A version of the following memo was submitted to the Congressional Psychedelics Advancing Therapies Caucus.
The emerging regulatory framework governing certain controlled substances across various states—including medical and adult use recreational cannabis and psychedelics—is an area of particular interest. We have advised officials on emerging drug policy transformations in states like Michigan, California, and Nevada. We are also a founding member of the Cannabis Freedom Alliance, which seeks to advance federal cannabis legalization in a manner that respects states’ autonomy to self-design their own policies. We also seek to minimize barriers to market entry for potential entrepreneurs to ensure a competitive and dynamic marketplace in which even Americans of modest means can compete.
We believe there are several legislative approaches that could improve access to psychedelic-based medicine
Pass the Breakthrough Therapies Act
Introduced by Sens. Rand Paul (R-Ky.) and Cory Booker (D-N.J.), the Breakthrough Therapies Act would automatically reschedule any substance recognized by the Food and Drug Administration (FDA) as a “breakthrough therapy” so medical research can be conducted more easily. Currently, this designation applies to analogues of both MDMA and psilocybin that have both advanced to Phase III clinical trials.
The original bill proposed to reclassify such substances from Schedule I to Schedule II so that drug sponsors face fewer barriers in procuring a DEA license to conduct medical research. However, we believe the act should go further by automatically moving psychedelic substances to Schedule III to better facilitate research and data collection. Currently, supervised clinical administration of these substances is available in both Colorado and Oregon through state-licensed facilities. Licensees in Oregon have already administered more than 12,000 clinical doses of psilocybin–more than the total of all federally supervised clinical trials to date. A Schedule III designation would simultaneously allow these centers to collect important research data on the drugs’ effectiveness that could be useful for FDA evaluations of these treatments and remove federal income tax penalties and barriers to financial services for the licensees that offer these clinical services. This approach would also better respect state authority and rebalance the federal system.
The current Schedule I designation has a chilling effect on scientific research and discourages some of the best research institutions, including hospitals and universities, from investigating these treatments. Potential financial supporters are also dissuaded from investing dollars that cannot be used efficiently or, at worst, could implicate them as accomplices to a federal crime.
Expand the use of observational data
Through the 21st Century Cures Act, Congress mandated that the FDA use observational (“real world”) evidence in drug approval decisions. However, the Act did not provide enough specificity to be relevant to psychedelic clinical trials. Many pharmaceutical compounds going through clinical trials are substantially similar to psychedelics that are legal in other parts of the world or have a long history of both safety and efficacy.
MDMA, for instance, was unregulated until 1985 and is currently available for prescription in Australia. Psilocybin is legal to possess in Colorado and is available through authorized providers in Oregon. Multiple companies are currently taking similar versions of MDMA and Psilocybin through clinical trials.
Ibogaine is another psychedelic compound that has shown promise in the treatment of opioid use disorder. Under current regulations, any drug company developing an ibogaine-based compound would need to spend many millions of dollars replicating early trials that have already been documented at foreign clinics.
Other psychedelic compounds have been used for thousands of years by indigenous communities and continue to be used frequently around the world. Congress could require that the FDA develop clear guidelines to specify how observational data alone could be compiled and data mined to meet FDA requirements for demonstrating safety and efficacy.
Reform the efficacy requirement
In 1962, Congress reformed the Food, Drug, and Cosmetic Act to require that drug sponsors prove not only that their drugs are safe for human consumption but also their level of efficacy. This ballooned the cost of drug development by many years and hundreds of millions of dollars. The average cost of drug development has been estimated to now exceed $1.7 billion, and development takes more than a decade to complete. A Reason Foundation review of research demonstrates that far more Americans die from potentially treatable diseases due to this expanded timeline than are saved by the FDA’s original mission to ensure safety alone.
Congress could follow Japan’s example and allow the provisional commercialization of drugs once sponsors have demonstrated to regulators they are safe for human consumption (by, for instance, passing Phase I or Phase II trials).
Legislatively reclassify psychedelics
Many psychedelic compounds were initially placed on the list of Schedule I substances without a comprehensive public evaluation. Congress has full discretion to alter the classification of any substance within the Controlled Substances Act that it feels holds medical and scientific value. Reclassifying psychedelic compounds to Schedule III would still give the FDA supervision over these compounds.
As an alternative to reclassifying specific substances through legislation, Congress could also require the FDA and DEA to review their criteria for placing compounds within Schedule I of the Controlled Substances Act. The agencies should apply objective and universal criteria for comparable drugs on Schedules III or below.
Currently, agencies have broad discretionary power within the DEA’s eight-part test to determine the scheduling of a drug, and there is no uniform standard by which drugs are measured. The U.S. Department of Health and Humans Services recently recommended that cannabis be removed from Schedule I out of recognition that it holds medical benefits. Psilocybin is similar to cannabis’ safety profile on many public health indicators and demonstrates a low potential for addiction or as a cause of violent crime.
It is likely that many important psychedelic substances would automatically be reclassified if they were scored on similar metrics to comparable drugs that currently fall within a lower schedule.
Pursue greater cost-effectiveness of existing public health spending
Much of the funding for clinical trials into psychedelic substances currently originates from philanthropic sources. This funding is sporadic and limited. However, psychedelic therapies might more cost-effectively treat many conditions for which Congress currently allocates billions of dollars toward treatment. Psychedelic therapies have shown promise in the treatment of post-traumatic stress disorder, major depressive disorder, treatment-resistant depression, traumatic brain injury, substance abuse, and even neurodegenerative conditions like Alzheimer’s and Parkinson’s Disease. There are multiple state bills or projects considering scientific funding of Ibogaine to help with regional opioid addiction. Public-private partnerships between the state, philanthropy, and manufacturing companies might help reduce the overall cost of opioid-related treatments through Ibogaine-assisted therapy.
Some of these conditions may be successfully treated through psychedelic therapy after only a single administration, whereas current treatments may require a lifetime of ongoing treatment.
Congress should consider a task force to model the pharmacoeconomics of psychedelic therapy to determine whether these treatments could reduce costs within federal healthcare spending.
Policymakers should note that psychedelic treatment involves more than just substances—it also requires a novel type of therapy. Therefore, a pharmacoeconomic analysis of psychedelic therapy must incorporate the cost of professional care.
Psychedelics-assisted therapy represents a promising treatment for many mental health issues.