(Bloomberg) — Cerebral Inc., the SoftBank-backed mental healthcare startup, is being investigated for possible violations of the Controlled Substances Act, a spokeswoman said in an emailed statement Saturday.
“To be clear, at this time, no regulatory or law enforcement authority has accused Cerebral of violating any law,” the spokeswoman said.
“Cerebral intends to fully cooperate with the investigation.”
Cerebral received a grand jury subpoena from the U.S. Attorney’s Office for the Eastern District of New York on the evening of May 4, the spokeswoman said.
Earlier that day, Cerebral announced it would stop writing new prescriptions for drugs that treat attention deficit/hyperactivity disorder, such as Adderall and Ritalin.
The company is among a handful of startups that began prescribing controlled substances online after a regulatory rollback in connection with the Covid-19 pandemic.
John Marzulli, a spokesman for Breon Peace, the U.S.
Attorney for the Eastern District, declined to comment.
In a March report in Bloomberg Businessweek, former nurse practitioners for the company described a fear that Cerebral was over-prescribing the medications.
Then, in an April 27 lawsuit, a former executive alleged Cerebral’s chief medical officer had told employees the company’s goal was to prescribe stimulants to 100% of its ADHD patients as part of a plan to increase customer retention.
In a statement at the time, Cerebral said the allegations were not true, adding: “We plan to vigorously defend ourselves against these false and unfounded allegations.”
Earlier this week, the company announced that Margaret Miller, the chief financial officer, “will be leaving Cerebral later this month for other opportunities.” A statement said the decision was made “mutually” and “months ago.” She has removed references to Cerebral on her LinkedIn page.
(Adds no comment from U.S.
Attorney in fourth paragraph and CFO departure in last.)
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