to handle the federal investigations. Another big law firm,
WilmerHale, took their place. A month after Holmes’s AACC
appearance, Heather King returned to Boies Schiller as a partner
based in its Palo Alto office. Boies left the Theranos board a few
months later.
Walgreens, which had sunk a total of $140 million into Theranos,
filed its own lawsuit against the company, accusing it of failing to meet
the “most basic quality standards and legal requirements” of the
companies’ contract. “The fundamental premise of the parties’
contract—like any endeavor involving human health—was to help
people, and not to harm them,” the drugstore chain wrote in its
complaint.
After initially attempting to appeal the CMS ban, Holmes resigned
herself to the inevitable and closed the California lab as well as the
company’s second lab in Arizona, which had used only commercial
analyzers. During an inspection of the Arizona facility days before it
was shuttered, CMS found a multitude of problems there too.
Under a settlement with Arizona’s attorney general, Theranos
subsequently agreed to pay $4.65 million into a state fund that
reimbursed the 76,217 Arizonans who ordered blood tests from the
company.
The number of test results Theranos voided or corrected in
California and Arizona eventually reached nearly 1 million. The harm
done to patients from all those faulty tests is hard to determine. Ten
patients have filed lawsuits alleging consumer fraud and medical
battery. One of them alleges that Theranos’s blood tests failed to detect
his heart disease, leading him to suffer a preventable heart attack. The
suits have been consolidated into a putative class action in federal
court in Arizona. Whether the plaintiffs are able to prove injury in
court remains to be seen.
One thing is certain: the chances that people would have died from
missed diagnoses or wrong medical treatments would have risen
exponentially if the company had expanded its blood-testing services
to Walgreens’s 8,134 other U.S. stores as it was on the cusp of doing
when Pathology Blawg’s Adam Clapper reached out to me.