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Digital Health Startup Cerebra Gets Subpoenaed Over ADHD Prescriptions

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When it comes to the health of their ADHD patients, US regulators are concerned online telehealth companies aren’t paying enough attention.
On Saturday, mental health start-up Cerebral disclosed that it has been served with a subpoena by federal prosecutors looking into possible abuses of the Controlled Substances Act. The company was already under scrutiny for allegedly being way too quick to sign off on amphetamine prescriptions.
Too Much of a Good Thing
Digital start-ups have piled into the mental health space, making care available in about as many clicks as would take to summon a rideshare. Cerebral, which runs a subscription platform that connects people in all 50 states to a network of some 2,000 mental health clinicians, has registered over 200,000 patients since it was founded in 2020. With backing from SoftBank, it’s notched a $4.8 billion valuation as of December 2021.
Making mental health services more accessible is unquestionably a good thing. Still, the question remains whether it’s an example of too much of a good thing. Earlier this year, clinicians who work with Cerebral spoke to Bloomberg and The Wall Street Journal, saying they felt pressured to prescribe patients stimulants to treat ADHD after half-hour-long evaluations that were too short to yield a proper diagnosis. Then, last month brought a blistering lawsuit from a former executive:
“When Cerebral determined that patients who were prescribed stimulants were more likely to remain Cerebral customers, the CEO directed Cerebral employees to find ways to prescribe stimulants to more ADHD patients to increase retention,” alleges a suit filed by former VP Matthew Truebe, who also claims the company’s “goal was to prescribe stimulants to 100% of Cerebral’s ADHD patients.”Truebe also alleges he found 2,000 duplicate shipping addresses, meaning some users could be trying to fraudulently obtain extra drugs, and that the company failed to address the issue when he raised it. Cerebral denies all of his claims.Red Flags: Cerebral plans to “pause” new prescriptions for ADHD drugs like Adderall and Ritalin beginning today. Many in the pharmaceutical industry had actually been quietly concerned for months. Some Walmart and CVS pharmacies blocked and delayed Adderall prescriptions from Cerebral and digital health rival Done in the last year, according to sources who spoke to the WSJ. Earlier this month, Truepill, Cerebral’s online pharmacy of choice, stopped filling ADHD prescriptions out of an “abundance of caution.” –

For more crisp and insightful business and economic news, subscribe to
The Daily Upside newsletter.
It’s completely free and we guarantee you’ll learn something new every day.

When it comes to the health of their ADHD patients, US regulators are concerned online telehealth companies aren’t paying enough attention.

On Saturday, mental health start-up Cerebral disclosed that it has been served with a subpoena by federal prosecutors looking into possible abuses of the Controlled Substances Act. The company was already under scrutiny for allegedly being way too quick to sign off on amphetamine prescriptions.

Too Much of a Good Thing

Digital start-ups have piled into the mental health space, making care available in about as many clicks as would take to summon a rideshare. Cerebral, which runs a subscription platform that connects people in all 50 states to a network of some 2,000 mental health clinicians, has registered over 200,000 patients since it was founded in 2020. With backing from SoftBank, it’s notched a $4.8 billion valuation as of December 2021.

Making mental health services more accessible is unquestionably a good thing. Still, the question remains whether it’s an example of too much of a good thing. Earlier this year, clinicians who work with Cerebral spoke to Bloomberg and The Wall Street Journal, saying they felt pressured to prescribe patients stimulants to treat ADHD after half-hour-long evaluations that were too short to yield a proper diagnosis. Then, last month brought a blistering lawsuit from a former executive:

“When Cerebral determined that patients who were prescribed stimulants were more likely to remain Cerebral customers, the CEO directed Cerebral employees to find ways to prescribe stimulants to more ADHD patients to increase retention,” alleges a suit filed by former VP Matthew Truebe, who also claims the company’s “goal was to prescribe stimulants to 100% of Cerebral’s ADHD patients.”Truebe also alleges he found 2,000 duplicate shipping addresses, meaning some users could be trying to fraudulently obtain extra drugs, and that the company failed to address the issue when he raised it. Cerebral denies all of his claims.

Red Flags: Cerebral plans to “pause” new prescriptions for ADHD drugs like Adderall and Ritalin beginning today. Many in the pharmaceutical industry had actually been quietly concerned for months. Some Walmart and CVS pharmacies blocked and delayed Adderall prescriptions from Cerebral and digital health rival Done in the last year, according to sources who spoke to the WSJ. Earlier this month, Truepill, Cerebral’s online pharmacy of choice, stopped filling ADHD prescriptions out of an “abundance of caution.”

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