Theranos faces consumer fraud lawsuit

Palo Alto, Calif.-based blood-testing startup Theranos has been hit with a lawsuit designated for class action status, brought by the individuals who paid for tests in 2014 and 2015 that the company recalled last week.  

The lawsuit was filed by Redlands, Calif.-based law firm McCuneWright in the U.S. District Court for Northern California. It was filed on behalf of an unnamed man from Arizona who went by the initials M.P.B., according to USA Today.

The law firm provided USA Today with the complaint: "As a result [of the newly voided results], tens of thousands of patients may have been given incorrect blood-test results, been subject to unnecessary or potentially harmful treatments, and/or been denied the opportunity to seek treatment for a treatable condition," it reads. "Plaintiff M.P.B., for himself, and all others similarly situated, brings this action for damages, including reimbursement of the purchase price of the tests as well as an order enjoining Theranos from engaging in further deceptive advertisements."

The company voided the two years of test results conducted on its proprietary finger prick testing device, nicknamed Edison. The move was part of Theranos' strategy to take corrective measures following a CMS investigation that found deficient practices at the company's Newark, Calif., laboratory, some of which the agency said posed "immediate jeopardy" to patients.

Theranos spokeswoman Brooke Buchanan said in an emailed statement that the lawsuit "is without merit." She added, "The company will vigorously defend itself against these claims."

The $9 billion company has faced a deluge of bad press over the past few months, following a pair of investigative reports in The Wall Street Journal that alleged Theranos overstated the capabilities of its Edison devices. The company has since faced FDA restrictions, undergone a criminal investigation, lost a $350 million deal with Safeway, reduced its board by more than half and lost its president and COO, Sunny Balwani, among other challenges.

 

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