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Walgreens' failed deal with Theranos

Many Texas residents shop at Walgreens for prescription medications and other over-the-counter products. In 2010, the drug store chain signed a deal with a medical technology company called Theranos and set up 'Wellness Centers" at 40 different locations. Using Theranos technology, the wellness centers offered customers simple blood tests that only required a finger prick.

After questions were raised about the blood tests' accuracy, Walgreens severed ties with Theranos. Over the last year, Theranos has been the target of several government investigations and lawsuits. The founder of Theranos was also barred from operating a lab for two years by the Centers for Medicare & Medicaid Services. Now, Walgreens and Theranos are involved in contract disputes over their defunct business deal.

On Nov. 8, Walgreens filed a $140 million breach of contract complaint against Theranos in the U.S. District Court for the District of Delaware. The complaint was sealed because of non-disclosure agreements, so there has not been very much information about the allegations released to the public. Anonymous sources told the Wall Street Journal that Walgreens is accusing Theranos of offering misleading information about the state of its technology when the two companies made their agreement to work together.

When two companies sign a contract to work together on a new project, the agreement may include provisions about what happens if one company fails to live up to its end of the deal. In many cases, a contract dispute will arise if a project is unsuccessful. Business law attorneys might help their clients to negotiate a settlement and thus avoid protracted litigation.

Source: Fortune, "Walgreens Sues Theranos for $140 Million for Breach of Contract," Kia Kokalitcheva, Nov. 8, 2016

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