Walgreens partners with a new blood-testing firm
Original post on: Crain’s Chicago Business
By: Brigid Sweeney
The Deerfield, Ill.-based pharmacy giant is partnering with LabCorp to open 600 blood-testing sites in its drugstores over the next four years.
Sixteen months after Walgreens Boots Alliance concluded a disastrous relationship with Theranos, the now-defunct Silicon Valley blood-testing company, the pharmacy giant has linked up with LabCorp, one of the world’s largest clinical laboratory operators.
Walgreens will partner with LabCorp to open at least 600 blood-draw locations at Walgreens stores over the next four years. It’s a major expansion from the 17 pilot locations that are open in Walgreens stores today in Deerfield (near company headquarters), Florida, Colorado and North Carolina.
Walgreens has been interested in adding blood-draw capabilities to its pharmacies for years. The pharmacy’s network of 9,800 stores can offer convenient locations for patients who don’t want to trek to the hospital or doctor’s office. Moreover, the ability to collect blood samples for diagnostic testing could add significant revenue that would help offset the margin pressures that Walgreens’ prescription drug business has long faced.
With those same goals in mind, Walgreens executives teamed up in 2010 with Theranos, after hearing a pitch from founder and CEO Elizabeth Holmes and COO Sunny Balwani. Theranos, then a still-under-the-radar startup founded by Holmes, a Stanford University dropout, purported to have technology that allowed it to complete diagnostic testing by collecting just a finger-prick of blood.
The two companies began rolling out Theranos Wellness Centers inside Walgreens stores in Arizona in 2013. Though they ultimately opened 40 centers, the companies had a vision of many more. Walgreens also invested $140 million in Theranos.
We all know the story from there. After a blockbuster 2015 Wall Street Journal article first cast doubt on the accuracy of Theranos’ technology, the company fell apart. Holmes and Balwani were indicted this summer on charges of bilking investors out of hundreds of millions of dollars, and the company shut down for good in early September. Walgreens settled its $140 million lawsuit against Theranos for less than $30 million in June 2017.
Now it’s ready to try again with a far larger—and market-tested—company. Known formally as Laboratory Corp. of America, the Burlington, N.C.-based company calls itself the world’s leading lab diagnostics provider and posted revenue of $10.21 billion last year.
“LabCorp’s strong partnership on this joint initiative, coupled with the enthusiastic consumer feedback we’ve received, allows us to undertake an exciting expansion of our collaboration together,” Stefano Pessina, Walgreens CEO, said in a statement. “This reflects our commitment to transform our stores into neighborhood health destinations.”
In the same statement announcing the partnership yesterday, Walgreens said it also was “exploring novel approaches to clinical research,” though it did not elaborate. A spokesman said Patrick Carroll, Walgreens chief medical officer, was not immediately available for an interview.