SAN FRANCISCO — Two California-based healthcare technology executives were convicted Tuesday by a federal jury for illegally distributing Adderall online by building a billion-dollar company that provided “easy access” to more than 40 million Adderall and other stimulant pills for a monthly subscription fee, prosecutors said.
Ruthia He, founder and CEO of healthcare company Done, and David Brody, clinical president of Done, were each convicted of four counts of distributing controlled substances, one count of conspiracy to distribute controlled substances and one count of conspiracy to commit healthcare fraud, according to a news release from the U.S. Attorney in the Northern District of California. He was also convicted of conpiracy to obstruct justice.
He and Brody conspired to commit healthcare fraud by submitting fraudulent insurance claims so that Done members could dispense Adderall at pharmacies while continuing to pay their membership fees — resulting in $14 million in payouts from insurance companies, prosecutors said. The false claims said that Done did urine drug screenings, stated that non-stimulant drugs had been tried prior to stimulants and used the DSM-5 to diagnose ADHD.
“Not all drug dealers operate in the shadows or on street corners,” U.S. Attorney Craig H. Missakian for the Northern District of California, said in the press release. “Some, like Ruthia He and David Brody, use computers and social media instead. Doctors take an oath to do no harm. David Brody and other doctors were only too willing to sell their integrity to He and put money ahead of patient wellbeing.”
“Medical necessity must always drive the decision to prescribe controlled substances like Adderall and other stimulants,” Missakian added. “Ruthia He and David Brody violated that core principle when they exploited telehealth rules to push prescription medication, and hurt patients in the process. This prosecution marks the beginning of a sustained effort. Digital health companies that engage in unlawful drug distribution should take notice that they will not escape accountability.”
Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division said in the release that the $100 million scheme included deceptive advertising, targeting drug seekers and prioritizing profits over patient care.
“This verdict sends a clear message that the Criminal Division will hold accountable criminals who attempt to exploit telehealth to write illegal prescriptions for their personal gain,” Galeotti said. “Innovation in health care must never come at the cost of patient safety, professional integrity, or the rule of law.”
Prosecutors said that Done and He spent $40 million on deceptive social media advertising seeking to “convince Americans challenged by a lack of structure during the COVID-19 pandemic that they were suffering from ADHD.” The defendents also targeted advertisements with certain keywords searched by those trying to get Adderall without a legal prescription.
The defendents also limited initial appointment times to half the length of usual psychiatric examinations and declined to pay for follow-up treatment, prosecutors said.
He and Brody also developed “auto-refill” technology that provided refills through an auto-generated monthly email, which in some cases provided prescriptions for dead patients, prosecutors said.
Even in some cases in which family members expressed concern that patients were experiencing mental health conditions, such as bipolar psychosis induced by Adderall, He and Brody prohibited clinicians from stopping their prescriptions, prosecutors said.
Nurse practitioners were paid up to $60,000 per month to provide refill prescriptions without any interaction, prosecutors added. Luxury electric cars were given to employees who broke the law, and employees were told to continue giving Adderall prescriptions to patients who were abusing other drugs — despite the risk of going to jail. He also told employees that technology companies that are successful profit off of addiction.
Prosecutors added that the defendants previously claimed that Done was run by independent clinical leadership, but that internal documents revealed that He, who was not a medical professional, approved the clinical practices and that the company offered second opinions to patients who had been denied Adderall prescriptions.
He also attempted to move the company’s operations to China and deleted incriminating documents, as well as taking other steps to hide the company’s actions. He moved more than $1 million to a shell company based in China and was stopped by law enforcement attempting to leave the United States, prosecutors added.
He and Brody could face up to 20 years in prison for the charges related to controlled substances, prosecutors said. Their sentencing is set for Feb. 25.
“The fraudulent acts of He and Brody led to clients’ substance abuse, addiction and, in some cases, overdose. Instead of putting the care of their customers first, they prioritized their own greed by fraudulently prescribing more that $100 million worth of Adderall and other stimulants. These were shameful acts, and a jury of their peers agreed. Both He and Brody will now face the consequences of this egregious fraud,” Special Agent in Charge Harry T. Chavis of IRS Criminal Investigation New York said in the press release.