I launched a ketamine startup but now feel obligated to speak out against the industry. Matthew Perry's death should be a wake-up call.

• Juan Pablo Capello co-launched a telehealth ketamine therapy service in 2021.
• But he now says the industry has become a wild wild west with low standards of care.

Ketamine-assisted therapy uses the hallucinogen, ketamine, to treat mental health issues. In a statement published on October 10, 2023, the FDA warned that the drug has not been approved by the agency for the treatment of any psychiatric disorder.

This as-told-to essay is based on a transcribed conversation with Juan Pablo Capello, cofounder of telemedicine startup Nue Life Health. Capello, 57, is calling on ketamine-assisted therapy providers to pause operations and elevate their standard of care. The following has been edited for length and clarity.

I'm a serial entrepreneur who's tried to focus on building companies that will improve people's lives.

Coming out of COVID-19, my partner and I wanted to start a company to help combat the mental wellness crisis, which is how Nue Life was created.

While researching the mental health space, we realized psychedelics held enormous promise. As I analyzed the various substances and compounds, I noticed that ketamine was a quasi-psychedelic substance that was available and legal with a prescription. It's a common anesthetic.

We launched Nue Life, a telehealth ketamine therapy service, in 2021 and facilitated thousands of ketamine experiences for our patients. We shipped ketamine lozenges to them in small doses and monitored their well-being with data.

As the industry matured, I began to feel like companies were putting profits over patients. I didn't want to do the same to keep raising capital for Nue Life, and the company was acquired in 2023.

I'm now speaking out, urging the industry to enforce higher standards on who can prescribe ketamine and ensuring patients have been suitably assessed before being prescribed it.

I hope Matthew Perry's death can be a wake-up call. We need to acknowledge bad behavior in the psychedelic medicine space. To remain silent about unethical practices is to jeopardize all the incredible progress made.

I wanted to support patients with their mental health but felt increasingly pressured to prioritize profit

The telehealth ketamine industry emerged after the COVID-19 pandemic made prescribing the drug remotely a possibility. Telehealth services provide patients with access to ketamine therapy from the comfort of their homes.

We co-founded Nue Life as a public benefits corporation and wanted to set a new ethical standard in a rapidly commercializing industry.

The goal was for patients to use the least amount of ketamine necessary to reset. We only shipped two or three ketamine experiences at a time, and if the person didn't follow our protocols, they'd be suspended from the program. Patient check-ins were mandatory before any additional medication was shipped. This involved patients submitting screening questionnaires, which were thoroughly reviewed before scheduling their follow-up appointments.

Patients who were not a good fit for the program or who posed safety concerns were involuntarily discharged. If patients did not meet the necessary criteria, their cases were escalated to our medical directors and prescribers for further review and medical directors would make final calls.

In addition to ketamine, we offered meditation, yoga, and group therapy through our platform.

With our patients' consent, we used data from their wearables, such as their Fitbit, Oura ring, and iPhone, to track their sleep and exercise.

Tracking data and focusing on holistic care separated Nue Life from other telehealth providers. Other companies might have offered similar elements, but I believe Nue Life was unique in its commitment to patient care.

The telehealth industry has shifted in recent years

When we launched Nue Life, I think patients were willing to pay a slight premium for our protocol.

But two and a half years later, I felt I couldn't compete with companies offering more doses for less money.

We always knew there would be some tension between maintaining ethical patient care and meeting investors' financial expectations. As low-cost providers flooded into the at-home ketamine space, it became very difficult to compete in a way that wasn't solely focused on selling patients more ketamine.

We reached a stage with Nue Life where we needed to raise more capital to break even.

When I spoke to prospective new investors, they asked me about customer acquisition costs and the company's lifetime value to customers. It felt like I was being asked what I was going to do to sell people more ketamine.

I realized I would need to start treating patients like customers to raise this capital, and I didn't want to do that.

I decided not to raise additional funding, and the company was acquired by a larger company in October 2023. That decision was difficult. When I sold Nue Life, I thought I was doing the best thing for our patients.

It feels like the ketamine telehealth industry is in a race to the bottom

While at Nue Life, I witnessed through mystery shoppers how some providers prescribed ketamine without what I believed to be an adequate assessment of patient suitability.

Since leaving, people still working for ketamine providers have confided in me about slipping standards. They have shared stories about over-prescribing ketamine and a growing focus on providing ketamine over aftercare and follow-on support.

Government bodies are also issuing warnings. The FDA released a warning in October 2023 about the risks associated with compounded ketamine, including oral formulations. In January 2024, the DEA took legal action against St. Louis-area doctors for illegally administering ketamine.

It feels like the standard of care in the telehealth ketamine industry is being pushed down not elevated. I felt an obligation to speak up about the economic incentives driving the race to the bottom in this industry.

I hope that Matthew Perry's death will be a wake-up call for the industry

The recent tragic events involving Matthew Perry are a stark reminder of the dangers inherent in this industry.

I'm saddened by the potential that more cases of addiction to ketamine will inevitably arise. I'm hoping this event will be a wake-up call for the industry.

I don't know Perry's medical history, but I'm not surprised that medical practitioners were willing to let him try ketamine. He appears to have liked it and started getting the drug on the black market. Two doctors have now been charged over his death.

On social media, I've called for a voluntary pause on at-home ketamine therapy while the industry develops minimum standards for care because currently, it's a wild wild west.

Standards like mandatory assessments before ketamine is prescribed, ongoing monitoring of patient outcomes, rigorous certification for all practitioners and regular audits and penalties for non-compliance, enforced by federal health agencies and professional associations. The FDA has released multiple warnings on their website, and the DEA has opened a case mentioned earlier, but this is not enough.

I believe no medical practitioner should be insured to prescribe ketamine unless they live up to those minimum standards. This is a vulnerable patient population.

Ketamine's positive impact on mental health is well-documented. The issue is the lack of meaningful regulation for an industry sending increasingly powerful psychological medications to patients' homes.

The data we collected at Nue Life showed that ketamine therapy can be promising, but sustainable improvements often require therapy, aftercare, and integration, which aren't always economically viable for providers to offer.

Ignoring the ethical and medical dilemmas of 'maintenance ketamine therapy' risks prioritizing profits over patient welfare.

Editor's note: Matthew Perry's death was attributed to the "acute effects of ketamine" as well as drowning and coronary artery disease in a report from the Los Angeles County medical examiner's office, according to prior BI reporting. Anne Milgram, a DEA administrator, said in an August press conference that Perry became addicted to intravenous ketamine after seeking treatment for anxiety and depression at a local clinic, BI reported. Five defendants, including two doctors, have been charged in connection with his death.

Juan Pablo Cappello is not affiliated with the successor of Nue Life Health, who operates www.nue.life. The opinions expressed herein are solely Mr. Cappello's and are focused on the at-home ketamine industry and not any one provider in particular.

In a statement shared with Business Insider, the current CEO of Nue Life, Daniel Love, said he and Capello agree that patient safety should be prioritized over economic gain. He also said he's never felt pressured by investors to pursue profit over purpose.

"Our first and foremost goal is to provide safe and affordable access to those in need," he said.

Love said Nue Life's current screening procedures involve medical consultations, a review of patient psychiatric history, and an assessment of their home environment. He said that judgements around prescribing medication are made solely by medical providers after conducting a review of data maintained by state Prescription Monitoring Programs.

According to Love, the company requires patients to have a "supportive caretaker" during treatments and offers one-to-one coaching and medical provider consultations as part of its Nue Reset program.

Love said that Nue Life would welcome clearer standards across the industry, but suggested that Capello's call for an industry-wide pause could impact patient support: "We cannot just hit 'pause' for a patient in the middle of treatment. There are second-order impacts one would need to think through. What would people who need support and help do in the interim?"