Mental health startup Cerebral's prescribing habits prompt CEO's resignation
Key Takeaways
Cerebral gained popularity during the COVID-19 pandemic by providing direct-to-consumer mental health therapies and medications online.
They have attracted scrutiny in recent months for the ease with which patients can receive drugs.
The CEO has stepped down amidst the controversy, and the company is being further investigated.
The co-founder of the controversial mental-health startup Cerebral has stepped down as CEO, according to a statement from the company.[] He will be replaced with David Mou, MD, MBA, the company’s president and chief medical officer.
The company will also stop prescribing most controlled substances.
The news is drawing additional attention after reports that national pharmacy chains expressed concerns about the number of stimulant prescriptions provided by Cerebral and similar companies.
The Department of Justice and the United States Drug Enforcement Agency (DEA) are investigating the company.
Company background
Launched in 2020, Cerebral gained popularity during the COVID-19 pandemic by providing direct-to-consumer mental health therapies and medications online.
The company has grown dramatically in such a short time, with more than 200,000 patients registered.[] In late 2021, Olympic champion Simone Biles joined Cerebral as the company’s chief impact officer. Shortly thereafter, SoftBank invested $300 million in the company, which was valued at $4.8 billion.
The controversy
While the company treats a range of conditions without prescribing pharmaceuticals, Cerebral has attracted scrutiny in recent months for the ease with which patients can receive drugs that have traditionally required a more robust doctor-patient relationship.
In April, Matthew Truebe, a former vice president at Cerebral, filed a lawsuit alleging that the company planned to prescribe stimulants to all of the patients who requested them for ADHD treatment.[]
The lawsuit also claims that Cerebral ignored reports that employees had unauthorized access to confidential patient information and that customers were setting up duplicate shipping addresses to obtain more prescriptions.
After the DEA relaxed the Ryan-Haight Act—which requires any practitioner to perform an in-person medical evaluation prior to prescribing controlled substances—Cerebral’s providers began prescribing highly regulated medications for anxiety and ADHD.
Bloomberg reported that one of Cerebral’s care coordinators had a roster of 1,000 patients and fielded an average of 100 messages each day.[]
Cerebral had also created “Eileen Davis,” which was a pseudonym that was shared among hundreds of Cerebral’s care coordinators. Those coordinators interacted with patients using the fake name. The company retired the moniker in August.
Before more recent controversies, a former Cerebral patient claimed that she was billed by Cerebral without receiving mental health therapy. Several social media outlets have also pulled Cerebral’s ads due to misleading health claims.
What this means for you
The COVID-19 pandemic has created a sustained push for more availability of telehealth services. Direct-to-consumer healthcare companies can fill an urgent industry need, but greater focus should be directed toward inappropriate distribution of controlled substances, as well as toward upholding the confidentiality of a patient’s medical information.