Psychedelics industry gains momentum

Psychedelics are slowly gaining social acceptance as a valuable therapeutic drug to treat mental health illnesses, but the heavily regulated industry still faces many roadblocks in Canada. 

Once vilified, some psychedelics are now classified by the U.S. Food and Drug Administration as a potential “breakthrough therapy” for major depressive disorder. Psychedelic drugs, including psilocybin, LSD and ketamine, are now used to help people with post-traumatic stress disorder, anxiety or depression who are resistant to conventional treatments. 

Lawyers at companies that develop psychedelic therapies call for more relaxed regulations to make their therapies more widely available to medical professionals.  

While the drugs are currently illegal in Canada, medical professionals can apply for permission to provide patients with special access to psychedelics for therapeutic purposes.  

In a recent development, Alberta health officials announced that the province would become the first jurisdiction to regulate the use of psychedelic drugs for people in therapy. Under the new regulations that take effect in Jan. 2023, medical directors in Alberta will be required to apply for a licence to use psychedelics for the treatment of mental health disorders in their patients and will require the oversight of a psychiatrist. 

According to Ronan Levy, co-founder of psychedelic medicine developer Field Trip Health and a former practising lawyer, the legal community should use its influence to be proactive in advancing the psychedelics industry in Canada to increase availability to patients.  

“Lawyers are extremely well equipped to find ways to push boundaries and advance the conversation in a thoughtful and elegant way to serve the community,” says Levy. “I’m a big believer that psychedelics are going to become one of the most dominant cultural and medical forces of our lifetime.” 

While many governing colleges view ketamine-assisted therapy as a second- or third-line treatment option, Levy argues it should be regarded as first-line.  

“It creates better outcomes than current treatment options that generally don’t work, so it seems like a foolhardy approach to continue to use legacy approaches that we know by and large aren’t effective and create significant side effects when there are better options currently available,” he says. 

David Wood, general counsel and chief legal officer at Psygen Industries Inc., agrees that physicians’ administrative barriers make it challenging to access these drugs for needy patients. “I would love to see a psilocybin medical access system that’s federally operated in Canada under the Controlled Drugs and Substances Act, which means it would be in compliance with our UN obligations,” he says.  

Wood believes that licensed dealers such as Psygen that cultivate psilocybin mushrooms or synthetically manufacture the drug should be permitted to sell their products directly to physicians under certain guidelines. In particular, he would like to see MDMA and psilocybin made accessible to physicians as soon as possible. 

Clinical-stage biopharmaceutical company Cybin has employees across North America, which raises further legal challenges. The company is headquartered in Toronto but has a research and development lab in the US. 

“One of the risk factors we have is that we’re constantly having to look at international law because we have employees in various states and provinces,” says Robert Mino, general counsel and IP counsel at Cybin – a developer of proprietary psychedelic therapeutics.  

Intellectual property protection presents another challenge for lawyers in the psychedelics space.  

“Looking toward the return on investment, obviously protectable intellectual property rights provide significant opportunities,” says Mino.  

Data exclusivity is also an important consideration. Mino says that while a patent conveys the right to exclude others from using, making, selling or importing an invention, data exclusivity prohibits the jurisdiction’s drug regulators from approving competing versions of a recently approved drug during the exclusivity period. He recommends that legal departments work with research teams from the earliest stages to start thinking about patent rights and data exclusivity. 

Lawyers are often heavily involved in innovation at biopharmaceutical companies. The legal department at Cybin works with the R&D department to stay close to discussions about clinical trials. It also works with development teams as they conduct preclinical studies. 

The opportunity to work on innovations at Psygen has been gratifying for Wood.  

“As an IP lawyer and a regulatory lawyer who has focused so much on cannabis and psychedelics, to be working in-house with a company where there’s a high likelihood of unintentional innovation, as well as a plan for deliberate innovation, is very exciting,” says Wood.  

Mino anticipates considerable consolidation in the industry as smaller players that struggle to find the resources necessary to survive inevitably merge with or are acquired by larger companies.  

“A lot of those companies will start to look at the intellectual property they have and the assets they have and try to merge with another company that may have the resources to continue to move forward,” says Mino.  

“We are certainly looking at opportunities to merge with other companies that may have assets of interest to us.”  

Wood is optimistic that the future will be bright for the psychedelics sector of healthcare.  

“Psychedelics is a significant disruptor to the pharmaceutical industry and the healthcare industry because it really changes how each of those happens,” he says. “Once MDMA can be prescribed, which should be in 2023 or 2024, I think acceptance for psilocybin therapy will skyrocket.”