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Cerebral Spurs Congress Plea for DEA Probe of Web Prescriptions

·3 min read

(Bloomberg) -- Congressional investigators are asking the U.S. Drug Enforcement Administration what it’s doing to oversee mental health startups such as Cerebral Inc., calling the company’s business and prescribing practices “manipulative” and “aggressive,” according to a copy of a letter seen by Bloomberg.

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In the letter, the chairman of the House Committee on Oversight and Government Reform asked the DEA about the startups, which have rapidly expanded by offering online consultation with clinicians as well as prescriptions for drugs such as Adderall and Xanax.

“The Committee respectfully requests information from the Drug Enforcement Administration to ensure you are focused on catching bad actors who take advantage of the current permissive regulatory structure,” committee Chairman Gerald Connolly said in the June 6 letter, which mentions Cerebral several times. “Reports claim that some companies believe DEA will not or do not have the capacity to enforce its rules.”

In response to the letter, a spokesman for Cerebral told Bloomberg: “Our clinicians are directed to act based on what they conclude is best for patients. We provide best-in-class resources and support systems to our clinicians and do not dictate how clinicians should treat patients.”

Because of pandemic-era regulatory relaxations, remote prescribing of controlled substances for mental health treatments has been permitted over the last two years. Cerebral, a SoftBank Group-backed startup, became a leader in the field of remote prescribing for mental health ailments such as depression and ADHD. The firm, which recently ousted its founder, is being investigated by the federal government for possible violations of the Controlled Substances Act. The company is fully cooperating with that investigation, a Cerebral spokesperson said last month.

Online Boom

Mental-health access has long been a challenge in the US, where providers can be overwhelmed and navigating insurance can be complex for patients. Telehealth apps offered an alternative to the doctor’s waiting room, with faster access to mental-health experts and easier payments. Many of the services also offer prescriptions online, without having to see a physician in person.

Launched in January 2020, Cerebral became one of the most prominent companies in the budding industry. At first, it prescribed only non-controlled substances, such Lexapro and Prozac. Only after regulators loosened prescribing rules during the pandemic did it begin to prescribe drugs that are more tightly controlled by regulators because of their potential for abuse. After a $300 million investment from SoftBank in 2021, Cerebral was valued at $4.8 billion.

In a March report in Bloomberg Businessweek, former nurse practitioners for the company described a fear that Cerebral was over-prescribing the medications. Since then, Cerebral has gone through a variety of changes. In early May, founder and then-chief executive officer Kyle Robertson announced the company would stop writing prescriptions for controlled substances. Robertson has since been ousted by the board of directors and replaced by David Mou, who was the chief medical officer for the company.

Cerebral also has announced layoffs, with affected employees being notified by July 1. A spokesman said the layoffs were part of a decision to “double down on quality” and restructure operations.

Bloomberg News is examining the costs and benefits of an evolving field. Share your story at telehealth@bloomberg.net

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