Cerebral: Former Exec Files Lawsuit Against Online Mental Health Provider over Alleged ADHD Drug Strategy

April 29, 2022

A former executive at Cerebral, a well-funded online mental health startup, claims in a labor lawsuit that the company fired him after he complained that the company was too quick to prescribe powerful stimulant drugs.

Matthew Truebe, former vice president of product and engineering at Cerebral, claims that the company "egregiously put profits and growth before patient safety," including overprescribing medications for attention deficit hyperactivity disorder (ADHD).

The lawsuit, filed Wednesday in California state court, alleges that Cerebral planned to increase customer retention by prescribing stimulants to 100% of its ADHD patients.

In a statement, Cerebral executives said they would not comment on the specifics of pending litigation. "But we believe that the claims alleged in the complaint are without merit. We intend to vigorously defend this matter," the company said.

These allegations come amid new scrutiny of online mental health providers that surged in popularity during the pandemic as demand for services grew.

The Wall Street Journal reported in March that some clinicians working at startups like Cerebral and Done felt pressured to prescribe stimulants like Adderall to patients even though they said the company’s 30-minute patient evaluations weren’t long enough to properly diagnose ADHD.

The Wall Street Journal also reported this week that some of the nation’s largest pharmacies, including CVS Health, Walmart and Walgreens, have blocked or delayed prescriptions over the last year from clinicians working for Cerebral and Done Health, another online mental health company.

The pharmacies in certain cases have expressed concerns that clinicians at Done Health and Cerebral are writing too many prescriptions for Adderall and other stimulants, the Journal reported, citing people familiar with the issue.

The digital mental health space was growing rapidly even before the COVID-19 pandemic, but stress and anxiety brought on by the health crisis have accelerated demand for virtual behavioral health services. But with the market growing rapidly, some experts worry that digital mental health tools may not deliver what they promise.

“There is still much we do not know about how the tech part works and for whom,” said John Torous, M.D. director of the digital psychiatry division at Beth Israel Deaconess Medical Center and an associate professor of psychiatry at Harvard Medical School.

“With direct-to-consumer advertising and marketing, companies will sometimes exaggerate what these apps can do. They will take a small pilot study and extrapolate that it can work for huge populations,” Torous, whose research focuses primarily on direct-to-consumer apps, told Fierce Healthcare last year.

Allegations of overprescribing at Cerebral

Truebe, who was hired in February 2021 as vice president of product and engineering, also accused the company of trying to “cheat” him and other employees out of stock options.

Cerebral offers monthly subscriptions for medication and therapy for mental health conditions, including ADHD, anxiety and depression.

The startup launched in January 2020 and has grown rapidly, propelled by increased demand for behavioral healthcare services during the COVID-19 pandemic. The San Francisco-based company banked $300 million in a series C round in December, boosting its valuation to $4.8 billion.

In the lawsuit, Truebe claims Cerebral leadership ignored serious concerns that he raised. For instance, he told higher-ups that he had found more than 2,000 duplicate shipping addresses in the patient database, suggesting customers were setting up multiple accounts to obtain additional medication. Truebe said he reported the findings to Cerebral CEO Kyle Robertson and other executives but they took no action, and Robertson said the issue was his "lowest priority."

As VP of product and engineering, Truebe led the company's technology department, including product management, application design, software engineering, IT security and data. 

Truebe also said Robertson directed him to “devote zero percent (0%) of his technology resources to compliance” and to focus on new patients and retention, according to the complaint.

Robertson also allegedly asked employees to track customer retention rates for ADHD patients who were prescribed stimulants versus those who were not. Later, Robertson “directed Cerebral employees [to] find ways to prescribe stimulants to more ADHD patients to increase retention,” according to the complaint.

Chief Medical Officer David Mou said in a later meeting that the “goal was to prescribe stimulants to 100% of Cerebral’s ADHD patients," the lawsuit alleges.

Truebe also raised concerns with leadership about potential data security problems. The company failed to take action when he reported that tens of thousands of confidential patient records had been compromised in a security breach, the lawsuit states.

Cerebral management also failed to adequately address patient safety issues, the lawsuit claims. When a patient safety issue, such as an overdose or suicidal thinking, is reported to Cerebral, the issue is supposed to be documented. Then, Cerebral's healthcare professionals are supposed to follow up, particularly if the issue is serious.

On many occasions, Cerebral failed to address these incidents in a timely manner and sometimes failed to respond at all, and leadership ignored Truebe's concerns, the complaint states.

The former VP says the company retaliated against him for opposing these "unlawful practices" by ordering him to sign an amendment to his employment agreement that would have retroactively cut his stock options in half and prohibited him from talking about compliance or patient safety issues.

Truebe claims that when he raised concerns about signing the agreement, executives gave him a negative performance evaluation, placed him on administrative leave and then fired him one day before his options vested.

The ousted co-founder of Modern Health, a company that provides mental health services as an employee benefit, also leveled serious allegations that the company misrepresented its capabilities, such as the size of its provider network, to potential customers and investors. Erica Johnson, who helped launch the startup, sued the company and co-founder Alyson Watson for wrongful termination, retaliation and defamation after she was fired in 2019. Johnson claims the alleged misrepresentation “puts at serious risk the lives and health” of Modern Health’s patients, according to the lawsuit.

Cerebral also has faced scrutiny for its treatment of employees. In the summer of 2021, Cerebral changed the contract status of more than 200 of its employees from salaried to hourly, while making benefits contingent on hitting certain quotas, Forbes reported.

Source: Heather Landi, “Ex-Cerebral executive files lawsuit claiming the startup overprescribed ADHD meds, Fierce Healthcare, Apr. 29, 2022. URL: https://www.fiercehealthcare.com/health-tech/former-cerebral-executive-files-lawsuit-alleging-unsafe-prescribing-practices