Elizabeth Holmes’€™s Theranos Nightmare Just Got Even Worse

Somehow, things just keep getting worse for Theranos. Elizabeth Holmes’s flailing blood-testing start-up, which is already facing scrutiny from regulators and a federal criminal investigation, just got hit with a class-action lawsuit, too.

Fortune reports that the suit, which was filed on Wednesday in Northern California by an Arizona man, accuses Theranos of consumer fraud. It argues that the start-up, which boasts a $9 billion valuation, falsely marketed its diagnostic testing technology, Edison, to consumers. The legal blow comes roughly one week after Theranos lost its last leg to stand on when the start-up admitted to voiding two yearsâ worth of blood tests due to inaccuracies.

The class-action suit claims that as a result of the voided blood tests, “tens of thousands of patients may have been given incorrect blood-test results, been subject to unnecessary or potentially harmful treatments,” Fortune reports.

For the suit to move forward as a class action, a judge has to determine if there are enough Theranos customers in a similar situation to the plaintiffâ who is identified as M.P.B.â and show damages. In a statement to the Verge, Theranos spokeswoman Brooke Buchanan said, ” The lawsuit filed today against Theranos is without merit. The company will vigorously defend itself against these claims.”

Since its founding, Holmes “the world’s youngest self-made female billionaire (at least on paper)” has touted Thermos’s technology as superior to its rivals, Laboratory Corporation of America and Quest Diagnostics. Holmes has said its innovative technology is capable of performing hundreds of diagnostic tests with just a few drops of blood. But in the fall of last year, troubles for the young company began when its technology came under regulatory scrutiny. Concerns about Theranos came to a head in January when U.S. health inspectors identified a number of quality-control failures in a Theranos lab in Newark, California. The discovery prompted regulators to consider banning Holmes from owning and operating a testing lab for two years.

The company attempted to repair its image with changes to its operation and board, and assurances that the testing deficiencies were limited to its Newark lab, but that defense, too, collapsed last week when Theranos admitted to having voided thousands of tests, revealing that its failures were much more widespread than previously thought. On Wednesday, The Wall Street Journal reported that Walgreens didn’t verify whether or not Thermos’s Edison technology actually worked before it inked a deal with the diagnostic start-up in 2013, which entailed opening Theranos testing clinics in dozens of Walgreens locations. Now, with a class-action suit against the company in the works, a P.R. debacle with Walgreens could be the least of Thermos’s worries.

Source: www.vanityfair.com www.vanityfair.com

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