Some in the serious illness space believe that psychedelic-assisted therapy represents a new frontier in palliative care, even though the substances remain illegal at the federal level.

In recent years, research into the potential medical uses of psychedelics and ketamine has abounded. The focus to date has been concentrated on three areas: mental health, palliative and end-of-life care.

Psychedelics are also attracting substantial financial investment. Clinical psychedelics may become a $6.85 billion industry by 2027, Forbes reported last July.

Among the companies working in the space is the drug development company Filament Health.

“It’s heartening to see both the pace and breadth of psychedelic research increase. The growing range of indications that are currently being explored will hopefully benefit millions of people suffering from treatable conditions,” Filament CEO Ben Lightburn, told Hospice News. “I believe we will see legislation around psychedelics begin to relax as these compounds are increasingly proven safe and effective in clinical trials.”

I believe we will see legislation around psychedelics begin to relax as these compounds are increasingly proven safe and effective in clinical trials.

-Filament CEO Ben Lightburn

The international biotechnology company Psyence Group recently entered into a licensing agreement with Filament to support the development of palliative care drugs derived from natural psilocybin.

The agreement gives Psyence an exclusive license to use Filament’s botanical drug candidate PEX010 in clinical trials, initially in the United Kingdom. Both companies are publicly traded on international markets. 

Likewise, the United Kingdom-based psychedelics-focused pharmaceutical company, Compass Pathways (NASDAQ: CMPS), went public in Sept. 2020 and is now worth an estimated $375 million.

Venture capital and private equity investors have also taken an interest.

The largest investors in psychedelics include the venture capital firms Conscious Fund, Explorer Equity Group and Pala Santo. Two years ago. Florida-based cannabis and psychedelics attorney Dustin Robinson co-founded Iter Investments, a new venture capital group focused on that sector.

The debate over legalities

Though many in the fledgling psychedelics industry express optimism that the research and funding will ultimately lead to expanded access for patients, U.S. federal law casts a long shadow.

Nevertheless, providers of these therapies, as well as their investors, remain in limbo when it comes to potential legal risks.

Under U.S. law, violations associated with psychedelics can result in prison sentences as long as 20 years and fines up to $2 million, according to Kathryn Tucker, director of advocacy for the National Psychedelic Association, which has filed lawsuits against the U.S. Drug Enforcement Administration (DEA) in a push for greater access.

“It’s really significant exposure, and there is no indication that the federal government will look the other way. So it’s very risky to rely on one of these state provisions — which is why I’ve spent so much time and effort in the last couple of years trying to crack a door to legal access with federal Safe Harbor,” Tucker told Hospice News. “That work has included the effort to utilize already enacted state and federal Right to Try laws. Out of that work came also a related effort to compel the DEA to reschedule [some psychedelics] off of Schedule I, and that is pending in the Ninth Circuit.”

So far, the DEA has been “strenuously resisting” these efforts, Tucker said.

To date, most of the action has occurred at the state level, with Oregon and Colorado at the forefront.

Oregon in 2020 decriminalized a number of drugs that remain illegal federally. Another law in the state authorized the development of psilocybin service centers in which adults older than 21 can consume the mushroom-derived product under the supervision of a state-certified facilitator.

Colorado has likewise decriminalized DMT, psilocybin, ibogaine and mescaline (excluding peyote) and allows psychedelic-assisted therapy for a number of conditions, as have a number of local and municipal governments.

“Right-to-Try” laws are also on the books in 41 states and federally.

The federal law doesn’t specifically include psychedelics, but Rep. Earl Blumenauer (D-Ore.) recently introduced a federal bill that would revise current rules to permit some end-of-life patients to use psilocybin and other investigational treatments.

Some other developments also signal potential change.

In May 2022, federal health officials indicated in a letter to the U.S. Rep. Madeleine Dean (D-Penn.) that the Biden Administration within two years could seek approval of MDMA as a PTSD treatment, as well as psilocybin for depression.

Also, this past March, Reps. Lou Correa (D-Calif.) and Jack Bergman (R-Mich) relaunched the Congressional Psychedelics Advancing Therapies (PATH) Caucus, designed to pursue legislation to advance research and potential utilization.

The clinical case

Interest in the potential medical benefits of psychedelics became widespread during the 1960s, but research all but stopped after they were criminalized through federal legislation in 1970. The first inklings of a resurgence began in the late 1990s, and momentum has picked up during the last decade.

Researchers have identified a number of clinical benefits, including reduction of anxiety, depression and improved acceptance of mortality, according to a 2019 literature review in the journal Current Oncology.

The paper cited studies indicating that the most commonly used psychedelic drugs have no tissue toxicity, do not interfere with liver function, have few interactions with other medications and carry no long-term physical effects.

Common side effects tend to be short in duration, such as nausea and vomiting or disruption of visual or spatial orientation, the study found.

A growing cadre of hospice and palliative care clinicians and experts are becoming proponents of psychedelic therapy when appropriate for individual patients — and their families, according to Ladybird Morgan, a registered nurse and social worker for the palliative care company Mettle Health and co-founder of The Humane Prison Hospice Project.

Morgan is also a study therapist for University of Washington research on psilocybin-assisted psychotherapy.

“Most psychedelics actually have a potential to be supportive in the palliative care world, for the client and for the caregivers,” Morgan told Hospice News. “It’s not just for the person experiencing end of life and chronic illness.”

Most psychedelics actually have a potential to be supportive in the palliative care world, for the client and for the caregivers.

-Ladybird Morgan, registered nurse and social worker, Mettle Health, co-founder of The Humane Prison Hospice Project

Despite the evidence showing benefits, risks do exist, and more attention should be paid to these in ongoing research, Morgan said.

“I don’t see a lot of focus on the possible harms. There are definitely just basic physiological cardiac risks. MDMA and some other psychedelics can really increase your blood pressure and heart rate,” Morgan said. “That can potentially have a negative impact. It’s not the norm, but it’s certainly there. In terms of mental stability, you will require a lot of integration afterward, meaning that it’s not necessarily going to spiral you out into a crash, but the potential for increased depression is there, higher risks of suicidality.”

The impact of ketamine

The trajectory for psychedelics could mirror a related emerging industry — ketamine clinics.

Though technically not a psychedelic, the anesthetic ketamine is often lumped in with them due to some similarities in the drug’s effects for mental health and palliative patients and its status as a controlled substance (Schedule III).

Like psychedelics, ketamine therapy is backed by a growing body of evidence, as well as substantial financial investment.

Palliative care physician Dr. Rachel Norris in March opened the Chicago-based ketamine clinic Imagine Healthcare. The clinic is the only such business in that market that is owned and operated by a palliative care doctor.

For the first decade of her medical career, Norris worked as an emergency department physician before moving into the palliative care field, beginning her fellowship at the University of Chicago in 2013.

“I got a call from a friend of mine who was working at a clinic where they started to do ketamine infusions for mental health, and he invited me to stop by the clinic and take a look at what they were doing,” Norris told Hospice News. “I came by and spent some time in the clinic and was just completely blown away by the results, how quickly people got relief from depression and anxiety and how they were able to work with trauma and some chronic pain conditions.”

I was just completely blown away by the results, how quickly people got relief from depression and anxiety and how they were able to work with trauma and some chronic pain conditions.

— Dr. Kathleen Norris, palliative care physician, founder and chief medical officer, Imagine Healthcare

This started her on the journey toward founding Imagine Healthcare, in which patients receive ketamine therapy from specially trained clinicians in a comfortable setting — if they make it through a screening process.

Norris is also a board member of the Illinois Psychedelic Society. The state is among those currently mulling legislation that would legalize psilocybin and make it available to some patients.

An investment bubble that could burst

But psychedelics as a business also carry some risks, particularly in U.S. markets. In addition to the regulatory questions, some believe that the space expanded too quickly, according to reporting in The Guardian.

A rash of psychedelics or ketamine companies have had to close locations or shut down entirely, including Ketamine Wellness Clinics, a multi-state chain, one of the industry’s largest companies, Field Trip Health (NASDAQ: FTHWF), and the private equity-backed Actify Neurotherapies.

“It’s a difficult time to seek funding in any pre-revenue industry, and psychedelics are no exception. There was a crescendo of investor interest that reached its peak in early 2021,” Lightburn said. “Unfortunately, many of the organizations that received funding have since fizzled out, which has impacted the entire industry. Hopefully, the industry will begin to right-set as those of us doing legitimate work continue to grow.”