- A class action lawsuit filed in federal court Wednesday alleges Theranos misled consumers and engaged in deceptive advertising by falsely claiming results from its proprietary finger-prick blood testing were accurate.
- Brought against Theranos on behalf of an Arizona man, the suit seeks damages and an enjoinment on the company from engaging in further false advertising.
- According to reporting by The Wall Street Journal, Theranos recently told federal regulators it had taken the drastic step of voiding two years of test results, issuing tens of thousands of corrected and revised results.
The legal action only adds to Theranos' troubles, as potentially severe sanctions from the Centers of Medicare and Medicaid Services (CMS) still loom. CMS has told Theranos that founder Elizabeth Holmes could be potentially banned from the blood-testing business for two years. The certification of the company's Newark, California lab could also be revoked.
Additionally, the Security and Exchange Commission, along with the Department of Justice are looking into whether Theranos misled investors.
The Arizona man in the lawsuit, named only as M.P.B., bought a Theranos test at a Walgreens in Tempe, Arizona in December 2015. However, he would not have bought the test if he had known Theranos' testing methods and Edison device did not work as described by the company, the suit said.
Pointing to reports Theranos voided test results, along with information from CMS inspections of the Newark lab, the lawsuit claims Theranos misled consumers as to the true accuracy of its methods.
"As a result, tens of thousands of patients may have been given incorrect blood-test results, been subject to unnecessary or potentially harmful treatments, and/or been denied the opportunity to seek treatment for a treatable condition."
Theranos spokeswoman Brooke Buchanan said the lawsuit was "without merit" and that Theranos would "vigorously defend itself against these claims.”
Theranos had also said its technology would allow it to analyze blood samples at the point-of-care, reducing costs and improving speed. Its partnership with Walgreens was the cornerstone of that strategy, although federal regulators made Theranos consolidate testing to two laboratories. But Walgreens never fully vetted Theranos' technology, hoping to quickly sign a deal with Holmes, according to The Wall Street Journal.
The Walgreens deal bestowed legitimacy on Theranos' tests and gave the company access to thousands of customers, including the Arizona man in the lawsuit. Yet it appears Walgreens sacrificed full due diligence in order to partner with what was then a heralded Silicon Valley unicorn.
McCuneWright, a California law firm, filed the complaint in U.S. District Court for the Northern District of California.