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Changing Relationships at Walgreens

Pharmacy chain Walgreens is seeking to end its relationship with blood testing firm Theranos, while also possibly also exploring a deal with direct-to-consumer genetic testing firm 23andMe.

According to the Financial Times, Walgreens has become "impatient" with Theranos' regulatory issues and has asked its attorneys to search through its contract with the embattled blood testing to find a way to close the 40 blood-testing clinics Theranos has set up in 40 Arizona Walgreens stores.

Regulators at the Centers for Medicare & Medicaid Services sent the company a letter in January that detailed deficiencies in the lab practices at its California lab, some of which CMS said posed "immediate jeopardy to patient health and safety." Regulators gave Theranos 10 days to respond with its plan to address the issues.

Walgreens likewise gave the company 30 days to fix the issues at its California lab and said it would terminate their agreement if the problems were not solved.

"They've been unhappy with the relationship and it's really a question of working through the contractual and legal arrangements," a person familiar with the matter tells the Financial Times. "They're not interested in the Theranos deal."

Theranos, meanwhile, says the pharmacy has no legal basis for ending the arrangement.

At the same time, Walgreens is reportedly speaking with 23andMe about offering the DTC genetics firm's spit kits, according to the San Francisco Business Times.

"Soon we're going to be in Walgreens," 23andMe Chief Scientific Officer Richard Scheller said at a forum at the University of California, San Francisco, according to the San Francisco Business Times. "You just buy one."

However, the company appeared to walk back his remarks, as spokesperson Andy Kill says 23andMe has been in talks with a number of retailers, but that "there is nothing imminent to announce."

A few years ago, Walgreens scuttled plans to offer Pathway Genomics' genetic testing kit on its shelves after regulatory issues arose.

23andMe has had its own run-in regulators, but it now is offering a new version of Personal Genome Service that includes ancestry, wellness, and nonmedical trait reports as well as Food and Drug Administration-authorized carrier status reports.