Cerebral under investigation by DOJ for possible controlled substance violations

Cerebral is under investigation for possible violations of the Controlled Substances Act as the digital mental health company faces increasing scrutiny over its prescribing practices for medications like Adderall.

As first reported by InsiderCerebral confirmed it had received a grand jury subpoena from the US Attorney’s Office for the Eastern District of New York on the evening of May 4. That same day, the company had announced it would pause prescriptions of controlled substances like Adderall and Ritalin for new patients and introduce a host of new safety and quality initiatives.

According to Insider, the subpoena requests documents dating back to Cerebral’s launch in 2020, including its policies regarding controlled substances, information on its financials surrounding controlled substances and its procedures to root out prescription fraud.

“To be clear, at this time, no regulatory or law enforcement authority has accused Cerebral of violating any law,” the company wrote in a statement. “Cerebral intends to fully cooperate with the investigation, which we already have conveyed to the US Attorney’s Office.”

WHY IT MATTERS

Last week, Insider also reported that former Cerebral employees had been questioned by the US Drug Enforcement Administration, suggesting an investigation was also under way at that agency. The digital mental health company told Insider it was unaware of any DEA investigation.

The news comes weeks after a former Cerebral executive sued the company alleging he was fired after bringing up concerns about prescribing practices. Matthew Truebe, former vice president for product and engineering, alleged patient Cerebral had not prioritized investigating duplicate shipping addresses in its database, which could mean some users were setting up additional accounts to access more medication.

Truebe also said the company’s goal was to prescribe stimulants to all of its ADHD patients in hopes of increasing retention. In a statement, Cerebral said it believed the claims in the suit were “without merit.”

At the American Telemedicine Association’s Annual Conference & Expo last week, Cerebral Chief Medical Officer Dr. David Mou defended the company’s prescribing practices but said mistakes had been made, particularly in marketing practices and social media campaigns targeted at younger customers.

Digital mental health companies have raised billions globally in the wake of the COVID-19 pandemic, and Cerebral is a large player in the space. Late last year, it scored $300 million in funding, bumping its valuation to nearly $5 billion.

ON THE RECORD

“Controlled substances are medically appropriate for the treatment of many mental and physical health conditions – and are in fact the standard of care for the treatment of several conditions. Only appropriately licensed and registered clinicians make decisions about whether or not to prescribe controlled substances to any Cerebral patient,” Cerebral said in its statement.

“Cerebral has dedicated significant time, energy, and resources to ensure that its policies and procedures regarding the prescription of controlled substances and other medications both are medically appropriate and comply with all applicable state and federal law.”

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