Is psychedelic therapy an essential paradigm for mental health?

An Expert View from Adrienne Rivlin, a partner in LEK’s Healthcare practice.

Excitingly, the last few years have borne significant milestones for psychedelic therapy. Promising trial readouts across a range of psychedelic classes and indications, US Food and Drug Administration (FDA) breakthrough designations, and reimbursement code updates have propelled psychedelics to be much more widely discussed in both the scientific and the public domains. There has been an influx of $500 million to $600 million minimum in investment every year since 2020; in 2021, investment was in excess of $1.5 billion. The global psychedelic market is now projected to be worth $13 billion by 2030.

Yet, amid these promising developments, there are still challenges impeding the successful commercialization of psychedelic treatments in today’s healthcare landscape. These include continued regulatory uncertainty and nervousness that infrastructure requirements for addressing the market's demand for psychotherapy treatments are not being addressed.

Commercialization challenges and potential solutions

The mental health crisis, which has worsened and spread widely in recent years, has acted as a catalyst for change within the psychedelics industry, particularly due to the impact of COVID-19. More investors started recognizing the potential of investing in psychedelics as a path to the broader mental health market. In recent years, many trials in psychedelics have been focused on treating depression, anxiety, and addiction issues, where there is still significant unmet clinical need, many by investigating the benefits of psychedelic-assisted psychotherapy.1

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As more of these trials progress through key milestones in clinical development, the companies developing them are turning their attention towards understanding the requirements for successful commercialization. More specifically, a key challenge faced by most stakeholders operating in this space is the ability to ensure enough infrastructure capacity to meet the high demand for psychotherapy in key markets such as Europe and the USA.

The successful commercialization of psychedelics, including their integration into psychiatric standards of care, will require input from a wide range of stakeholders to build the market and adequately address the current disparity in supply and demand. Some initiatives to address the key challenges for commercialization may include:

● Investment in therapist quality: this would help standardize the role of psychotherapy approaches, such as cognitive behavioral therapy, in psychedelic treatment regimens, and help ease the confidence of regulators/insurers in this therapeutic approach - both of which are important for commercialization.

● Adopting digital approaches: to increase capacity in the market, reduce the cost of treatment and increase standardization of the psychotherapy element of the treatment regimen.

● Strengthen the body of research demonstrating psychedelics’ effectiveness: if further evidence could be generated to elucidate the treatment mechanism and understand whether psychedelic compounds such as psilocybin are efficacious by themselves as treatments, it would potentially enable psilocybin to be administered under the supervision of a person who is not a licensed psychotherapist, solving the potential capacity challenge.

Public perception: navigating misconceptions

While investments soar and research progresses, misconceptions and stigmas surrounding psychedelics persist in the public consciousness. Partially contributing to public scepticism of psychedelics as viable treatments are the historical associations of these substances, driven largely by the 1960s counterculture around recreational drug use. But public concern currently seems to be mostly directed at the possibility for patients to develop an addiction to the psychedelic substance following their treatment period. For any change in public awareness to occur, these types of concerns about addiction risk must be weighed against the substantial evidence indicating the low potential for physical dependence associated with these substances when administered in controlled therapeutic settings.

Overcoming these prejudices requires a paradigm shift towards viewing psychedelics as legitimate therapeutic tools, distinct from their recreational counterparts. For instance, several late-stage clinical studies have demonstrated the efficacy of psychedelic-assisted psychotherapy in treating psychological disorders with a success rate post trials of 67% for post-traumatic stress disorder, and 86% for alcohol use disorder (AUD).2

Crucially, another point of tension lies in the disparity in urgency and response between mental health crises and other public health issues, providing further evidence of the structural stigma of society's approach to mental illness. This, arguably, highlights the pressing need for unified efforts to destigmatise mental health treatments and prioritise efforts to tackle this crisis.

The future of funding in the psychedelic landscape

As psychedelic assets continue to progress through the clinical development pathway, and as regulation, public acceptance and supporting infrastructure become increasingly favourable, the next 10 to 20 years are likely to see a transformation in the patient journey for many mental health conditions. In tandem with these changes, there is increased optimism that alongside biotech valuations bounce back, the industry will continue to be well-capitalized.

Down the line, the psychedelic industry will likely see continued strong collaborations between academic experts, industry, and healthcare providers that will help foster innovation and improve public understanding of psychedelic therapies.

The patient journey through 2024 and beyond

As the psychedelics sector continues to gain momentum, a range of challenges across the patient journey still plague patients who have mental health conditions. Along with societal stigma and misconceptions, the limited availability and affordability of psychotherapy remain a significant factor impeding the quality of patient care today.

With increased investments and research initiatives planned for 2024, patients will be able to gain access to a broader range of treatment options in the future, particularly for mental health conditions that have been historically challenging to address. Despite this promising prospect, there will still be the need for careful consideration of patients’ unique needs, preferences, and treatment goals. Patients may also encounter a spectrum of challenges, from accessing clinical trials to seeking approved treatments in therapeutic settings.

Ultimately, the journey towards integrating psychedelic therapies into mainstream healthcare systems will require a stronger collaboration across different regulatory and governmental bodies, as well as ongoing research efforts for addressing the complex needs of individuals struggling with mental health disorders. We see evidence suggesting that the rate of investment in psychedelics will likely continue to increase, especially as lead candidates across several larger companies make their way towards launch. I am confident that this industry will soon be equipped with the support necessary to address the needs of many patients in desperate need of alternative and effective therapies.

References:

1 A specialized form of psychotherapy incorporating the use of psychedelic substances, such as psilocybin.

2 Trial details and readouts for a selection of late-stage psychedelics studies from LEK reports.s