Theranos just agreed to refund 175,000 people in Arizona who took its tests

Anyone who paid to take one of Theranos’s blood tests in Arizona will be receiving a refund from the company, Arizona’s attorney general said on Tuesday. 

In total, Theranos will pay the state $US4.65 million to refund the tests, and will also pay $US225,000 to cover civil penalties and attorneys’ fees. 

“Between 2013 and 2016, Theranos sold approximately 1.5 million blood tests to more than 175,000 Arizonans,” the attorney general said in a news release. “Each customer will now be reimbursed the full amount the customer paid for testing regardless of whether the results were voided or corrected.”

It’s the second settlement the embattled blood-testing company has made this week. On Monday, Theranos said that it had settled up with Centres for Medicare and Medicaid Services, the government agency responsible for regulating blood-testing labs.

As part of the settlement, Theranos has to pay $US30,000, and the company won’t be able to own or operate a clinical lab within the next two years. In return, the CMS is no longer revoking Theranos’s CLIA certification, which is needed to run a blood-testing lab. 

In January, The Wall Street Journal reported that Theranos had failed a CMS inspection of its Arizona lab,  just a few days before Theranos decided to shut down all of its clinical labs on October 5. A year earlier, Theranos’s Northern California lab also failed a lab inspection

In October 2016, Theranos pivoted to focus solely on developing its technology instead of simultaneously operating clinical laboratories. The end goal? Getting its miniLab machine (which only requires a small amount of blood to function) in places that have difficulties sending full blood samples to a traditional, full-blown clinical lab operation. 

The technology debuted in August as part of Theranos’ attempt to be what CEO Elizabeth Holmes called a “decentralized” lab, meaning the test could be processed without needing to be shipped back to a brick-and-mortar lab.

Theranos’ saga came into the spotlight in October 2015 after The Wall Street Journal published an investigation that questioned the accuracy of Theranos’ blood test. 

The company still faces lawsuits from investors, patients, and its once partner Walgreens, which ended its relationship with Theranos in June 2016 and is accusing Theranos of breaching its contract. Theranos has said it will “respond vigorously to Walgreens’ unfounded allegations.”

Financially, lawsuits like the one settled with Arizona can pack a punch. The Journal reported that Theranos had about $US200 million in cash by the end of 2016, roughly a quarter of the money the company raised. The Journal also reported that Holmes now owes the company $US25 million, and the company is offering investors additional shares if they promise not to sue. 

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