Regulators investigate mental-health startup Cerebral, signaling an end to telehealth’s Wild West

Tuesday, May 10, 2022 by Robinhood Snacks |
Telehealth under scrutiny (MirageC/Getty Images)

Telehealth under scrutiny (MirageC/Getty Images)

Over prescribed… and under investigation. This weekend, online mental-health startup Cerebral said it’s been subpoenaed by the feds over its pill-prescription practices. Refresher: the FDA changed the rules to allow virtual prescriptions during the pandemic — even for ADHD meds like Adderall, which are easily abused. Last year, ADHD drug prescriptions jumped 10% from 2020, and critics worry telehealth startups have become digital pill mills:

  • In March, Bloomberg and the WSJ reported that Cerebral and Done pushed workers to prescribe ADHD meds after 30-minute video sessions.
  • In response, Walmart, CVS, Walgreens, and startup Truepill reportedly stopped distributing ADHD meds for telehealth startups, with Cerebral also pausing new ADHD scripts.

Robo-therapy roller coaster… It’s not just ADHD: rates of anxiety and depression spiked 25% during the pandemic, the WHO said. So did investment in mental-health startups: nine of them (including Cerebral) hit unicorn valuations ($1B+). But many execs at these fledgling companies have no medical background, and some have been accused of using Silicon Valley strategies that prioritize growth over patient care:

  • Viral marketing: Cerebral reportedly spends millions on ads on TikTok, Insta, and Google each month; some patients say TikTok ads convinced them they had ADHD.
  • D2C pill subscriptions: Cerebral and Done charge patients a monthly fee, meaning they earn more from long-term prescriptions.

Telemedicine is pharma’s Wild West… and the Cerebral case could mean regulators are ready to play sheriff. The telehealth model exploded during Covid, when VC-funded startups took a page out of tech’s "growth at all costs" playbook to scale fast. But a one-size-fits-all telehealth model may not work as well for complex diagnoses like ADHD as it does for common ailments like the flu — and this tele-Adderall crackdown could signal more regulation to come.