During the pandemic, the U.S. government relaxed rules that prevented doctors from prescribing controlled substances — like Adderall — over the internet. That’s created a bonanza for venture-backed companies like Cerebral and Done.
Wall Street Journal reporter Rolfe Winkler has been chronicling these telemedicine companies’ prescription practices.
Winkler — a friend and former bridge partner of mine — came on Dead Cat to talk to Tom Dotan, Katie Benner, and me about his stories.
In March, with a colleague, Winkler documented how patients were getting Adderall prescriptions after 30-minute appointments. “All day every day, people were demanding Adderall,” a nurse practitioner for online mental-health company Cerebral Inc. told the Journal. “You can’t diagnose people in a half hour.”
“Digital health startups that provide diagnoses and medications online for ADHD are following a familiar Silicon Valley playbook: They’re using software and the internet to remove the friction surrounding a service that is in high demand. Instead of a ride or groceries, this time it’s prescription drugs. Two of the most prominent new providers of these services for ADHD patients are Cerebral and Done Health, which now treat tens of thousands of patients online and have well-known supporters from the worlds of venture capital and sports.”
Then in April, Winkler and another colleague reported that CVS and Walmart were blocking and delaying prescriptions for telemedicine startups. That same month, Cerebral’s former vice president in charge of product and engineering sued Cerebral over the company’s alleged focus on driving prescriptions.
“When Cerebral determined that patients who were prescribed stimulants were more likely to remain Cerebral customers, the CEO directed Cerebral employees find ways to prescribe stimulants to more ADHD patients to increase retention,” the lawsuit said.
This week, Winkler reported that startup Truepill, a pharmacy that until recently mailed some of Cerebral’s customers their Adderall medication, has decided to stop fulfilling schedule II drugs.
In December, SoftBank’s Vision Fund led a $300 million investment in Cerebral that valued it at $4.8 billion.
On Dead Cat, we talked about the tough questions these telehealth businesses have raised by applying the venture capital industry’s preferred independent contractor model to healthcare.
At the 48-minute mark, we talk about Elon Musk’s effort to buy Twitter. Winkler, who has written about Musk’s Neuralink, offered a pretty rosy view (for a journalist) of the world’s richest man.
Give it a listen.