Done executives allegedly ‘conspired to defraud pharmacies and Medicare’ by providing stimulants that weren’t for legitimate medical reasons.
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Ruthia He, the founder and CEO of the subscription-based “digital health company” Done, and the company’s clinical president, David Brody, “exploited emergency flexibilities during the [covid-19] public health emergency to provide easy access to Adderall and other stimulants that were not for a legitimate medical purpose,” the Department of Justice claims.
The two executives were arrested and indicted for distributing controlled substances, conspiracy to commit healthcare fraud, and other charges. This is the first time the DOJ has charged someone with criminal drug distribution related to their involvement in a telehealth company. The DOJ and DEA began investigating Cerebral, another telehealth company, in 2022. Four months after news of the Cerebral investigation went public, The Wall Street Journal reported that the DEA was also investigating Done.
According to the indictment filed on Thursday in California’s Northern District, He and Brody “conspired to defraud pharmacies and Medicare” by prescribing Adderall and other stimulants to patients who didn’t have ADHD.
“As alleged in the indictment, the defendants provided easy access to Adderall and other stimulants by exploiting telemedicine and spending millions on deceptive advertisements on social media. They generated over $100 million in revenue by arranging for the prescription of over 40 million pills,” Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, said in a statement.
Before the pandemic, the ability to issue prescriptions online was limited by the Ryan Haight Online Pharmacy Consumer Protection Act of 2008, which required medical practitioners to have at least one in-person medical evaluation with a patient before prescribing them any controlled substances. In 2020, the Drug Enforcement Administration implemented temporary exceptions to the Ryan Haight Act — which, charging documents claim, Done executives took advantage of, issuing more than 40 million prescriptions since 2020.
According to charging documents, He, who formerly worked at Meta, made “false and fraudulent representations that Done was a successful business prior to the pandemic” when the company had, in fact, not generated any “material revenue” before 2020.
He and Brody claimed Done could accurately diagnose ADHD with shorter appointments because its screening process weeded out people who were unlikely to have ADHD, the indictment says. But the company also used “deceptive social media advertisements” emphasizing the ease with which Done members could get Adderall prescriptions to intentionally target “drug-seeking patients,” charging documents claim. For a monthly fee, Done offered patients diagnosis, treatment, and refills of ADHD medication, including Adderall.
According to the indictment, He, Brody, and others hired doctors “who they believed were not overly concerned about drug-seeking patients” to issue Adderall prescriptions. Done had a no-follow-ups policy, charging documents claim, and paid doctors on patient load rather than time spent with patients. Instead of requiring subsequent appointments for refills, Done had an auto-refills policy, according to the DOJ. “The purpose, as R. He wrote, was to ‘use the comp structure to dis-encourage follow-up,’” the indictment claims. These allegedly lax prescription policies not only generated hundreds of millions in revenue for Done but also led to overdoses and the death of at least one patient, the DOJ alleges. According to the complaint, one Done member described the company as a “straight up pill mill.”
The complaint also alleges that after media reports claimed Done “made Adderall and other stimulants too easy to obtain” and a grand jury subpoenaed another telehealth company, He and Brody began “altering, destroying, and concealing records and documents” and using encrypted messaging platforms and their personal email accounts instead of their company emails.
If convicted, He and Brody each face up to 20 years in prison. Done did not respond to The Verge’s request for comment.
