What Cerebral is facing as mental health startup mends reputation

  • Cerebral, once the fastest growing mental health startup, is at a defining moment.
  • Investigations and reports indicate that he harmed patients with the way he prescribed drugs.
  • Now he is pinning his future on improving care for people with serious mental illness.

A year ago, Cerebral was on the rise.

In December 2021, it raised $300 million in a funding round led by the SoftBank Vision Fund 2. It called itself the fastest growing mental health company. Worth $4.8 billion, the startup provided therapy and medication for conditions including anxiety, depression, and ADHD.

But Cerebral quickly collapsed. The startup faced scrutiny from as prescribed drugs with addiction potential, including stimulants like Adderall, online. The nurses told the media they felt pressured prescribing medications in visits that are too short.

Cerebral fought to care for people with severe mental illnessincluding bipolar disorder and schizophrenia, and sometimes prescribed potentially addictive drugs to patients who were vulnerable to abusing them, Insider reported in June.

It discontinued most prescriptions for such drugs and fired its founder, though it still prescribes certain controlled medications to treat opioid addiction, as well as non-controlled medications, such as antidepressants and antipsychotics. And the Drug Enforcement Administration and the Justice Department are looking into its prescribing practices, Insider first reported in May.

Now Cerebral is fighting for his survival. Its future is in the hands of its new CEO, Dr. David Mou, who has been with the company since 2021 as chief medical officer. While the company has blamed ousted CEO Kyle Robertson for its problems, Mou, a Harvard-trained psychiatrist, was in charge of ensuring the quality of Cerebral’s care at the height of its prescribing woes.

In a statement to Insider, a Cerebral spokesperson said the company is not fighting for its survival and its doctors are not fighting to care for their patients.

He added that Cerebral is advancing behavioral health by incorporating technology, such as measuring clinical outcomes through surveys.

Cerebral bets its future on a difficult task

Dr. David Mou from Cerebral.

Cerebral CEO David Mou.


Mou said in November that the company was betting its future on a much more difficult task than the prescription that turned it into a unicorn: improve care for vulnerable patients with severe mental illness. To accomplish this, Cerebral is hiring more nurses with psychiatric training and has developed a tool to detect suicidal content in patient messages, she said.

As part of the change, Cerebral laid off 20% of its workers and closed some lines of business.

However, treating complex patients has historically been a challenge for Cerebral.

Well-informed person reported in june that Cerebral enrolled patients with complex conditions, such as bipolar disorder, and assigned them to physicians who lacked sufficient training, supervision, and support to treat them. The report was based on a review of 2,060 company incident reports, interviews and other internal documents.

The spokesperson said that while Cerebral is committed to providing high-quality care to all of its patients, especially the most vulnerable, the majority of its patients are people with mild to moderate depression and anxiety.

Sometimes these doctors inadvertently prescribed risky drugs, leading to missed side effects, hospitalizations and confusionthe investigation indicated. Some Cerebral doctors told Insider they felt uncomfortable treating the patients assigned to them and felt their licenses were at risk.

Cerebral said its providers exercise their own independent clinical judgment and have sufficient training, supervision and support. That includes access to UpToDate, a decision support resourceand the option to consult with company psychiatrists on patient cases.

“No doctor should treat a patient if they feel uncomfortable doing so, which Cerebral has made clear to its doctors,” the spokesperson said in the statement.

Mou oversaw some of the practices that got Cerebral in trouble, such as encouraging doctors to prescribe Adderall widely, internal documents reviewed by Insider suggested.

In addition, Robertson has said that Mou “was responsible for the very prescription policies that the government is currently investigating,” according to a leaked letter he sent to Cerebral in November.

Many mental health startups online avoid treating patients with severe mental illness. Without a physical presence, it’s difficult to do without, it’s expensive, and there are already established community mental health providers who have close relationships with local behavioral health authorities and Medicaid agencies, said Steve Ramsland, CEO of Catalyst Health Resources. , where he advises digital mental health companies.

“Part of me wants to applaud the innovators for wanting to tackle tougher patients and make improvements for people with severe mental illness,” Ramsland said. But he added that “I have a hard time seeing how a pure telehealth company that provides psychiatry, pharmacy, therapy and care management services can really be successful” in treating these patients.

In recent years, highly funded startups have tried to disrupt mental health care. and fought. Cerebral’s next steps will dictate its future, and its history could influence the future of online mental health care.

A box of three medicine bottles labeled Cerebral rests on a wooden surface.

A box of medicines from Cerebral.


Cerebral can’t shake his past

Cerebral launched in 2020 and was one of the few online mental health startups to take advantage of a temporary change that allowed online prescriptions for highly regulated substances. The ability to prescribe medications such as Adderall turbocharged they are business.

But as concerns about their prescribing practices grew, some major health insurers severed ties with Cerebral. Some pharmacies, including his preferred pharmaceutical partner, Truepill, have stopped filling his prescriptions for controlled substances. The The DEA in December moved to revoke Truepill’s license to fill prescriptions for controlled medications. Cerebral still works with many insurers, the spokesperson said.

Now Mou is trying to burnish the startup’s reputation by promoting changes the company has made. But his involvement in Cerebral’s questionable prescribing practices has cast a shadow over those efforts.

In December 2021, Mou signed a Program aimed at increasing stimulant prescriptions, in part by emailing doctors and asking them to re-evaluate cases in which they had not prescribed stimulants, according to an internal document recently reviewed by Insider.

The program was aimed at increasing, over a period of months, the percentage of ADHD patients without other medical conditions treated with stimulants to “nearly 100%” from 52.7% in November 2021, according to the document.

Mou has defended the practice of prescribing stimulants to patients with ADHD, as they are considered first-line treatments.

Earlier in the year, the company found that ADHD patients treated with stimulants were signing up for Cerebral for longer periods than other patients, according to a slide from a July 2021 internal presentation recently reviewed by Insider.

“Consider expanding ADHD more quickly,” the slide says.

There were consequences to Cerebral’s push toward controlled drugs and his decision in May to stop prescribing them.

A former Cerebral provider told Insider that the ban was frustrating because many patients who were getting better on the drugs lost access to care at Cerebral. He worked to connect more than 100 of them with other resources, like local clinics.

Doctors who worked for the company are still dealing with the fallout. Some have had trouble getting their prescriptions for controlled substances filled at certain pharmacies because of their past or current affiliations with the startup, two of them told Insider.

Cerebral programming system is displayed on the screen of a phone

Cerebral’s mental health platform.


A crossroads for Cerebral and the healthcare industry

Cerebral problems have become a lesson in pursuing growth at the expense of patients. Investors and industry watchers told Insider that the events at Cerebral inspired more caution.

“There was too much exuberance, too much seeking capital, too many undifferentiated companies,” Eric Larsen, president of The Advisory Board Company, a healthcare consulting firm, told Insider. He said it’s getting harder for companies to raise money, forcing them to pull out or merge with rivals.

Some venture capitalists attribute Cerebral’s rise to an era when it was easier to raise funds and some big investors couldn’t properly vette the companies they backed. They say this period of cheap capital gave founders the upper hand in investment negotiations, and healthcare outsiders like SoftBank were quick to bet on and overprice startups.

Even so, traditional healthcare investors like Oak HC/FT have also backed Cerebral, and some are betting on it. other startups that have come under scrutiny about claims to put growth before patients.

As capital has become more expensive and mental health startups proliferate, being good at practicing medicine is the best way to stand out now, Michael Yang, managing director of OMERS Ventures, told Insider.

Dr. Caroline Carney, president of the behavioral health arm of health insurer Magellan Health, said there needed to be more federal oversight of the online mental health space.

“The spotlight has been on Cerebral because they have or have had a real problem,” Carney said. “But the larger question we should be talking about is what is quality behavioral health care. What does that mean and how are we going to measure or monitor it?”

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