Hidden ERISA Breach Could Trigger Litigation Wave, Part B/D Financial Engineering Creates Perverse Incentives, Telehealth ADHD Mill Founders Face Decades in Prison

Hey all,

Happy Thursday! Legal exposure has a remarkable way of clarifying what everyone’s been quietly ignoring. Mark Cuban just highlighted how employers profit from rebates paid by their sickest employees while a telehealth founder just got convicted for running what prosecutors called an Adderall distribution conspiracy. Seems the line between “innovative business model” and “federal crime” is thinner than some founders & excutives thought. 

Enjoy the rundown!

Jacob Brody (Co-Founder & CEO, ZorroRX)

(Drugstore Cowboy) PBM Rebates & ERISA Legal Risk

Mark Cuban’s viral LinkedIn post has thrown a spotlight on a hidden liability in the PBM system: employers quietly profiting from drug rebates paid by their sickest employees—an apparent breach of ERISA fiduciary rules. While some companies have already faced lawsuits and moved to transparent PBMs, a single successful employee lawsuit could ignite a tidal wave of litigation and force a reckoning across corporate America. Amazing how fast “we had no idea” turns into “get Legal on the phone” when personal liability is on the table. Full Article

(LinkedIn – Brooks Conway) Medicare Part B vs Part D Breakdown

A key insight from this analysis is that financial incentives differ significantly across stakeholders when it comes to whether drugs are covered under Medicare Part B (medical) or Part D (retail), especially as the Inflation Reduction Act (IRA) reshapes cost dynamics. Risk-bearing providers often prefer drugs to fall under Part D to avoid liability, while non-risk providers may benefit more from Part B due to favorable reimbursement spreads; meanwhile, Medicare Advantage and PDP plans face complex trade-offs in subsidies and cost exposure, and beneficiaries now see fewer financial downsides under Part D thanks to IRA’s out-of-pocket caps. Can’t help but imagine there are some very creative and lucrative games being played behind the scenes by MA plans, PDPs, and risk-bearing providers: Full Article.

(WSJ) ADHD Startup Founder Found Guilty in Adderall Conspiracy Case

Ruthia He, founder of telehealth startup Done Global, was found guilty alongside former top doctor David Brody of conspiring to distribute controlled substances, including Adderall, to over 100,000 patients through expedited and often insufficient evaluations. The federal case highlights growing scrutiny over digital health platforms and their role in the overprescription of stimulants amid rising ADHD diagnoses and drug misuse concerns; both defendants face potential decades-long prison sentences. This is exactly why ZorroRX has a strict “nothing that comes anywhere in the vicinity of risking a trip to jail” rule—because orange jumpsuits are not a brand color. Full Article