The US Drug Enforcement Administration just put Truepill on notice that it may revoke its ability to fill controlled substances, citing allegations that the online pharmacy startup unlawfully dispensed stimulants used to treat ADHD, including Adderall.
The Order to Show Cause requires that Truepill show evidence to justify its prescribing practices for controlled substances, which are highly regulated drugs. If the evidence isn't convincing, the pharmacy startup could have its DEA license revoked, which would leave the company unable to fill prescriptions for controlled substances.
It's the first public signal that the DEA is paying attention to the rise of companies profiting from online prescriptions for controlled substances.
Truepill filled controlled medications for multiple online mental-health startups that faced scrutiny for providing easy access to such drugs, including Cerebral. Truepill also created its own ADHD medication startup, called Ahead, before shutting it down in June 2022.
Truepill and Cerebral didn't immediately respond to requests for comment.
DEA alleges that stimulants were unlawfully dispensed
In a December 15 press release, the DEA alleges Truepill filled more than 72,000 controlled substance prescriptions, many of which were for stimulants, between September 2020 and September 2022.
In "numerous instances," the startup dispensed prescriptions that weren't issued for a legitimate medical purpose, the DEA alleges. The DEA said an investigation also found that Truepill filled prescriptions that exceeded the 90-day supply limits, or that were written by prescribers who lacked licenses in the relevant states.
Several pharmacies including Truepill and CVS moved to cease dispensing controlled-substance prescriptions from Cerebral, the mental-health startup under several federal investigations, in May.
Larry Cote, a former lawyer for the DEA who now advises healthcare companies on DEA compliance, told Insider that Truepill would have 30 days to respond to the order and could request a hearing before an administrative law judge. That judge will issue a recommended decision, and then the DEA administrator will issue a final order, which Truepill could appeal to federal court.
The entire process could take two years or more, Cote, who is not involved in the investigation or Truepill, said.
Cote said it's unusual for the DEA to issue press releases when it serves orders like this one, so it's clear the agency wants to send a message. The DEA has been vocal over the past few years that the abuse of amphetamines could be the next big prescription-drug abuse epidemic, he said.
Online pharmacies under scrutiny
The DEA's December order is a sign that the agency isn't just focused on the providers behind the risky prescriptions, but also the pharmacies that issued them.
"DEA will relentlessly pursue companies and pharmacies that seek to profit from unlawfully dispensing powerful and addictive controlled substances at the expense of the safety and health of the American people," DEA Administrator Anne Milgram said in a statement.
"The men and women of the DEA remain committed to ensuring that every American can access essential medicines when they are lawfully prescribed and dispensed," she added.
It's been a turbulent year for Truepill. The San Mateo, California-based startup has conducted four rounds of layoffs this year, with the most recent round reported by TechCrunch on September 29. Truepill told TechCrunch in an update that 20% of the startup's full-time employees were impacted by the cuts.
Truepill, which provides telehealth services in addition to prescription delivery, said in November that it landed an undisclosed amount of funding to focus on its core pharmacy business. Its previous round, a Series D, netted Truepill $142 million from Initialized Capital, Transpose Platform Management, and Quiet Capital in October 2021.
Do you have a tip about Cerebral that you want to share? Contact Blake Dodge (+1 252-241-3117) and Shelby Livingston (+1 843-412-6857), using the encrypted app Signal. Do you have a tip about Truepill to share? Contact Rebecca Torrence (+1 423-987-0320) using the encrypted app Signal.
Correction: December 16, 2022 — An earlier version of this story misstated the mental-health startups with which Truepill worked. It did not work with Done.
