- The Drug Enforcement Administration is investigating Cerebral, a $4.8 billion mental-health startup.
- Cerebral is one of the companies prescribing highly regulated drugs online without in-person visits.
- Cerebral said it was unaware of the DEA’s interviews, and that it complied with regulations.
US Drug Enforcement Administration agents interviewed former Cerebral employees about the mental-health startup — one of the few
companies that prescribes controlled substances online — said two people with direct knowledge of the matter.
The sources spoke on condition of anonymity because they understand an investigation to be ongoing. Their identities are known to Insider.
Michael Cereo, the assistant special agent in charge of the DEA’s Buffalo district office, said the DEA could neither confirm nor deny an investigation.
“However, as the DEA, we’re concerned with the health and safety of the public,” Cereo said. “And any medical professional or organization that’s prescribing drugs, we’re going to monitor their behavior.”
Insider relayed information about the DEA’s interviews, without naming the company, to Ronald Chapman II, a federal criminal defense lawyer specializing in DEA investigations at Chapman Law Group, and Larry Cote, a former lawyer for the DEA who now advises
on DEA compliance. They said the nature of the agents’ questions and the fact that they interviewed former employees strongly suggests that there is an investigation underway. Chapman said the inquiry had the markers of a criminal investigation.
In those cases, the DEA typically interviews former employees first to avoid tipping off the business owners, and these interviews are meant to gather enough information to obtain a search warrant, Chapman said.
“They are definitely investigating,” Chapman added. “The only question is whether that will turn up anything.”
Cote said that based on the information Insider provided, the DEA could be investigating the potential for criminal, civil, or administrative sanctions.
In a statement provided to Insider, Cerebral said the company was unaware of any DEA interviews and could not comment on what any interviewees may have said. Cerebral also said that it was unaware of a DEA investigation into the company or its medical group. It said the DEA performs many important functions, including regulatory oversight. The company said the mental-health services provided through its platform comply with applicable federal and state laws and regulations and accepted medical practices.
The DEA interviews follow pushback against Cerebral by DEA offices in several states. Specifically, they have rejected some Cerebral clinicians’ applications for DEA licenses since at least last fall, an internal company document obtained by Insider showed. DEA licenses are necessary to prescribe controlled substances.
Cerebral, a $4.8 billion company backed by venture-capital firms, including SoftBank and Oak HC/FT, provides medication and therapy online to people with anxiety,
, ADHD, and other conditions. It’s one of a handful of online companies that prescribes controlled substances tightly regulated by the DEA, such as Adderall and Xanax, which have the potential to be addictive.
The startup, which has served more than 200,000 patients since it launched in 2020, has faced scrutiny in recent months over its prescribing practices from news outlets, industry observers, and at least one former executive who recently filed a lawsuit.
Major pharmacy chains, including Walmart and CVS, have blocked or delayed telehealth prescriptions for Adderall and other controlled substances. In some cases the pharmacies have expressed concerns that clinicians at Cerebral and another company are writing too many prescriptions for stimulants, The Wall Street Journal reported in April. Cerebral’s preferred pharmacy, Truepill, also recently suspended Adderall prescriptions, the outlet reported.
Cerebral said pharmacies could hold prescriptions for administrative reasons, such as problems with insurance coverage. The company works with them to answer any questions and resolve delays.
On Wednesday, the Journal reported that Cerebral would pause prescribing controlled substances, including Adderall, to treat new patients with ADHD starting next week. Kyle Robertson, Cerebral’s CEO, confirmed the changes in an online letter.
Investigators’ questions suggest a broad probe
DEA agents have interviewed former employees as recently as April, the two sources with direct knowledge said. Their questions were wide-ranging.
The agents asked about the rules Cerebral sets for prescribing controlled substances to patients, the sources said. One source said that agents sought banking information related to Cerebral.
The DEA also asked about Cerebral’s processes for monitoring whether its clinicians’ licenses are up to date, and that they’re not on a federal list barring them from participating in federal healthcare programs, one of the sources said.
In its statement, Cerebral said that it has processes to verify clinician licenses, and that it checks federal exclusions lists.
The DEA agents are also looking into alleged incidents in which patients have created more than one account with Cerebral, that source said.
Matt Truebe, a former vice president in charge of product and engineering at Cerebral, sued the company, saying he was wrongfully terminated. In the complaint, filed against the company on Wednesday, he alleged that he uncovered about 2,000 duplicate shipping addresses in Cerebral’s patient database in August, suggesting that patients were able to set up multiple accounts to obtain more medication, the complaint said.
One customer received duplicate prescriptions from multiple Cerebral clinicians, which suggested prescription fraud, the complaint said.
Truebe and his counsel did not respond to a request for comment.
Cerebral said in its statement that the safe medical care of patients is its highest priority, and that it is continually refining its internal processes to identify duplicate accounts.
The company said it verifies patients’ identities when they sign up and during initial visits with clinicians and checks the legitimacy of shipping addresses. Accounts flagged as potential duplicates are removed, it said.
“Any efforts to get more medication than prescribed is an important issue for all health providers, including online healthcare service providers,” Cerebral said in the statement.
2 lawyers said that the DEA’s questioning of former employees likely indicates that an investigation is underway
The lawyers, Chapman and Cote, said the DEA is increasingly interested in the prescribing of controlled substances, including the stimulant Adderall, used to treat ADHD.
Cerebral has faced scrutiny from news outlets and former employees for making it easy for patients to obtain controlled substances after a 30-minute online video session. Former clinicians have said they felt pressure to prescribe controlled substances, Bloomberg’s Businessweek and the Journal reported.
In the statement, Cerebral said clinicians assess and treat patients based on their professional judgment. In addition to the initial appointment, they can schedule follow-up appointments, the company said.
“The availability of audiovisual appointments allows people to get the care that they need that they otherwise would not be able to get,” Cerebral said.
Chapman said the DEA may be concerned with whether Cerebral providers are establishing a relationship with patients before prescribing controlled substances. That’s often an issue in telemedicine, he said. The agency could also be interested in the relationship between Cerebral and the pharmacy it uses to fulfill prescriptions for controlled substances, he added.
”The DEA would much prefer that a patient go see a doctor in their home state, get an evaluation, get a medication, fill it at a local pharmacy,” Chapman said. “This widespread practice of telemedicine — the DEA is just not ready for that yet.”
The DEA performs routine inspections and audits, as well as criminal investigations. Cote told Insider in an interview that the DEA would typically reach out directly to a company if it were conducting a standard inspection or audit.
“It seems to me like this would be something more than routine,” Cote said.
Chapman said questions from DEA agents about banking information also suggest a criminal investigation. This is because the DEA may be looking for that information so they can seize accounts, if necessary, he said.
Cerebral has seen DEA pushback in the past, Insider has learned
Cerebral has previously dealt with pushback from the DEA over its clinicians’ licensing dating back months.
DEA offices in various states have denied Cerebral clinicians’ applications for DEA licenses, said an internal company document seen by Insider.
Cerebral set up WeWork addresses and instructed clinicians to use them on their DEA license applications. DEA offices in some states, including North Carolina, Michigan, and Illinois, have rejected that approach, the document and the sources close to the DEA interviews said.
Using a WeWork address wouldn’t be compliant with the DEA requirement that a license be attached to the address where providers practice, Chapman said. The agency requires that providers tell the agency where they are practicing medicine, so agents can go there when they need to audit compliance, he continued.
Cerebral said the addresses included by clinicians on the state-specific registrations meet federal requirements. At times this has included the use of leased locations under the control of Cerebral, the company said in the statement. Only clinicians with valid state DEA certification can prescribe controlled substances on Cerebral’s platform, the company said.
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