What the remote prescribing extension means for investors
Illustration: Gabriella Turrisi/Axios
The U.S. is allowing providers to prescribe certain controlled substances via telehealth through the remainder of the year.
Why it matters: Even with the extension of the telemedicine flexibilities, investors continue to navigate an uncertain policy future.
What they're saying: "There's a general investment and M&A caution with respect to telemedicine prescribing entities of controlled substances, and it's likely that reticence will continue," says Flare Capital partner Bill Geary.
Catch up quick: The flexibilities began during the COVID-19 pandemic.
- The Drug Enforcement Administration announced the fourth extension last week in partnership with the Department of Health and Human Services.
- DEA said it had previously received numerous comments from patients, providers, and other stakeholders warning that the expiration of flexibilities could abruptly limit patients' access to care.
The intrigue: Certain companies offering virtual opioid use disorder treatment and some behavioral health providers would have had to fundamentally alter their businesses, for example.
Context: Payers, patients and companies alike could benefit from consolidation and new care models that blend virtual and in-person care, Bicycle Health CEO Ankit Gupta says.
- However, he admitted some investors are hesitant to fund those models and make large-scale deals, given the uncertainty.
- One source with knowledge of multiple companies' plans says a permanent policy would make it easier for early-stage companies to get venture capital funding.
Friction point: Stakeholders are split on whether the DEA will continue to extend the current flexibilities or attempt to issue a final rule. The DEA did not respond to a request for comment.
- Orrick partner Jeremy Sherer says it's possible that the DEA will require in-person exams, so companies should at least have hybrid workflows on the table as they plan for 2027 and beyond.
The bottom line: Critical questions remain, but every extension gives investors more confidence, Gupta says.
