The Clients

In 'The Clients' episode of 'The Dropout,' we delve into the partnerships between Theranos and two major U.S. companies, Safeway and Walgreens, which were crucial in propelling Theranos from a startup to a significant player in the healthcare industry. The episode begins by highlighting the anticipation and high stakes involved as Theranos, under Elizabeth Holmes's leadership, moved to commercialize its blood-testing technology. The narrative then shifts to the experiences of Safeway and Walgreens, both of which invested heavily in Theranos, seduced by the promise of a revolutionary blood-testing device that could conduct comprehensive tests with just a finger prick.

The episode recounts the testimony of former Safeway CEO Steven Burd, who describes his personal interactions with Elizabeth Holmes and his initial belief in her vision and charisma. Burd's testimony reveals how Safeway's partnership with Theranos, which involved significant financial investment and store renovations, was based on the expectation of a groundbreaking product that never materialized. The narrative details the mounting frustrations at Safeway as deadlines were missed and Theranos's technology failed to deliver on its promises.

Similarly, the episode covers the experience of Walgreens through the testimony of Wade Miquelon, its former CFO. Miquelon speaks to the initial excitement and potential he saw in Theranos's technology, which led to the rollout of Theranos blood-testing services in Walgreens stores. However, the episode also exposes the inconsistencies and issues that arose, such as inaccurate claims about military deployment and the use of third-party devices for testing.

The episode further explores the peculiar tenure of Dr. Sunil Dhawan, a dermatologist who became Theranos's lab director at the behest of Sunny Balwani. Dhawan's limited involvement and lack of oversight during his tenure, as well as his minimal interaction with Holmes, paint a picture of a company scrambling to maintain appearances as regulatory scrutiny intensified.