The Pill Club, a birth control and telehealth provider backed by an affiliate of venture financing firm TriplePoint Capital LLC, went bankrupt after California authorities accused the startup of fraudulently billing the state’s Medicaid program for contraceptives customers didn’t order and counseling sessions it never provided.
The San Mateo, California-based business said it will seek a buyer in Chapter 11 as it braces for the possibility that other states will launch additional investigations into its billing practices. The company, also known for a time as Favor, makes its debut appearance in bankruptcy court on Friday, months after agreeing to pay a total of $18.275 million to settle California regulators’ claims without admitting wrongdoing.
The Pill Club Chief Executive Officer Elizabeth Meyerdirk said in a sworn statement that news of the settlements prompted key business partners to terminate contracts with the business, resulting in a 60% drop in revenue. The company also racked up a $13 million legal bill responding to the California investigation, an expense that could grow significantly if other states launch new probes, Meyerdirk said.
Founded in 2015, The Pill Club bills itself as the biggest online provider of contraceptives in the US. It offers more than 120 brands of birth control and has served more than 3 million patients so far, according to Meyerdirk.
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