What Does the FDA Think About Psychedelics?

- November 18th, 2020

The investigation of psychedelic drugs for their medical benefits is attracting investors. How does the leading US drug agency feel?

The development of the psychedelics industry depends on myriad factors, but one of the most critical is its relationship with a principal medical authority.

The US Food and Drug Administration (FDA) is the leading authority for drug approvals in the US. This federal body determines whether medical products will ultimately reach the hands of patients.

The FDA reviews the clinical data created by established medical studies evaluating the feasibility of drug compounds or products as treatments for specific ailments.


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As a federal agency, the FDA has to adhere to federal policy for drugs in the US. The country’s national drug-scheduling system provides data on all kinds of drugs and the regulations they must follow.

Several psychedelic compounds currently find themselves in the Schedule I category, which receives the heaviest scrutiny in the eyes of federal authorities. Cannabis is also listed in this segment.

If this is the case, then why are companies in the psychedelic drug development space pursuing clinical studies and looking for FDA approval? Interestingly, despite the legal status of these drugs, the FDA isn’t so closed off that it won’t examine their potential.

During the first Prohibition Partners LIVE online event, Rick Doblin, founder and executive director of the Multidisciplinary Association for Psychedelic Studies (MAPS), told the audience he sees the FDA as an engaged partner in conversations surrounding the construction of clinical trials with psychedelic agents.

Doblin added that he perceives the FDA as a regulatory agency willing to put science over politics when it comes to the medical benefits of psychedelics. MAPS is investigating the use of MDMA as a method of psychotherapy for patients with post-traumatic stress disorder.

In 2017, this psychedelics-based method was granted a “breakthrough therapy” designation by FDA in a move that represented a change in the drug authority’s perspective. MAPS has said in the past that it expects its Phase 3 trials sometime in 2021.

MAPS is a non-profit organization that is not looking to change its status anytime soon. While the group does take donations, investors looking to play the market are interested largely in public companies.


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Recently, the psychedelics investment market saw excitement when Compass Pathways (NASDAQ:CMPS) listed directly onto a senior US stock exchange.

Similar to MAPS, the investigation from Compass Pathways has also received support from the FDA. In 2018, the company confirmed the receipt of a “breakthrough therapy” designation from the FDA for its study of treatment-resistant depression using psilocybin.

Significance of changing mentality on psychedelics

In 2019, Psychedelic Support highlighted the fact that the FDA and National Institutes of Health had commented on the medical benefits associated with psychedelics-based treatments.

“The message was clear. The FDA will evaluate risk-benefit profile of psychedelic substances in the same way as other investigational drugs,” the report indicates.

According to the report, the agency outlined its requirements for clinical trial designs, highlighting the following specifications:

  • How psychedelics work in a particular setting
  • Timing of administration
  • Structured approach or will multiple approaches work
  • How fast does symptom reduction occur and how long are symptoms decreased
  • Do people relapse and if so can the drug retrieve them from relapse

Investor takeaway

From the information currently available, it’s clear that one of the biggest drug authorities in the world appears to be slowly but surely increasing its support of psychedelics.

What’s more, the medical indications show a promising market that is already garnering support among investors. The psychedelics space looks set to continue developing as more companies come to market.

Don’t forget to follow us @INN_LifeScience for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.


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