Ketamine Telehealth Providers: Beware DEA

Federal law requires prior in-person evaluations before a physician can provide telehealth services. The federal government declared a COVID-19 public health emergency, essentially suspending this rule. Following this suspension, ketamine telehealth providers and other virtual telehealth providers popped up all over the country. In all likelihood, the emergency declaration will end soon, leaving the industry in limbo. And to make matters worse, the federal government may be paying close attention to controlled substance telehealth providers.

Over the last few days, the Department of Justice reportedly initiated an investigation of Cerebral, a telehealth provider. The DOJ also apparently hit Cerebral with a grand jury subpoena. As The Verge reports:

Mental health startup Cerebral is under investigation by the US Department of Justice over its prescribing of controlled substances like Adderall and Xanax. The company received a grand jury subpoena asking for documents from the US Attorney for the Eastern District of New York on May 4, Insider first reported.

. . .

The company’s advertising and prescribing practices have been under scrutiny by medical professionals, regulators, and social media platforms over the past few months. It pushed ads to Meta and TikTok linking ADHD to obesity, which the platforms pulled for being misleading. Experts said other ads overstated the benefits of ADHD medications and tied vague symptoms to the condition. Nurse practitioners working for Cerebral told The Wall Street Journal they felt pressure to prescribe ADHD medication after a short video call.

Cerebral apparently issued this statement at the same time all of this was made public. Cerebral will now put a pause on controlled substance treatment and change how it markets. It doesn’t appear that Cerebral is a ketamine telehealth provider per se. That said, this creates some potential ripple effects for ketamine telehealth providers.

First, the feds have spent tons of resources going after alleged over-prescribers in recent years, spurred in large part by the opioid crisis. Those resources will now go after telehealth providers. And depending on the ketamine telehealth provider, doing so may not be as difficult to the extent they have large online presences and engage in aggressive marketing.

On that note, the federal government is scrutinizing telehealth marketing services. This isn’t news per se, but keep in mind that many ketamine telehealth providers also advertise on social media or in other online media (even if social media platforms regulate/prohibit these ads). Anything that they say is in the public record. As the saying goes, what you say can and will be used against you.

Also in terms of the public record, the government was apparently influenced by a former executive’s lawsuit alleging improper over-prescription. The former executive appears to claim that the company had 2,000 duplicate addresses – what the suit claims to be hallmark evidence of duplicate prescription. This is important (1) because it shows again that dirty laundry can lead to prosecutions, and (2) because if true, the government may believe that Cerebral at least should have had reason to suspect foul play. All of this can be true for ketamine telehealth providers as well.

On the other hand, from the public record, the allegations appear to relate to over-prescription. It’s hard to know from this reporting whether the federal government will target all online telehealth services or whether this telehealth provider allegedly did something that the DEA found particularly troublesome.
Finally, Cerebral appears to have involved schedule 2 narcotics. Ketamine is a schedule 3 narcotic, which is deemed less dangerous and addictive under the Controlled Substances Act. It’s hard to say whether the level of scheduling here had any impact on the DEA’s decision.
All in all, the Cerebral announcement has some important potential ramifications for ketamine telehealth providers. It remains to be seen whether this will be a one-off case or whether the federal government will focus more efforts on ketamine telehealth providers in the future. Stay tuned to the Psychedelics Law Blog for more updates.