Telehealth company Cerebral to pay $3.65 mln to resolve probe of Adderall sales
By Brendan Pierson
Nov 5 (Reuters) -Mental health telemedicine company Cerebral has agreed to pay $3.65 million to resolve a federal investigation into practices that authorities say encouraged the unauthorized distribution of Adderall and other controlled substances.
The non-prosecution agreement, announced on Monday by the office of U.S. Attorney Breon Peace in the Eastern District of New York, also includes a $2.9 million fine, which is deferred because of the company's inability to pay. It will be waived if the company continues to cooperate and provide information to prosecutors during the 30-month term of the agreement, Peace's office said.
Prosecutors said Cerebral's illegal conduct lasted from 2019 to 2022. They said the company marketed itself as providing treatment for attention deficit/hyperactivity disorder and internally tracked how many initial visits with its providers resulted in prescriptions of controlled substances like Adderall.
They said the company deliberately sought to increase that prescription rate, including by awarding bonuses to supervisors who delivered more prescriptions and ignoring concerns from its own employees that its practices encouraged illegal prescriptions.
"People seeking care for their mental health conditions should receive high-quality care that is not motivated or driven by greed," Peace said in a statement.
"As reflected in the agreement, Cerebral takes pride in the measures it has implemented since that time to strengthen and ensure its delivery of high quality, patient-centered care to those in need of behavioral health treatment," Cerebral said in a statement.
Cerebral's appeared to be the first non-prosecution agreement of its kind. Federal prosecutors in June criminally charged the founder and top doctor of San Francisco-based telehealth startup Done Global with running a fraudulent scheme to distribute Adderall online.
U.S. regulators have said that illegal Adderall sales have exacerbated a shortage of the drug that has persisted since 2022.
The government classifies Adderall as a Schedule II controlled substance, because of its high potential for abuse and dependence. Cocaine, methamphetamine and the opioid OxyContin are among other products in that group.
The $3.65 million forfeiture represents the amount of revenue reasonably attributable to the misconduct, prosecutors said.
Prosecutors said the Delaware-based company, which markets mental health services directly to consumers, failed to maintain internal controls against diversions, allowing duplicate patient accounts through which the same patient could obtain a prescription through different providers.
The company has taken voluntary measures since 2022 to address the problems, prosecutors said.
(Reporting By Brendan Pierson in New York)
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