Telehealth CEO charged in alleged $100 million scheme to provide "easy access" to Adderall, other stimulants
Federal prosecutors have charged the CEO and head doctor of Done Global — a telehealth company that distributes stimulant drugs to thousands of patients across the United States — with fraud in an alleged $100 million scheme to provide "easy access" to Adderall and other stimulants.
Ruthia He, the founder of Done Global, was arrested in Los Angeles on Thursday over allegations she participated in the distribution of Adderall over the internet, submitted false and fraudulent claims for reimbursements and obstructed justice, the Department of Justice said in a news release. David Brody, the company's clinical president, was arrested in San Rafael, California, on the same charges.
"They generated over $100 million in revenue by arranging for the prescription of over 40 million pills," said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department's Criminal Division, in the statement, adding these were the Justice Department's "first criminal drug distribution prosecutions related to telemedicine prescribing through a digital health company."
U.S. Attorney General Merrick Garland in a statement said the prescribed medications often had "no legitimate medical purpose."
Court documents allege that He and Brody prescribed Adderall and other highly addictive medications to patients who bought a monthly subscription through the company's platform. They are accused of targeting those seeking drugs with "deceptive advertisements." They are also accused of structuring the company's platform "to facilitate access to Adderall and other stimulants, including by limiting the information available to Done prescribers, instructing Done prescribers to prescribe Adderall and other stimulants even if the Done member did not qualify, and mandating that initial encounters would be under 30 minutes."
"The indictment alleges that the conspiracy's purpose was for the defendants to unlawfully enrich themselves by, among other things, increasing monthly subscription revenue and thus increasing the value of the company," the Justice Department said.
Done Global is accused of prescribing ADHD medications when they were not medically necessary to numerous patients, the statement said. Once the patients bought the monthly subscription, court documents alleged, the platform set up an "auto-refill" function that allowed subscribers to elect to have a message requesting a refill be auto-generated every month.
Court documents alleged Done sought to "use the comp structure to dis-encourage follow-up" medical care by refusing to "pay Done prescribers for any medical visits, telemedicine consultation, or time spent caring for patients after an initial consultation, and instead paying solely based on the number of patients who received prescriptions."
Court documents alleged that even after He and Brody had been made aware of how easy it was to access the stimulants and that "members had overdosed and died," the company continued to persist in its methods. The executives also conspired to defraud pharmacies, Medicare, Medicaid and other insurers, court documents alleged.
The Centers for Disease Control and Prevention issued an alert Thursday afternoon warning public health officials, clinicians, patients, their families and caregivers about a possible disruption stemming from the indictment. "A disruption involving this large telehealth company could impact as many as 30,000 to 50,000 patients ages 18 years and older across all 50 U.S. states," the alert said.
Done was launched two years ago, according to the company's website, as a "passion project to help friends, coworkers, and loved ones struggling to access mental health care."
Members pay a monthly fee of $79 to access psychiatric board-certified medical professionals on the platform, and other resources that help patients with ADHD, the website says. It costs $199 to start a membership with the company.
Done Global did not immediately reply to a CBS News request for comment. The website is still functioning and the company has not clarified if it will continue its operations. The Justice Department urged Done patients or medical professionals involved in the alleged illegal activity to report the conduct to the DEA hotline.
He and Brody each face a maximum penalty of 20 years in prison.
Cara TabachnickCara Tabachnick is a news editor at CBSNews.com. Cara began her career on the crime beat at Newsday. She has written for Marie Claire, The Washington Post and The Wall Street Journal. She reports on justice and human rights issues. Contact her at [email protected]
