FDA creates a wake for psychedelic drugs as a flood of cash flows into alt therapies
Regulators’ doors of perception… may be starting to crack open. The US Food and Drug Administration recently took a big step toward boosting psychedelic drug therapy. The agency — which regulates everything from food to cosmetics to tobacco — issued its first draft guidance for how it’ll suggest researchers design clinical trials for psychedelics. It could make the eventual process of gaining FDA approval clearer for drug companies seeking to develop psychedelic drugs intended for alternative therapies (translation: a potential business boom).
On the table: The FDA’s draft guidance mentions LSD, psilocybin, and MDMA.
Playing catch-up: Psychedelic-assisted therapy has been used to treat post-traumatic stress disorder, depression, eating disorders, and addiction.
Money follows culture… Even before the FDA moved to tee up clinical trials, business was ready to take a swing. By last year, 50+ psychedelic companies, including Compass Pathways and ATAI Life Sciences, had gone public at a combined $2B+ valuation. Analysts expect the market will reach $12B by 2030, and it’s not just a US phenomenon. Australian doctors, for example, can now prescribe MDMA and psilocybin for the treatment of depression and PTSD. Culturally, psychedelics appear to have arrived. The best-seller “How to Change Your Mind” inspired a Netflix series, and hardly a month goes by without an article detailing Silicon Valley CEOs’ use of psychedelics.
Durable foundations are built brick by brick… The road to FDA-approved psychedelic drugs has been long (and is ongoing). MAPS, a nonprofit that advocates for psychedelic therapy, recently held a 10K-person conference in Denver attended by celebs including Aaron Rodgers and Melissa Etheridge. Historically, indigenous populations worldwide have used psychedelics for healing. Looking ahead: the FDA’s draft guidance represents a meaningful step for drug companies looking to enter the market, but hurdles remain. Namely, the DEA still classifies psychedelics as having “no currently accepted medical use.”