Rehab 2.0: YC-Backed Ophelia Raises $2.7 Million To Help People Quit Opioids Without The Burden And Cost Of Rehab

Before the COVID-19 outbreak hit, the U.S. was already plagued and crippled by another epidemic: the opioid crisis. The CDC estimates that 11.4 million Americans reported opioid misuse in the prior year and 2.1 million reported having opioid use disorder (OUD). While there is an abundance of rehab clinics in the country (about 15,000), only one third prescribe medication (buprenorphine), which is known for easing withdrawal, blocking cravings and preventing relapse. Ophelia wants to offer individuals who struggle with opioid addiction medication-assisted treatment (MAT) through its telemedicine platform, and announced today a seed round of $2.7 million from General Catalyst, Refactor Capital and Y Combinator to do so.

“It might come as a surprise, but the average American misusing opioids looks a lot like the average American: 87% urban, 85% insured, 65% employed,” Ophelia Co-Founder and CEO Zack Gray told me in an interview. “After all, many got hooked by accident through a painkiller prescription after surgery that was funded by private insurance.”

And this is where the greatest medical contradiction lies: In the late 1990s, pharmaceutical companies told the medical community that patients would not become addicted to prescribed opioid medication, which resulted in healthcare providers prescribing them at greater rates. Today, the medical treatment for opioid addiction can only be prescribed by fewer than 5% of licensed practitioners. So the healthcare system went from overprescribing opioids to underprescribing its antidote.

“These medications could help many people recover from opioid use disorder, but they remain highly underutilized,” the National Institute on Drug Abuse, which is part of the NIH, stated in a report. “Fewer than half of private-sector treatment programs offer medications for opioid use disorders, and of patients in those programs who might benefit, only a third actually receive it.”

This lack of access leads many individuals who struggle with opioid addiction to hit the streets in order to buy drugs off the black market — something that is dangerous, unregulated and often much more expensive than prescribed medication.

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“Without medication, 90% of opioid users relapse within three months,” Gray said.

From Tragedy To Hope

The young entrepreneur experienced first-hand the devastating effects of opioid addiction when his former girlfriend died from an accidental overdose, like 47,000 other Americans that year. After graduating with an MBA from Wharton, Gray decided then and there to create a better solution with Co-Founder and COO Mattan Griffel.

Founded in May 2019, New York City-based Ophelia offers individuals who struggle with opioid addiction an online platform for medication-assisted treatment (MAT), meaning medication paired with therapy. New users first consult with an Ophelia clinician who determines whether the patient is fit for treatment. The licensed clinician will then prescribe medication and follow up regularly to monitor and manage progress.

“After the first month, many patients stabilize and switch to less frequent visits over video chat, with on-demand access to Ophelia for life,” Gray said.

The subscription model is set at $195 per month without insurance or financial assistance, but Gray says most patients pay less than this ($100 per month on average), adding that Ophelia will be in network with insurance companies within a few months, which will cover a higher percentage of the $195 than out-of-network benefits do.

“This is much lower than most rehab programs, private doctors or the price of Suboxone (buprenorphine) on the street, which can amount to $800 per month,” Gray said.

For now, Ophelia’s service is only available in the state of Pennsylvania, but the startup plans to expand to other states soon.

Rehab 2.0: No More Clinics?

In addition to advocating the efficacy of MAT, Ophelia wants to offer its users a better alternative than going to rehab.

“Rehab programs have very high upfront requirements,” Gray said, “including thousands of dollars in cost, months off work and group therapy. Most people don’t want that.”

Another big taboo in rehab is taking medication to ease the withdrawal symptoms of opioid addiction.

“Narcotics Anonymous (NA) will shame you for using medication, bound to the dogma that what works for alcohol (AA) also works for opioids,” Gray added. “Rehab today is ineffective and expensive. We're re-inventing it to look the way it should.”

In the midst of a lockdown, this alternative to rehab makes a lot of sense. Social distancing measures have limited group gatherings, which has impacted the structural setting of support group meetings. Ophelia’s service is therefore a welcome digital alternative.

According to Gray, demand for Ophelia’s service has ticked up for a few reasons. Firstly, many opioid users rely on the black markets simply to avoid withdrawal, and much of these drugs come from other countries. Due to the border restrictions imposed by COVID-19, these supply chains have been disrupted, leaving a lot of people in sudden need of help. Secondly, the psycho-social challenges of lay-offs and self-isolation are likely being amplified in people with a history of substance abuse, creating an environment conducive to relapse. Lastly, the addiction treatment industry has struggled to adapt to telemedicine during the pandemic, making it more difficult for patients to get treatment.

While there are myriad telemedicine startups that have been operational for the past few years, such as Hims/Hers, Nurx and Roman, the space has only recently seen the emergence of startups focusing on addiction. Portland-based health tech startup Boulder recently raised $10.5 million for its app-based addiction treatment program, which includes buprenorphine prescriptions for those suffering from opioid use disorder (OUD). Other startups in this space include AxialHealthcare, which builds software to manage opioid prescriptions and addiction, and Workit Health, which provides online addiction treatment to patients recovering from opioid use.

Here’s hoping these startups will rectify the damage the pharmaceutical industry has caused.