Arizona Makes Theranos Pay Following the Public Embarrassment of Its Governor

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Embattled former blood-testing startup Theranos settled one of its many legal battles today. The dangerously incompetent corporation has agreed to give all customers in Arizona who used its product a full refund. The revelations that Theranos’ devices didn’t work as advertised was a major blow to Arizona’s regulation slashing governor who fell for the company’s claims hook, line, and sinker.


For a company that is believed to have raised $800 million, the $4.65 million settlement with Arizona’s Attorney General Mark Brnovich might seem like a drop in the bucket. But those funds have reportedly dwindled to just $200 million, and a $140 million lawsuit from its former partner Walgreens still hangs over its head.

Theranos social and political capital is also basically worthless now. Founder and CEO Elizabeth Holmes once rubbed shoulders with the likes of Bill Clinton and Henry Kissinger, but these days she’d be lucky to get a meeting with Grover Norquist. Holmes was believed to be another 19-year-old college dropout disrupter that was going to change the world with her Silicon Valley startup. But following an investigation by the Wall Street Journal, it was revealed that the company’s “Edison” blood-testing devices weren’t very reliable. The hammer of the gods proceeded to come down from investors, the U.S. government, partners and the public.

One of the high-profile people burned by Theranos bullshit was Arizona Governor Doug Ducey, a crusading anti-regulation conservative. Ducey is the type of politician who thinks we should all just cook up our own cancer treatments in the garage and get government out of our goddamn business.

In Ducey, Holmes saw an easy mark for her mission to remove barriers to entry in the marketplace and buttered up Arizona lawmakers with talk of creating “free-market competition to drive prices down and increase transparency.” Specifically, she wanted to remove requirements for a doctor’s order to get a blood test. Despite the protestations from the Arizona Medical Association, the bill that removed those requirements easily passed. Arizona House Speaker David Gowan reportedly told Holmes when she first came to the state to lobby politicians, “You’re talking to free-market-minded people here, so you’re talking in the right tone.” Governor Ducey championed the passage of the bill as one step in his plan destroy regulations.


Now, Ducey has to live with the fact that the absence of regulation put his citizens in danger. Today, Arizona pulled every drop of blood out of Theranos’ corpse that it could. Attorney General Brnovich told Bloomberg “They said approximately 10½ percent were inaccurate, and it didn’t matter.” He explained that he wanted a refund for all customers to “send a message not only to Theranos but to other companies that if they are going to violate Arizona consumer protection law we’re going to go after them, we’re going to hit them hard.”


Among the other pending legal troubles that Theranos faces are civil suits with individuals like an Arizona resident who claims that the company’s faulty tests resulted in his heart problems going undetected and he subsequently had a cardiac arrest.

With a seriously diminished staff and an empty bank account for Holmes, Theranos is still pushing ahead with the development of a new device called miniLab. Holmes described it as “the beginning of the next phase of the company.” The device will allegedly test blood.



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