Psychedelic Medicines 2024

Global Overview of Psychedelic Medicines in 2024

Once dismissed as relics of counterculture, psychedelic medicines are now poised to rewrite the future of mental health care – straddling a line between scientific breakthrough and legal frontier. This guide aims to provide both the layperson and the legal practitioner with a comprehensive picture of the current state of the “market” for psychedelic medicines. Quotation marks are used in this instance because the market is still very much in its infancy.

Spravato (produced by Johnson & Johnson) is currently the only licensed psychedelic medicine and some would contend that ketamine, from which it is derived, is not strictly a psychedelic. However, USD780 million-worth of sales in the first nine months of 2024 – a 62% increase from the same period in 2023, continuing a similar trend from 2022–23 – is a sign that there is indeed a market. The market for other psychedelics, such as it is, is a market in which to set up and invest in the drug development companies that hope to create their own Spravato-style success story with treatments that are currently in clinical trial phases.

This nascent phase for the sector brings uncertainty but also significant opportunities. Its success will largely rest on the ability to turn incredibly promising clinical trial results into viable, profitable medicines. Historically, psychedelic medicines have had the complicating factor of their drug element being combined with psychotherapy. Regulators have struggled to understand how best to categorise this element of the treatments, with the US Food and Drug Administration (FDA) stating that “[we] do not regulate therapy”. It has also added significantly to the potential cost, as has the long-acting nature of the treatment – an MDMA therapy session can take eight hours and requires two licensed clinicians. Efforts are being made in the sector to create shorter-acting treatments without, or with minimal, psychotherapy elements. It remains to be seen how these will pan out.

The sector has historically also had to contend with considerable hype and the attendant ups and downs as expectations and reality fluctuate around one another. However, with an increasing number of potential drugs in the final phases of development and some of the issues with utopian early approaches being resolved, pragmatic realism has begun to establish itself. That being said, much of this pragmatic realism is required from an investor or practitioner’s perspective, given that it is likely to be 2026 at the earliest before any of the current crop of companies participating in Phase III trials are able to get a drug to market.

The guide will cover the following jurisdictions and their legal frameworks in depth:

• the UK;
• Brazil;
• the USA;
• Canada; and
• Japan.

What are psychedelics?

“Psychedelic” is a label traditionally attached both to certain compounds found naturally within plants and fungi and to synthetic compounds largely discovered in the mid- and early-20th century that were found to have similar properties. The natural compounds have been used in indigenous medicine for hundreds – if not thousands – of years and their more recent man-made cousins were also originally used therapeutically before the introduction of the United Nations conventions on controlled substances curtailed their use and research into them.

Since research on psychedelic compounds restarted in the 1990s, the beginning of what has come to be called the “psychedelic renaissance”, further evidence has been found for their therapeutic use. There has been a subsequent rush to develop novel psychedelics for medicinal use (and even “pseudodelics”, designed to convey the same benefits without the “trip”).

Psychedelic compounds tend to share the following characteristics.

• They have historically been controlled substances in law under the United Nations Conference for the Adoption of a Single Convention on Narcotic Drugs (the “Single Convention on Narcotic Drugs”) (1961), the United Nations Conference for the Adoption of a Protocol on Psychotropic Substances (the “Convention on Psychotropic Substances”) (1971), and the specific laws of individual jurisdictions.
• They have particular psychoactive effects with a certain commonality that led to the label “psychedelic”, derived from the Ancient Greek words for “mind-manifesting”. These effects are usually (but not always) derived from their agonism of the 5HT2A receptor in the brain and peripheral nervous system and are characterised by alterations in sensory input and the processing of sensory information, often causing strong emotional reactions. Effects are highly variable and depend on dose, individual factors, and setting. The experience of users who have taken a psychedelic substance is often referred to as a “trip”.
• Under the right circumstances, they can provoke powerful apparent insights, as well as emotional processing and release. This has led to their use in traditional indigenous spiritual and medicinal practices and modern psychological therapies. However, their powerful and often disruptive effect on the mind also carries risks, with users sometimes losing contact with reality and experiencing strong emotions in ways that can be distressing and dangerous. As such, using psychedelics is contraindicated for people with mental health conditions that predispose them to psychosis or other states where they might struggle to connect with consensus reality.

The most studied psychedelic compounds for medicinal use include:

• psilocybin – the most active compound in so-called magic mushrooms;
• dimethyltryptamine (DMT) – a key active compound in the Amazonian ayahuasca brew);
• 3,4-Methylenedioxymethamphetamine (MDMA) – historically referred to as “Ecstasy”);
• lysergic acid diethylamide (LSD); and
• ketamine – a licensed anaesthetic and arguably a psychedelic (although there is no consensus here, as it is not a 5HT2A agonist).

Mescaline, 5-MeO-DMT and ibogaine (also not primarily classified as a 5HT2A agonist) have also been the subject of studies.

Use of psychedelics as medicines

Research into psychedelic compounds as medicines began in the 1950s with investigations into the therapeutic potential of LSD, which was first synthesised by Albert Hoffman in 1938. Research was later done into the therapeutic use of MDMA in the 1970s (MDMA had been first discovered in 1912 for a different medical purpose).

The advent of the “War on Drugs” meant that research and wider investigation largely came to a standstill until the 1990s, when Rick Strassman’s US government-funded research into DMT paved the way for the re-emergence of psychedelic research. Since then, there has been a “psychedelic renaissance”, and at present there are in the region of 100 Phase I–III trials taking place globally on psilocybin alone.

A distinctive quality of psychedelic compounds as medicines is the broad range of indications where they show significant promise. By way of example, psilocybin has been investigated in relation to major depressive disorder (MDD), post-traumatic stress disorder (PTSD), anxiety disorders, obsessive-compulsive disorder (OCD), substance use disorders, cluster headaches and migraines, eating disorders, cancer-related psychiatric distress, Bipolar Disorder, Alzheimer’s disease, Parkinson’s disease, chronic pain conditions, and Lyme disease post-treatment symptoms.

As discussed earlier, there is currently only one licensed psychedelic medicine, Johnson & Johnson’s Spravato – although some would argue it should not be classed as a psychedelic, given that this is a ketamine-derived medicine. There are four further potential medicines that are at the Phase III clinical trial stage:

• Lykos Therapeutics’ midomafetamine (MDMA) medicine for PTSD (currently in the regulatory review stage, with a theoretical extra Phase III to be completed following rejection of their new drug application (NDA) by the FDA;
• Compass Pathways’ COMP360 (psilocybin) medicine for treatment-resistant depression;
• Usona Institute’s psilocybin medicine for MDD; and
• Awakn Life Sciences’ ketamine medicine for alcohol use disorder.

Legal landscape for psychedelic medicines

As can be seen from the guide’s authors, psychedelic compounds are classed by most jurisdictions as controlled substances, often largely as a result of the Convention on Psychotropic Substances (1971). This had the general effect of seriously delaying and curtailing research into the therapeutic benefits of these substances globally and is an issue that individual jurisdictions have grappled with in different ways. The individual jurisdiction chapters of this guide provide further details on the specific scope of criminal law as it applies to psychedelics.

One ramification of the restricted nature of these substances is that carrying out medical research into their benefits has been hampered by their scheduling. (Scheduling is separate from their legal “class” and reflects the restrictions placed on a substance in the context of public health policy rather than criminal law.) Restrictive scheduling has also generally limited the ability of physicians to prescribe psychedelics as unlicensed medicines. In some ways, this has not had a significant impact on the widespread use of psychedelic compounds in mainstream medicine, as widespread adoption and use is generally dependent on a medicine being licensed within that jurisdiction. The individual chapters will also explore the regime requirements for becoming a licensed medicine.

Attempts to reform the legal categorisation of psychedelics in order to facilitate research and pave the way for adult-use markets have been ongoing in a number of jurisdictions, as public perception and the historic approach to psychedelics have increasingly diverged. In many countries, polling has even revealed that a majority of the public are receptive to the idea of restrictions on psychedelics being relaxed in order to facilitate their use as medicines. Regulators have generally been slow to respond – although significant steps have been made in a number of jurisdictions during the past few years.

In some countries, cannabis has provided a model both for reformers and regulators when it comes to how best to go about updating the legal treatment of psychedelic compounds to make it fit for the 21st century. However, even though it is tempting for those not well acquainted with their differences to lump them together, there are significant divergences in the cultures and risk/benefit profiles of cannabis and psychedelics that need to be considered. There does seem to be no doubt, though, that liberalising attitudes to cannabis have helped to encourage reconsideration of some of the more lurid cultural assumptions about psychedelic compounds. That being said, adult-use markets are likely still some way off for most jurisdictions.

As with cannabis, the USA has been most proactive in taking the lead with psychedelic deregulation and – as is also the case with cannabis – progress at the state level has outpaced the federal level. As a bellwether for the rest of the world, progress in the USA is likely to be a leading indicator for where things are headed. However, even at the state level, the reception for psychedelics has been more muted than that for cannabis – reflecting the differing level of cultural penetration of these different substances.

Public perceptions of psychedelics are still somewhat coloured by the moral panic of the 1960s and 1970s, when unsubstantiated stories about psychedelics making users jump from windows or putting holes in their brains were common fare. Of course, there are real risks for a person affected by a significant dose of a psychedelic substance that are not analogous to most other controlled substances, and therefore it is to be expected that legal paths forwards will be correspondingly cautious. If the latest research has demonstrated anything, however, it is that psychedelic treatments are overwhelmingly more likely to save a recipient from the proverbial window ledge or help a brain heal from the impact of trauma.