After nearly seven (7) years of litigation, Walgreens Boots Alliance has reached a $44 million settlement with customers who purchased blood draws from one of the company’s more than 40 Theranos Wellness Centers across Arizona and California. In 2016, consumers filed a class-action lawsuit accusing Walgreens and Theranos of fraud and medical battery, claiming they purchased the test under false pretenses.
Theranos, which is now known as one of the most well-known fraudulent medtech companies in the world, was once valued at $9 billion and touted its flagship Edison device as the future of diagnostics, using just a finger-prick of blood to run a battery of tests. Walgreens capitalized on the innovation, paying Theranos $140 million to open wellness centers in their stores that utilized the device. However, there was a problem… the device did not actually work. So, I think it is fair to say Walgreens has since regretted that decision.
Now, after years of back and forth, and subject to court approval, the settlement agreement states that the lawsuit plaintiffs will receive double the cost of their Theranos tests, plus an additional $10 base payment. Members of a Walgreens Edison subclass will receive an added $700 to $1,000 for medical battery claims, according to a plaintiff-filed memorandum. A tentative deal was reached with the plaintiffs in May after Phoenix US District judge David Campbell ordered the case to go to trial.
The plaintiffs also reached a settlement with former Theranos COO Ramesh “Sunny” Balwani; however, could not come to an agreement with Elizabeth Holmes , the company’s former CEO. Both Balwani and Holmes were convicted of fraud last year (in 2022), receiving a sentence of 13 and 11 years in prison, respectively.
The fact that plaintiffs were unable to come to a settlement agreement with Holmes is unsurprising to an MD+DI editor, as only months ago multiple news sources reported the founder said she was unable to pay $250 a month for her share of $452 million in restitution to her victims once released from prison, citing “limited financial resources.”
At Theranos’ peak, Holmes’ net worth was valued at $4.5 billion. However, in June of 2023, Forbes reduced that estimate to zero.
REFERENCE: MD+DI (Medical Device and Diagnostic Industry); 12 SEP 2023; Katie Hobbins