Cerebral, a fast-growing, digital mental health ‘unicorn’, faces a number of controversies tied to its business practices.
The company was sued last week by a former executive, Matthew Truebe, who served as vice president of product and engineering. Truebe alleges the company put profits before patient safety. In the lawsuit, he alleges Cerebral planned to increase customer retention by prescribing stimulants for attention deficit hyperactivity disorder (ADHD) to 100% of its patients. A Cerebral spokesperson denied the alleged claims.
Separately, a report in The Wall Street Journal alleged that Cerebral and another company, Done Health, were being scrutinized by national pharmacy chains, including CVS Health, Walmart and Walgreens, for their prescription practices. The story alleged the chains reportedly blocked and delayed some prescriptions from Cerebral and Done Health because the companies were over-prescribing Adderall. It also reported that online pharmacy, TruePill, paused fulfillment of Adderall and other controlled substances.
In a statement to Digital Health Business & Technology, a Cerebral spokesperson said, “We are not aware of any pharmacy blocking or rejecting prescriptions from Cerebral across the board and like any health care provider have prescriptions delayed or held on occasion for administrative reasons including insurance coverage and availability of the prescribed medication.” It also said that it has never “penalized, disciplined, or terminated clinicians for their clinical decisions.”
Here are six things to know about Cerebral.
1. Cerebral was founded in 2019 by CEO Kyle Robertson and chief medical officer Dr. Ho Anh. Robertson is a graduate of The Wharton School at the University of Pennsylvania where he founded a company called StartU, which information on alumni startups of top universities. In interviews, Robertson has said he started the San Francisco-based Cerebral because he had trouble accessing mental health treatment for his own anxiety and depression.
2. The company has been well funded. It has received $462 million in funding since its launch and is valued at nearly $5 billion. In December, it raised $300 million in a Series C round led by Softbank Vision. Other investors have included Prysm Capital, Access Industries, WestCap Group, ARTIS Ventures, Cold Start Ventures, Access Industries, Chris Burch, Liquid 2 Ventures, AirAngels and Oak HC/FT. Its Series A, B and C rounds came within 14 months of each other.
3. It partnered with Simone Biles. The Olympic gymnast signed on with the company in October 2021 as its chief impact officer, a ceremonial role where she will work with Cerebral to raise awareness around mental health challenges in underserved communities. Representatives for Biles did not respond to requests for comment regarding her role given the company’s recent controversies.
4. The company employs 4,500 full-time employees and contractors. It faces another lawsuit from a former contracted clinician who alleges the company violated California labor code laws, including failing to properly pay overtime and reimburse for business-related expenses. A company spokesperson declined to disclose the breakdown between contractors and full-time employees.
5. Cerebral is focused on the direct-to-consumer market. In February, the company said it had 420,000 members using its platform. The company invests heavily in social media marketing to obtain members. In January, Instagram and TikTok removed ads from the company for violating rules around ads depicting body-image shaming. The company’s ad claimed that obesity is “five times more prevalent” among adults with ADHD.
6. It announced a partnership with the National Health Service in the U.K. In February, the company said it was starting a program with Midlands Partnership NHS Foundation Trust, which provides services to the South Staffordshire area of England. The program will match young people with a therapist based on their preferences, according to a Cerebral news release. Representatives for the National Health Service didn’t respond a request for comment regarding its partnership given the company’s recent partnerships.