This has been quit a story that has been developing for years with the company Walgreens is now going to business with, Theranos. This also stands to be a bit disruption to how we perform and get lab tests. LabCorp and Quest I’m sure have been watching it closer than anyone else as they are the ones who stand to be impacted by a new process here. Elizabeth Holmes, the CEO dropped out of Stanford to create her company at 19 and she’s 29 now so we are looking at 10 yeas of development. She’s an engineer and has the talent. Prior to starting her company while in high school she started a business to distribute C++ sharp software to Asian universities. She was spending all her time talking to VCs and was not making the classes so she took the break.
Anyway back on track with the story the company makes inexpensive and efficient lab tests and I looked at the website and read quite a bit of what was on there. The first location will be a Walgreen store in Palo Alto. In addition there will be a lab on the east coast in Newark. The economic development folks in Newark said this was the most secretive company they had ever worked with so lips have been sealed and due to the nature of the business I can see why.
With a few ounces of blood, hundreds of diseases can be diagnosed in a very short time. In 2010 they raised $45 million so there was serious attention here and nice compared to seeing VC money going like that out on games. Theranos actually selected Walgreens as a partner and with all the stores they have and are buying up, it was the biggest way to get the product out there I would guess. They just bought yet another chain I posted earlier today.
I read somewhere that Larry Ellison was on the board as well as some pretty other high ranking business executives so she’s connected well. You can see who’s on the board here. The Wellness Centers will be inside the Walgreen stores so I am guessing it might resemble something like the retails clinics as far as having an area and maybe smaller in size, and might be right inside the clinics in stores where they have them. With what they are doing you can obviously see the military connection with a member of the DOD on the board as well. The president and CEO is a computer scientist so again this is a focused technology company and no digital illiterates in the key positions here.
The work appears to be done for integration with medical records as well with electronic results available from anywhere with an internet connection. The site has a place where doctors can sign up and they can send patients to Walgreens where the Theranos wellness centers will be located.
This is the kicker and the huge advantage here is the price…50% less than what Medicare pays, so there would be a rush on this I would think as I don’t any insurer or Medicare or Medicaid is going to complain in this area.
“We’re committed to making lab testing more accessible to everyone. That means pricing our tests at dramatically low rates. We can accept major insurance carriers as well as Medicare and Medicaid. And if you’re uninsured, we offer you the same discounted prices we offer everyone else. Because a test should cost the same, no matter who you are.”
Here’s a couple screenshot samples of what tests will cost:
Glucose test for example $2.70, anyone can afford that. The allowable error margins are less than 10%. This also stands to save Medicare a ton of money if you have not figured that one out yet if the prices are half and stay there.
I think the company is going to make a big stir and again how it impacts the current giants in the business will be very interesting. Right now it has to get started and running. Stay tuned as I’ll update this one as more information becomes available and I’m sure once the Palo Alto store opens up on Monday we will be hearing a lot more. BD
Theranos, Inc. and Walgreens (NYSE: WAG) (Nasdaq: WAG) today announced a long-term partnership to bring access to Theranos' new lab testing service through Walgreens pharmacies nationwide. As the service becomes available through Theranos Wellness Centers inside Walgreens stores, consumers will be able to access less invasive and more affordable clinician-directed lab testing, from a blood sample as small as a few drops, or 1/1,000 the size of a typical blood draw. The samples are either taken from a tiny finger stick or a micro-sample taken from traditional methods, eliminating the need for larger needles and numerous vials of blood required for most diagnostic lab testing.
Theranos and Walgreens are taking the first step in making this service available to consumers with the first Theranos Wellness Center location opening this month at Walgreens drugstore at 300 University Ave. in Palo Alto, Calif., in the heart of Silicon Valley. The companies plan to offer the service at Walgreens locations nationwide.
For the first time, Theranos is introducing CLIA-certified laboratory services with the ability to run its tests on micro-samples. Theranos' proprietary laboratory infrastructure minimizes human error through extensive automation to produce high quality results. Test results are available to physicians in a matter of hours, enabling fast diagnoses to help informed treatment choices. Theranos tests are low cost -- always 50 percent of Medicare reimbursement rates or less -- and are reimbursed by major insurance carriers, Medicare, and Medicaid. Developed to be accessible to everyone, Theranos tests cost the same amount for everyone, regardless of insurance plan or whether they are uninsured.