Direct Access Testing Wars Are Heating Up

After Theranos-Safeway split, grocery company switches to Sonora Quest Laboratories

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CEO SUMMARY: In Phoenix, where Theranos already operates patient service centers in about 40 Walgreens pharmacies, Sonora Quest Diagnostics has an agreement with Safeway to provide clinical laboratory testing services in two grocery stories in the Phoenix metro as part of a pilot arrangement. Find out what’s unfolding in this highly-competitive market for direct access testing customers.

IT’S RARE TO FIND ONE COMPANY STEP IN after another fails to execute a business strategy successfully. But that happened when Sonora Quest Laboratories in Scottsdale, Arizona, moved to fill the void created when Theranos Inc. did not fulfill an agreement to open patient service centers (PSCs) in Safeway stores in Arizona.

Since last month, Sonora Quest has opened patient services centers in two Safeway stores. In November, it was reported by The Wall Street Journal that Theranos had planned to open direct access testing PSCs in 800 Safeway stores nationwide. To accommodate these centers, Safeway spent $350 million to build the infrastructure Theranos would need. The Journal also reported that Theranos and Safeway were negotiating to dissolve their agreement after it published its exposé of the so-called disruptive innovation lab testing company. (See TDR, Nov. 20, 2015.)

For two years, both CEO Elizabeth Holmes and Theranos, her lab testing company, have been the darlings of the national media. A procession of cover stories in prominent magazines hailed her as an entrepreneurial genius who developed revolutionary diagnostic technology that would enable her company to disrupt the entire clinical lab industry.

According to The Wall Street Journal, along with collecting specimens from consumers and patients, Theranos had planned to do some lab testing onsite in Safeway stores as a way to deliver results quickly to patients. It is reported that as many as 800 Safeway stores were remodeled with waiting areas and spaces where specimens could be collected and lab tests performed on site.

Does your organization have any plans to move into the DAT space? Will DAT testing pose a threat to you? Please share your thoughts in the comments below.



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