Digital health startup turned bicycle pivot after DEA proposal

“The challenge they face is figuring out how to quickly transform the models they built and scaled so quickly during the pandemic, so they can survive and thrive in the post-pandemic landscape.” Can,” said Jeremy Sherer, Digital Health Company. Chair at the law firm Hooper, Lundy & Buchman. “Part of it is just the nature of startups. You have companies that succeed and companies that fail.

enter the dea

Losing the ability to remotely prescribe drugs would hurt these companies significantly, and the Drug Enforcement Administration has just that in mind.

dea proposed a rule In February it will reinstate the pre-pandemic requirement that patients visit physicians in person to obtain prescriptions for drugs such as Adderall and Ritalin (also known as methylphenidate) for ADHD and buprenorphine.

Under the draft regulation, 30-day prescriptions for Schedule III to Schedule V controlled substances will be available via telehealth, but patients will have to make an in-person appointment to receive a refill. Patients whose treatment begins before the end of the public health emergency can wait up to six months before physically visiting a prescriber under the proposal.

“It makes sense that the DEA would be trying to limit over-prescribing of controlled substances based on their mission and their current investigations,” said Libby Bane, partner at Fagre Drinkers Biddle & Reith, who specializes in health information technology law. specializes in Even as companies transition to hybrid models, the DEA will be suspicious of digital health companies prescribing controlled substances, she said.

pivoting operation

The comment period on the DEA’s proposal ended last Friday, leaving companies to wonder whether the agency will revise the rule to address their concerns. This uncertainty has companies questioning their next move. Candace Richardson, an investor in digital health start-ups at venture capital firm General Catalyst, said regulation will test the operational readiness of these companies.

“The advice I’m giving is have contingency plans, be prepared for change, figure out what changes you need to make it through to next year,” Richardson said.

Evans Roshste, founder and CEO of ReKlame Health, said he awaits the final rule. ReKlame Health, which launched in 2020, provides prescription services aimed at people of color with ADHD, depression, addiction and other conditions in New Jersey, New York and Florida.

Gray said Ophelia Health is making contingency plans, but leasing and staffing physical clinics isn’t possible for the company, which launched in early 2019 and has been operating exclusively via telehealth since the pandemic began. Is. He said that the first priority is to connect the existing patients with in-person visits. Looking ahead, the company will have to create a process for bringing on new patients, and is partnering with a network of DEA-registered providers, he said.

Gupta said Cycle Health has a physical location in each of the 32 states where it operates. But the company will have difficulty accommodating its 20,000 patients in person, and is encouraging them to visit primary care providers. For patients who do not have access, the company is partnering with local doctors.

Chief Medical Officer Dr. Brian Cleary said Bicycling Health expects to lose 5% of its existing patients and attract 20% fewer new patients as a result of the DEA regulation.

Done, an ADHD treatment provider founded in 2019, has made a push to open more physical offices, but real estate and labor costs are barriers, said Sean Arroyo, Done’s senior executive leader. The company expects to have 45 locations in 18 states this month and plans to open another 40 offices within two months, he added.

“In January, we started making a really hard push knowing this was going to be a change and started investing because you can’t turn things around in 30 days,” Arroyo said. To build, we need personnel working in the environment we’re operating in – it’s very expensive.

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