Cerebral, a startup that provides prescriptions for ADHD treatments online, has grown rapidly by advertising on SNS.
Startup Cerebral Soared on Easy Adderall Prescriptions. That Was Its Undoing. --WSJ
https://www.wsj.com/articles/cerebral-adderall-adhd-prescribe-11654705250
Cerebral co-founder Kyle Robertson was born in Cincinnati , Ohio to parents of a psychiatrist and a psychotherapist, and said he had suffered from mental health problems when he was young. So, in 2018, he dropped out of the master's program at the University of Pennsylvania and teamed up with Ho Anh, a doctor who worked at Hims & Hers Health Inc , a startup that sells ED treatments by online reservation, and has mental health problems. Cerebral was founded as a startup that provides prescriptions to people online.
Initially founded, Cerebral offers customers a subscription service for a 'medicine management plan' for $ 85 per month (about 9300 yen at the rate at that time), and 30 minutes with a nurse practitioner who is allowed a certain level of medical care. We conducted an online interview with the company and developed a business model for prescribing prescriptions such as Lexapro (escitalopram) , which is a common antidepressant drug. However, with this model, many customers cancel their subscriptions in about three months, so as of May 2020, monthly sales were about 300,000 dollars (about 33 million yen at the rate at that time). That. As a result, it seems that the cost of advertising expenses on social media could not be recovered, and Cerebral was looking for some other source of revenue.
What happened there was a pandemic of the new coronavirus infection (COVID-19). Due to the effects of the blockade of the city and other factors, the problem of 'patients with mental health problems cannot see doctors directly' has arisen, and the federal government has eased restrictions on the medicines that can be prescribed in online medical care. It also contained ADHD treatment Aderal (Adderall) , which contains amphetamine , which has a strong stimulant effect, and is designated as a controlled drug.
Adderall is a popular drug not only as a treatment for ADHD, but also as a ' smart drug ' that enhances concentration and helps to eliminate drowsiness. Cerebral plans to start ADHD treatment as early as June 2020, and said that it was appealing that it would be possible to make a large profit by starting the prescription of Adderall.
Cerebral, which officially launched ADHD treatment in March 2021, discovered that Adderall's prescriptions could lead to long-term subscription customer acquisition. In a later investor presentation, Cerebral said, 'Patients with ADHD are more valuable than those with depression and anxiety disorders.'
By the fall of 2021, Cerebral has nearly 100,000 paid subscription users and has grown to about 2,500 employees. In 2021, sales were 10 times higher than the previous year to 100 million dollars (about 11 billion yen at the rate at that time), and the valuation was 4.8 billion dollars (about 530 billion yen). In addition, prescriptions for ADHD patients accounted for 20% of sales.
Robertson hastened to hire clinicians to keep up with demand, and at some point instructed him to hire 200 clinicians a week. Diagnosis and treatment of ADHD and bipolar disorder was more complex and difficult than depression and anxiety disorders, so it was necessary to hire a psychiatric mental health nurse practitioner (PMHNP) with special training in psychiatry. However, it turns out that Cerebral also hired a number of nurse practitioners who were not qualified for PMHNP. He also hired a nurse practitioner who had been convicted of money laundering the previous year and was refraining from imprisonment, as well as a person whose doctor's license was stripped in some states.
In addition, Cerebral plans to increase the marketing budget by 10 times from 2020 to 2021, and from January to May 2022, Tik Tok alone invested 13 million dollars (about 1.6 billion yen) in advertising expenses. And that. Advertisements posted on SNS by Cerebral claim that 'treatment of ADHD prevents overeating and obesity', and promote treatment by arranging features that apply to many people such as 'drowsiness, forgetfulness, and chatter' as symptoms of ADHD. It has been accused of preying on young people. Instagram and TikTok have already removed some of these ads as violating the policy.
TikTok allows 'advertising to recommend self-diagnosis and treatment of ADHD' that preys on young people --GIGAZINE
After all, Cerebral's ads attracted a lot of people and flooded with tens of thousands of users in more than 20 states, some of whom were clearly not ADHD but wanted medicine. Originally, the average psychiatrist would need at least 90 minutes of research to determine if the patient really had ADHD, but Robertson refused to extend the consultation hours because of rising costs and system disruptions. It has been reported. A former employee also pointed out that Robertson wanted to prescribe Adderall to more ADHD patients.
Cerebral was a fast-growing layoff, but after the Federal District Prosecutor's Office in eastern New York launched an investigation in May 2022 on suspicion of violating the Controlled Substances Act, the board of directors resigned Robertson as CEO. There is a dark cloud, such as revealing plans to lay off (temporarily dismiss) employees in New York. In the same month, it announced a policy to stop prescribing controlled drugs to new patients.
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