Elizabeth Holmes Convinced Walgreens To Invest In Theranos Without Functioning Tech

  • Hulu's The Dropout features Elizabeth Holmes convincing a Walgreens rep to invest in Theranos.

  • In the series, Walgreens backs Theranos without seeing the actual technology at work.

  • What happens on screen isn't so different from how things played out in real life.

The new Hulu mini-series The Dropout tells the true story of how Elizabeth Holmes fooled investors and many in the scientific community into believing that her company, Theranos, could diagnose a slew of diseases in people by using a single drop of blood.

Obviously, some facts are tweaked and changed (because, TV) but the core story is the same.

In its fourth episode, The Dropout details how Elizabeth (played by Amanda Seyfried) brought Ramesh “Sunny” Balwani onboard as COO of her company as her position as CEO was becoming a little rocky. Elizabeth’s Edison machine wasn’t working the way it should, but she pushed Sunny to go after a major business partnership with Walgreens.

Their liaison at Walgreens was Dr. Jay Rosan, who was the medical director of the pharmacy chain. Elizabeth didn’t have a working prototype at the time, but she charmed the doctor by talking up how he convinced doctors to send their records electronically back in 1992 and how she wanted to revolutionize medicine the same way he did.

She then offered to open up wellness centers where people could come to get low-cost blood tests. Rosan then met with the executive vice president and chief financial officer of Walgreens, Wade Miquelon, who wasn’t totally sold on Theranos.

Rosan was persistent, though, and told Miquelon that Theranos might also be talking to their competitor, CVS. So, Miquelon agreed to look into it but hired a man named Kevin Hunter to look into the authenticity of the tests. Elizabeth made up a story about how she was worried that Hunter, who used to work for Quest Diagnostics, wanted to copy her technology.

Miquelon got cold feet about the deal, but Elizabeth revealed that Theranos was also in talks with Safeway for a partnership and also suggested she was meeting with CVS. Walgreens ended up signing a partnership with Theranos without ever seeing the tech.

There’s a lot going on in this episode, and it’s understandable to wonder what’s actually real. Here’s the deal.

Yes, Dr. Jay Rosan is a real person.

Rosan is played by Alan Ruck in the series, and he’s a real person. Rosan is the former Walgreens Vice President of Health Innovation and a Walgreens Corporate Innovation Team member. He's now the co-founder of a company called Medovation, and an advisor to the Philadelphia College of Osteopathic Medicine.

The overall storyline is accurate.

A Wall Street Journal article published in 2016 detailed how Walgreens invested $50 million in Theranos before eventually abandoning their deal. It also details how Walgreens made its deal “without fully validating” Theranos’ technology over fears that Elizabeth would walk away.

Testimony by former Theranos scientist Surekha Gangakhedkar in Elizabeth’s trial for fraud revealed Elizabeth was well aware that her Edison machine didn’t work when she pursued the deal with Walgreens.

"I was not comfortable with the plans they had in place so I made a decision to resign and not continue working there,” Gangakhedkar said, per CNN. Still, the Walgreens deal went forward.

Walgreens and Theranos originally planned to make testing available at store locations across the country. But they only ended up in 40 stores before the pharmacy chain ended the deal after many questions were raised about the authenticity of the tests.

Elizabeth was eventually put on trial for fraud, and convicted.

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