Walgreens to pay $44 million to customers who bought faulty Theranos blood tests

Theranos, Walgreens, blood test, fraud, settlement, lawsuit

Walgreens has reached a settlement in a long-running class-action case related to patients who underwent fraudulent blood tests provided by the now-defunct Theranos at Walgreens stores in California and Arizona. According to court documents filed recently in an Arizona district court, Walgreens has agreed to pay $44 million into a non-reversionary settlement fund. Once court fees and administrative costs are deducted, eligible plaintiffs will receive a base payment of $10 each, in addition to reimbursement for double the cost of the original Theranos tests they received between the fall of 2013 and mid-2016.

A subgroup of plaintiffs who had undergone “tiny” blood draws at the Walgreens Theranos Wellness Centers between November 2013 and March 2015 will receive an extra $1,000 each to settle claims of battery and medical battery against the retail chain.

Notably, these payouts will deduct any previous reimbursements the plaintiffs received from Theranos in a 2017 consent decree with the Arizona attorney general’s office, where Theranos agreed to pay $4.65 million to cover the costs of its blood tests purchased by Arizonans.

While Walgreens has agreed to the settlement, it has not admitted any wrongdoing in the case. According to the court filing, Walgreens “denies and continues to deny all allegations of wrongdoing or liability, and contends that neither the plaintiffs nor the class members are entitled to relief from Walgreens.”

The class-action lawsuit dates back to 2016 when evidence emerged that Theranos’ technology could not accurately conduct the various tests it claimed to perform with just a few drops of blood. The lawsuit named Walgreens and Theranos as defendants, along with Theranos’ CEO and founder Elizabeth Holmes and Chief Operating Officer and President Ramesh “Sunny” Balwani. All were accused of aggressively promoting Theranos’ tests while concealing information about their unreliability.

As part of the settlement, the plaintiffs have also reached an agreement with Balwani. Balwani had filed claims against Theranos’ remaining assets, seeking repayment for litigation costs and his equity interest in the company. Since the estate holding those assets cannot cover all the claims against it, including Walgreens’, and because Balwani stated that he couldn’t pay any charges due to substantial debt, the class members agreed to release their claims against him in exchange for his release of claims against the Theranos estate.

However, the plaintiffs were unable to reach a settlement with Elizabeth Holmes, and they intend to ask the court to dismiss their claims against her without prejudice, allowing class members to pursue individual claims against her if they choose to do so. Holmes reportedly lacks the personal resources to contribute to a settlement or pay any potential judgment against her.

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