No More Bloodshed: Walgreens Makes Peace with Consumers in Theranos Test-Tangle Saga

Walgreens Boots Alliance Inc WBA has reportedly reached a tentative settlement with consumers in Arizona and California who received blood tests from the now-defunct Theranos Inc and alleged that Walgreens Boots was aware of the fraud but turned a blind eye. 

Theranos was founded in 2003 by Elizabeth Holmes, then 19 years old, and raised over $700 million from venture capitalists and other investors.

Theranos' fraud business strategy was built on the premise of performing blood tests with proprietary technology that just required a pinprick in your finger and a tiny bit of blood.

The tests, according to Holmes, will be able to detect diseases such as cancer and high cholesterol. 

Also Read: Walgreens Settles Opioid Epidemic Lawsuit with San Francisco for $230M, Says It Does Not Admit Fault.

Lawyers representing the company and consumers have filed a notice with a federal judge in Arizona, stating that they have reached a settlement in principle, Bloomberg reported.

They anticipate submitting a request for court approval in approximately three weeks. The specific terms of the agreement were not disclosed in the filing made on Monday.

Earlier this month, U.S. District Judge David Campbell in Phoenix ordered the case to proceed to trial as he determined that there were factual issues that only a jury could resolve. 

The trial would focus on whether Walgreens knowingly partnered with Theranos, despite having reasonable suspicions that the startup's technology was ineffective. 

Last year, Theranos' founder and former CEO, Elizabeth Holmes, was convicted of fraud and received an 11 1/4-year sentence. Additionally, the company's former president, Ramesh "Sunny" Balwani, was found guilty by a jury and is currently serving a 13-year sentence.

Price Action: WBA shares are down 0.60% at $31.00 during the premarket session on the last check Tuesday.

Photo via Flickr