Australia’s largest online weight-loss business at loggerheads with regulators

One of Australia’s most high-profile technology start-ups has escalated its battle with health regulators and lobby groups, with Eucalyptus chief executive Tim Doyle accusing the Medical Board of Australia and the Royal Australian College of General Practitioners of “technophobia” and “bad-faith attacks” on its business model.

Eucalyptus has grown from a small start-up into Australia’s largest online weight-loss business, offering customers the highly popular – and controversial – weight-loss drug Ozempic via telehealth consultations on a smartphone app.

Eucalyptus chief executive Tim Doyle. Credit: Rhett Wyman

Since being founded in 2019, the start-up has landed more than $100 million in funding from investors, including Woolworths’ venture arm and Canva investor Blackbird Ventures, and is now valued at more than $500 million.

However, the company has found itself under increased scrutiny, and is now at loggerheads with regulators, particularly over its asynchronous prescription model, which Medical Board chair Anne Tonkin has called a “tick and flick” exercise. Eucalyptus CEO Tim Doyle says it is backed by data as being safe for patients.

Late last year, new guidelines from the Medical Board came into effect, cracking down on asynchronous prescriptions. The regulator said those consultations are often conducted via a patient completing a health questionnaire without a practitioner speaking with the patient.

“There are legitimate concerns about telehealth and prescriptions. But vested interests in the Australian medical lobby groups are doing damage to patient outcomes,” Doyle told this masthead.

“Again and again we’ve seen broad-stroke attacks against telehealth models, without any attempt to engage with those models, their safety infrastructure or their patient outcomes. It is difficult to point to even one successful technological innovation in primary care in this country, and that will continue until we see a more collaborative approach from the medical lobby groups and regulators.”

Eucalyptus operates online health brands including reproductive healthcare provider Kin, skincare provider Software, men’s health outfit Pilot and women’s weight loss brand Juniper which, according to Doyle, resulted in 60,000 patients losing more than 226,000 kilograms in 2023.

Doyle said patients can access doctors, pharmacists, nurses and dieticians through the Juniper app at any point in their care journey, and millions of Australians are already using digital clinics.

Ozempic is delivered in a patented pen-like device that lets users set their dosage.Credit: Sipa USA / AAP

He said Juniper fully complies with the Medical Board’s guidelines, and that it doesn’t do first-time asynchronous consultations. A Eucalyptus patient completes a detailed pre-consultation questionnaire of up to 100 questions before speaking to one of its GPs, he said.

“At various times throughout the last three years, we have attempted to engage with the RACGP, the Medical Board and the [Australian Medical Association], with only the AMA willing to engage in understanding the platform,” he said.

‘The GP-patient model is the ideal model of care, but it is a delusional one in modern society.’

Eucalyptus chief executive Tim Doyle

“We’ve seen drastic changes made to telehealth prescribing guidelines, with justifications based on the anecdotes of regulators, rather than the data that we’ve made available for analysis.

Medical Board of Australia chair Dr Anne Tonkin.

“We should be focused on how best to regulate digital clinics to ensure they are a safe option for patients, rather than trying to bad-faith attack them out of existence. Of course, the GP-patient model is the ideal model of care, but it is a delusional one in modern society.”

The RACGP declined to comment.

Dr Anne Tonkin, chair of the Medical Board, said that Eucalyptus’ submission had been considered when the board formulated its guidelines.

“We saw their submission. We had a number of submissions from similar companies, and we looked at those, but we disagreed with them,” she told this masthead.

“Just because you don’t agree doesn’t mean we haven’t taken them into account. We’ve looked at them, thought about them, and we disagree with them. So, I don’t think he can say we haven’t listened. We just don’t take on board his argument, I’m afraid.”

Tonkin said she “absolutely accepts” there’s a role for telehealth, and that it was crucial during the pandemic.

“But the ones that represent good medical practice, in our view, are the ones where the doctor and the patient talk to each other. And the ones that are problematic are the ones where people don’t even talk to them, and it’s essentially the patient deciding what they need, asking for it and getting it. That’s not good medical practice,” she said. “And I don’t think that makes us technophobic.”

Blackbird co-founders Niki Scevak and Rick Baker. Blackbird is a major investor in Eucalyptus.Credit: Natalie Boog

Doyle said that Australia, in contrast to other more forward-thinking jurisdictions such as the UK, is stuck in an endless “doom loop” of arguments about whether telehealth disrupts the continuity of care for patients. He said he favours mandatory regulation for telehealth clinics, and that they fall in between regulators currently, given there’s the Australian Health Practitioner Regulation Agency for doctors and the Therapeutic Goods Administration for medicines.

“There probably just needs to be a digital health standard, and you probably shouldn’t be allowed to operate until you pass that standard,” he said.

“Telehealth businesses should be regulated like fintech businesses. If I had a doctor or a nurse practitioner, I could set up a digital clinic this afternoon and send out my first prescription by 2pm. Whereas, obviously, if I’m starting a banking product, it’s going to be six-to-12 months of approvals and a whole lot of infrastructure to do that.”

Eucalyptus has also faced scepticism for its co-founders’ lack of medical background: Doyle, for example, was an executive at online mattress retailer Koala before starting Eucalyptus.

“They’re bad-faith attacks. I don’t write prescriptions, I build the technology that allows patients to talk to doctors, and for doctors to talk to pharmacists,” he said. “I don’t make healthcare decisions. [Uber founder] Travis Kalanick didn’t have to be a taxi driver.”

As for what’s next, Doyle is focused on expanding into other markets, including Germany, Japan and the UK, as well as launching a new business vertical: preventative health. “It’s called Compound. An interest in preventative health and longevity is something that is really growing here, and a lot of lifestyle diseases are preventable with changes to nutrition and exercise,” he said.

“You do diagnostics on the way in, you then do four weeks of programming to basically take over your life for 12 weeks. And then we build good habits with you and then re-scan you, and we do that every four months as part of a membership to help you stay as healthy as possible for as long as possible.”

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