Walgreens Jumps The Theranos Ship

The Theranos Lab controversy strikes again.

This time, the med-tech startup was informed by the Centers for Medicare and Medicaid Services (CMS) that it must cease sending clinical laboratory tests it receives through the Theranos Wellness Centers at Walgreens to its lab in Newark, California, for analysis.

Walgreens also informed the company that it is suspending Theranos laboratory services at its Palo Alto store, effective immediately, a press release from Walgreens stated on Thursday (Jan. 28).

“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. No patient samples will be sent to the Newark lab until all issues raised by CMS have been fully resolved,” the statement continued.

According to The Wall Street Journal, Walgreens cited “deficient practices” found by federal investigators, which “pose immediate jeopardy to patient health and safety,” as the reasoning behind its closure of the Theranos Wellness Center in Palo Alto.

Since news broke late last year questioning the company’s accuracy and honesty about its “breakthrough” blood-testing technology, Theranos has remained under a firestorm of scrutiny.

The Silicon Valley unicorn’s fall from grace serves as what MPD CEO Karen Webster called a “cautionary tale for payments’ innovators, the investors who throw money at them and the companies that look to identify and integrate innovation into their own organizations.”

In her column, titled “The Dangers Of Groupthink,” Webster warns of the implications of “permissionless” innovation and the perils of letting groupthink trump a healthy debate over the merits of an innovation and its true potential.

“I guess the moral of the story here is that just because a cool-sounding company gets a few million bucks from a storied VC firm in Silicon Valley with fancy-schmancy people on the board doesn’t automatically mean that it’s the next big thing,” Webster explained.

“Most importantly, when everyone says something is a sure thing and no one is disagreeing, that might be a good sign that groupthink is in action, and it’s time to really kick the tires, push back and ask some tough questions.”