Psychedelic Mental Health: Crazy, Controversial, and Compelling
The therapeutic application of psychedelics has gained significant momentum, driven by robust research and evolving regulatory landscapes.
In recent years, the use of psychedelics to treat mental health disorders has skyrocketed. Substances such as ketamine, MDMA, and psilocybin have been at the forefront of this movement and are continually being studied for their potential to treat a variety of mental health disorders, including PTSD, depression, chronic pain, and anxiety.
Over 27M individuals experiencing mental illness are going untreated or about 54.7% of the mentally ill population. Approximately 59.8% of youth with major depression do not receive any mental health treatment. Given the rise of mental health disorders coupled with the emergence of withdrawal effects of SSRIs and a broader hesitancy towards medication centered treatment, psychedelic assisted therapy has grown in popularity. There have been a number of high-profile startups (Mindbloom, Journey Clinical, Field Trip Health, Joyous) that have raised millions of dollars on the basis that this new wave of interventional mental health treatment will be the future of therapy. There are even multiple companies aimed at building out the clinical infrastructure around these providers (Osmind, Big Leap Health, Fluence) giving even more credibility and structure to this relatively new space.
Psychedelic mental health therapy has seen significant growth and increasing acceptance in recent years. This growth is driven by promising clinical results and a shift in regulatory perspectives. The psychedelic drug market, particularly focused on mental health, is projected to reach $7.2 billion by 2029, demonstrating a robust 55% CAGR. Notably, the U.S. FDA has provided guidelines to aid the development of psychedelic drugs for medical treatments, reflecting a more open stance towards these substances. The establishment of research centers like the Johns Hopkins Center for Psychedelic and Consciousness Research and the Multidisciplinary Associate for Psychedelic Studies (MAPS) underscores a serious academic and medical commitment to exploring the therapeutic potential of psychedelics.
While generic ketamine is broadly FDA approved for anesthetic use, in 2019 the FDA and EMA approved Johnson & Johnson’s Spravato (esketamine) for treatment-resistant depression, their first approval of a psychedelic treatment for a psychiatric disorder in both the US and EU. Ketamine is also often prescribed off-label for mental health treatment. Esketamine is derived from the anesthetic ketamine. Its sales have grown strongly in 2023 to $689M (from $224M in 2021), clinical trials indicate it is effective with about 70% of patients having at least a 50% reduction in symptoms. There are over 90K daily Google searches for ketamine therapy in the US and over 16K clinics in this space indicating a broader interest from consumers for these services.
MDMA and psilocybin have been designated as breakthrough therapy by the FDA as well, which is designed to expedite the development and review of the drugs based on preliminary clinical evidence. The 2023 phase 3 trial for MDMA-assisted therapy showed positive results with 71.1% of patients who received three sessions of MDMA-assisted therapy no longer met the diagnostic criteria for PTSD, compared to 47.5% in the placebo group.
The biggest barrier for these treatments is the current stigma and public perception around the drugs themselves. While the landscape is evolving due to increasing research and regulatory changes, historically, psychedelics faced significant stigma largely due to their association with the 1960s counterculture and subsequent strict regulatory categorization. Recent clinical trials and FDA designations have begun to shift public and professional attitudes. Practitioners and the public are increasingly interested in the benefits these treatments can offer, especially for conditions poorly served by conventional medicines.
Recently an independent advisory panel voted, nearly unanimously that the available data was insufficient to show that the benefits from MDMA intervention for PTSD do not outweigh the risks. This does not necessarily mean it will not get approved by the FDA, and given its breakthrough designation previously, there’s a chance it will, but the agency often follows the recommendations of the advisory committees.
The rise of funding towards ketamine assisted therapy and the recent setback for MDMA treatment represent the complex and conflicting views on psychedelic assisted therapies. While therapeutic potential of these drugs and constant innovation in treatment prove a strong argument for their use in many cases, insufficient evidence, safety concerns, and regulatory and ethical issues still exist and will need to be overcome before wide adoption of multi different types of psychedelic interventions become mainstream. The most important element of this market is proving the safety and efficacy while integrating clinical healthcare standards of care and patient satisfaction into the models.