"There has been a growing interest in the acquisition and sale of telehealth providers. While the COVID-19 pandemic may have laid the foundation, a recent wave of success for online compounding pharmacies producing weight loss drugs has enhanced the interest in telehealth companies. Such telehealth companies are focusing on “diseases du jour,” some of which have drawn negative attention from lawmakers over their potentially misleading advertising and prescribing practices. Given the recent interest by the Criminal Division of the Department of Justice in compliance-related due diligence, private equity and venture capital companies interested in telehealth companies must ensure that they perform adequate due diligence prior to the purchase of the company, have an adequate and appropriate compliance plan and, if appropriate, voluntarily self-disclose any misconduct they become aware of to avoid criminal charges.
The potential sale of a telehealth company involves the review of a variety of legal and regulatory considerations relating to privacy, practice of medicine, and marketing. This article briefly discusses each of the above in the context of state and Drug Enforcement Agency requirements, Federal Trade Commission expectations, and Food and Drug Administration recommendations. Finally, we review recent telemedicine-related enforcement actions by the Department of Justice.
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