Telehealth startup Fruit Street Health recently filed a lawsuit against digital health company Sharecare. The New York-based Fruit Street alleges that Sharecare violated their shared business agreement by developing its version of the Fruit Street’s diabetes prevention program, offered previously to Sharecare members. Sharecare has denied these claims asserting that the lawsuit lacks merit.
The lawsuit, lodged in the Superior Court of Fulton County in Georgia, seeks compensatory and punitive damages amounting to over $25 million. In response, Sharecare remains confident that it will successfully debunk Fruit Street’s allegations in court.
Fruit Street Health was established in 2014 as a public benefit corporation. Their digital platform offers health coaching, activity monitoring, and group health classes, allowing registered dieticians to deliver the diabetes prevention program prescribed by the CDC through virtual visits.
Sharecare, a company offering an employer- and health plan-facing health and wellness engagement platform, was founded in 2010 by WebMD’s founder Jeff Arnold and Dr. Mehmet Oz. In 2021, Sharecare went public via a SPAC with Falcon Capital Acquisition Corp.. The collaboration between the two healthcare companies began in 2018 when Sharecare started offering Fruit Street’s program on its platform.
According to Fruit Street CEO Laurence Girard, large public companies like Sharecare should be held accountable for allegedly taking undue advantage of small digital health startups such as Fruit Street that are striving to improve public health. This sentiment echoes the concerns of many in the digital health industry as they watch the conflict unfold.
Sharecare, however, contends that it made significant efforts to include Fruit Street as part of the Sharecare offering. The company’s executive vice president of corporate communications, Jen Martin Hall, stated that Fruit Street and Mr. Girard have failed to uphold standards of financial stability and integrity, a prerequisite for Sharecare’s vendor relationships. She also mentioned Sharecare’s plans to pursue claims against Mr. Girard and Fruit Street, including the recovery of more than $3 million owed to Sharecare by Fruit Street.
As the legal tussle escalates, the global legal community will be closely monitoring developments, and drawing up their assessments of this high-stakes case in digital healthcare.