As expected, Walgreens canceled the deal after the FDA warned the company that it may need pre-production approval, along with a medical device tax. Why were they able to do this now, given that the device has already been in production? Because, as John Derbyshire at National Review points out, the FDA simply hadn't caught on. The timing and method by which they choose to regulate is totally up to them.
What actually is a “medical device”? Answer: A medical device is anything the FDA declares to be a medical device.