Telehealth: ‘Cowboy behaviour a threat to patients’

Popular telehealth providers are being ­labelled ‘nothing but online pharmacies’ intent on circumventing Australia’s strict advertising and drug regulations in the relentless pursuit of profit.

Tim Doyle, the founder of Eucalyptus. Picture: John Feder/The Australian.

Some of Australia’s most popular telehealth providers are being ­labelled “nothing but online pharmacies” intent on circumventing Australia’s strict advertising and drug regulations in the relentless pursuit of profit.

There are calls from within parliament for a specific telehealth regulator as digital health industry insiders speak out about the practices of aggressive health start-ups they are accusing of “cowboy behaviour that’s endangering patients” including manufacturing a copycat formula of the popular weight-loss drug Ozempic in compounding pharmacies and distributing it to thousands of patients.

The Therapeutic Goods Administration is moving to try to ban the practice of supplying ­patients with sodium salt semaglutide manufactured in compounding pharmacy laboratories. Compounded medications, normally provided only in rare, highly individualised cases, are exempted under legislation from usual drug regulation mechanisms. The TGA is trying to have copycat semaglutide carved out from the exemption.

Commercial telehealth company Eucalyptus, which has 20,000 patients pursuing weight loss on the books of its online provider Juniper, is suppling salt semaglutide to a large number of those individuals, saying it can’t get supply of Ozempic.

“The nature of those drugs, in terms of them being untested, unproven potentially, we don’t know what their safety profile is, we don’t know what’s in them,” said Robyn Langham, TGA’s principal legal and policy adviser.

“And certainly in the US, it’s been established that clearly these drugs are different. So we don’t have any notion of safety, quality or efficacy and these drugs are being now distributed on a very, very large scale.”

Pharmaceutical giants, who are being cut out of the supply process, are also warning of potential dangers. Big pharma is subject not only to high manufacturing quality requirements, through approvals processes for drugs but also extremely rigorous post-market scrutiny and adverse event reporting requirements, none of which applies to compounded drugs.

“I think that the danger for any compounded drug is that it may not have the same safety, quality and efficacy as a drug approved by the regulatory body,” said Tori Brown, general manager of pharmaceutical company Eli Lilly Australia and New Zealand. “And so you do not know what’s in there, which can expose patients to really serious health risks.”

Australia’s commercial telehealth industry has expanded rapidly since the pandemic, when regulations were eased and online doctor consultations were normalised, opening a massive business opportunities for technology start-ups.

The industry brings in revenue of almost $500m a year and has transformed medicine, but many in the industry have grown alarmed at the section of the sector that has set up “closed loop” prescription models that prescribe and dispense drugs through partner pharmacies. Critics allege the model is riven with perverse incentives to prescribe drugs, which provide these businesses with their greatest profits.

“I hold great concern about the possibility of overprescribing and inappropriate prescribing,” said federal Labor backbencher ­Michael Freelander, who has singled out for particular concern ­telepsychiatry services charging eye-watering amounts of money to assess and diagnose ADHD.

“These services have a vested interest in overdiagnosis. I think there needs to be better transparency and better limits on what can be telehealth. I’m not saying commercial telehealth should be banned. But the way it’s happening now with the closed loop prescription model through pharmacy, it just means that it is completely open to exploitation,” Dr Freelander said.

“I think there needs to be a telehealth regulator they can have oversight over consultations, see what’s happening on the ground, and collect data.”

The Medical Board of Australia has already moved to crack down on consultations that take place entirely by email or online quiz with no contact at all with a doctor. Some telehealth providers are continuing to push the boundaries of advertising laws, which ban the direct advertising of medicines.

Juniper charges $275 a month for a subscription that includes the supply of compounded salt semaglutide. It is charging patients the same as when it was previously supplying patients with Ozempic, which was around three times the wholesale cost to the company.

Eucalyptus’s Tim Doyle said criticisms that telehealth outfits such as Juniper were focused on profit over patients were absurd and amounted to irrational fears of a “commercial bogeyman” in healthcare. He emphasised the comprehensive digital healthcare provided by the company, that ­included access to dietitians and exercise programs via an app.

“Practitioners make decisions around prescribing, the patient has a choice around routing, and then pharmacies have a responsibility for fulfilment. And we make money by connecting all of those parties. I just don’t see how that is fundamentally different to a radiology facility being included in a GP clinic,” Mr Doyle said.

The compounded semaglutide was rigorously tested by major universities who declared it safe and equivalent to Ozempic.

But industry insiders say what is occurring in this section of the commercial healthcare market, driven by tech entrepreneurs and marketing gurus, has not been seen before in Australia. Mr Doyle made his name marketing Koala mattresses and has now applied the e-commerce model to healthcare.

“We’ve never been more medicated, and depressed and chronically diseased in our lives,” said Melbourne doctor and strategist Mei Ling Dorey.

“Big tech strategy leads with ­dimensioning areas of human vulnerability and weaponising that insecurity.

“There are multiple risks and consequences for people. We are eroding the fundamental tenets of safe, independent, upstream primary care.”

Healthcare entrepreneur Romain Bonjean, an investor and ­adviser to early-stage technology businesses and the chief executive of digital health platform RoseRx, said the heavy investment of venture capital partners in these online start-ups had further driven the relentless pursuit of profits. Mr Bonjean previously founded the healthcare technology platform Rosemary, which also delivered asynchronous text-based healthcare, but he became disillusioned with the model and its in-built perverse incentives.

“This is a story of greed,” Mr Bonjean said.

“Australian venture capital over invested in these players as a miracle, high-growth company. This over-investment at the top of the market has created an indispensable need to make the business work at very high valuations.”