What You Should Know:
– Cerebral, Inc., an online mental healthcare provider, has entered into a non-prosecution agreement (NPA) with the U.S. Attorney’s Office for the Eastern District of New York to pay more than $3.6M to resolve allegations that it engaged in practices that facilitated the unauthorized distribution of controlled substances from 2019 to 2022.
– Founded in 2020, Cerebral offers telehealth services aimed at providing mental health treatment, including medication management and therapy for conditions such as depression, anxiety, and ADHD (Attention Deficit Hyperactivity Disorder). The company gained traction quickly, becoming one of the fastest-growing online healthcare platforms in the United States.
The Allegations: Unauthorized Distribution of Controlled Substances
Cerebral primarily operated on a subscription-based model, offering tiered service plans that granted patients access to healthcare providers via video consultations. Some of the plans allowed patients to obtain prescriptions for medications, including controlled substances such as Adderall, a stimulant used to treat ADHD.
In October 2020, the company expanded its services to include the prescription of Schedule II controlled substances (drugs with a high potential for abuse), which set off a chain of events that would ultimately lead to the company’s legal troubles. From 2021 to 2022, Cerebral allegedly engaged in business practices designed to increase prescriptions of stimulant medications such as Adderall to patients, particularly those diagnosed with ADHD. However, the company’s internal metrics and goals put pressure on healthcare providers to prescribe medication inappropriately, even when not clinically warranted.
Key elements of the allegations include:
- Prescribing targets: Cerebral set ambitious internal targets to increase its “Initial Visit Rx Rate”, which tracked the percentage of new patients receiving prescriptions for controlled substances after their first consultation. Between May 2021 and May 2022, the company sought to reach a 95% prescription rate for new patients, despite concerns that this could encourage overprescribing.
- ADHD-specific prescribing: Cerebral also focused on increasing prescriptions for ADHD stimulants and set a goal to achieve a 100% prescription rate for ADHD patients without considering potential risks, such as misdiagnoses or overmedication.
- Drug diversion risks: Reports indicated that Cerebral failed to implement effective measures to prevent drug diversion—the practice of diverting controlled substances for non-medical use. This was exacerbated by issues like duplicate patient accounts, which allowed individuals to obtain prescriptions from multiple providers within the same company.
The Non-Prosecution Agreement (NPA)
As part of the NPA, Cerebral has agreed to forfeit $3,652,000 to the United States, representing the amount of revenue linked to the increase in ADHD treatment and stimulant prescriptions. The company will also pay a deferred fine of $2,922,000, which will be waived if Cerebral complies with the terms of the NPA over a 30-month period.
Cerebral has expressed a commitment to remediation and corporate responsibility in response to the legal outcome. The company has acknowledged its past mistakes, implemented significant changes to its operational practices, and pledged to work with authorities to ensure full compliance with the law.
“Today’s settlement holds Cerebral responsible for their failure to protect patients from the harms caused by the unnecessary or overprescribing of potentially-addictive ADHD medications,” said DEA Administrator Anne Milgram. “Cerebral’s exploitation of telemedicine flexibilities deceived patients who were legitimately seeking medical care, putting them at risk in exchange for profit. DEA remains committed to telemedicine accessibility that supports the health of all patients while also ensuring that telemedicine companies and practitioners prioritize patient health and safety above all else.”
