety". Walgreens added that it is in discussions with Thernaos about "the next phase of our relationship". Currently Walgreens has 40 Theranos Wellness Centers integrated into its locations across America. Theranos' second laboratory in Arizona is unaffected by the CMS' findings and will continue to offer diagnostics tests. 

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."