Inside the breathtaking world of therapeutic psychedelics: Great promise and great challenges

Marcus Capone felt he had run out of options.

A highly accomplished former Navy SEAL who received combat awards in the military’s counterterrorism unit, Capone was struggling with post-traumatic stress disorder (PTSD) and anxiety.

To deal with, as he describes, the hidden wounds of war, he was prescribed antidepressants and mood stabilizers for seven years, yet the symptoms persisted and the underlying problems were not getting resolved. Traditional medicine was failing him. His wife arranged for the veteran to try alternative therapy, a decision he credits as extremely positive.

Marcus Capone
Marcus Capone (LinkedIn)

“That radically changed my life,” he said at the Midwest Business Group on Health conference in Chicago this month.

Capone’s path is similar to many others. He learned he was suffering from treatment-resistant depression (TRD), a term for people that do not respond to antidepressant drugs. Figures vary, but estimates from Johns Hopkins Medicine and Cleveland Clinic show about 30% of people struggling with major depressive disorder do not respond to these medications.

TRD can feel bleak. The normal journey calls for an individual to see a primary care physician, get prescribed pills and wait four to six weeks to see whether the drugs work. If they don’t, patients return for a second treatment and wait four to six weeks again, said Capone. Normally, side effects from traumatic brain injuries and depression increase after eight to 12 weeks.

“As you go through [the protocol], the risk of suicide increases substantially,” he said.

In 2022, Capone co-founded TARA Mind, a company dedicated to expanding access to psychedelic-assisted therapy for people with mental health conditions. TARA Mind connects individuals to a network of therapists and clinics. So far, the company provides IV ketamine treatments in 50 major metro areas and offers a training program for therapists. The business’s offerings could expand as more therapies are approved by the Food and Drug Administration (FDA).

Employers, he argues, would be acting in their best interest to help employees with TRD. In California, untreated mental illness economically burdens the state nearly half a billion dollars. At a national level, that number jumps to $3.7 trillion each year, according to Health Canal.

Psychedelics may be a preferable alternative to electroconvulsive therapy for some people, which can cause difficult side effects and may not work either, Capone said. A study in The New England Journal of Medicine showed that patients receiving ketamine therapy were 14% more likely to have a 50% reduction in symptoms and 22% less likely to relapse after six months.

Employers grapple with new options

It’s easy to be in awe at the promising, but very early, research out there on the wide world of psychedelics.

There’s ketamine, LSD, MDMA (or ecstasy), psilocybin (or magic mushrooms), ibogaine and DMT, to name a few. The effects of each vary, but all told, research hints the drugs could help treat depression, substance abuse, PTSD and even chronic pain, Alzheimer’s, cancer, anorexia and gut health. Yet how the drugs work exactly are unknown.

“For a headache, there’s probably 10 different medications because people are different and they react differently,” said Capone. “We have to think of these as the exact same way.”

Though psychedelics are more mainstream now, their origins date back thousands of years to 1000 BCE in Mayan culture, said Imran Khan, executive director for the UC Berkeley Center for the Science of Psychedelics, at a conference hosted by the Northwestern Kellogg School of Management May 18.

IV ketamine is offered out-of-pocket for up to $6,000 at several major educational institutions like the University of Michigan, Stanford University and Duke University. In Colorado and Oregon, the states recently loosened restrictions and increased access to the drugs.

Hanifa Washington, a co-lead investigator for the Psychedelic Health Equity Initiative, said she hopes more states begin to reimburse these therapies under Medicaid, telling the audience she has a goal of 10 states adopting this care system over upcoming years.

Few employers, however, cover psychedelics as a benefit.

Nicole Martel, vice president of benefits, well-being and associate health at Bon Secours Mercy Health, said the health system covers nasal spray ketamine, otherwise known as Spravato, and is currently reviewing other options.

She said about a third of Mercy’s working population deals with TRD, and, with the system hiring new nurses, that percentage is likely to increase.

“We’re about to triple our utilization in the first five months of this year of mental health resources, so we know there’s a need,” Martel explained.

At Boeing, the aerospace company is also in the process of learning more about emerging mental health treatments for its employees.

“What I’m hoping is that we’re learning as we go so we’re not caught behind the eight-ball,” said Tara Sherman, well-being strategy leader at Boeing. “We need our experts at the health plan to do this evaluation.”

She likened psychedelics to GLP-1 weight loss drugs. Not all insurance covers drugs for weight loss, leaving employees to pay out-of-pocket or to find alternatives. If the workplace doesn’t cover psychedelics, will employees find safe options on their own?

“I think employers are the innovators, so self-funded employers need to step up and cover this as a healthcare benefit for employees,” Capone told Fierce Healthcare. “They’re going to see ROI and a happier, more productive workforce.”

“We’re really pushing hard for outcomes and data that’s hard to track,” said Rachel Mahoney, vice president of business development and clinical operations for Stella Center, a provider of ketamine infusion and nasal spray, among other offerings. “People really want to see cost-savings.”

The goal is to then capitalize on data from employer coverage. If data show psychedelic drugs are effective for employees and cost-effective for insurers, insurance companies are far more likely to cover the therapies going forward, said Enthea CEO Sherry Rais. 

Sherry Rais
Sherry Rais (LinkedIn)

Her company tries to convince major companies to pay for psychedelic therapy and has made ketamine-assisted therapy available nationwide as a covered employee benefit.

Three to five years from now, Kim Roddy, chief operations officer for Sunstone Therapies, hopes the psychedelic therapy landscape will lend itself to national payers agreeing to participate in pilot projects, but the claims data are needed from employers to make those projects a reality.

MDMA approval around the corner?

Especially for people unfamiliar with these therapies, the concept of a psychedelic, other-worldly experience may seem outlandish, or even dangerous, from a medical treatment perspective.

Like many drugs, damaging side effects are possible. Ketamine and psilocybin can trigger manic episodes, particularly in people with a family history of mental illness, and symptoms of bipolar disorder worsened for some people with psilocybin usage, reported The New York Times last year.

In August, the FDA will determine whether to approve MDMA drug therapy for PTSD. Industry leaders convening at Northwestern referred to the upcoming decision as potentially momentous for the field.

However, a March report (PDF) from the Institute for Clinical and Economic Review raised concerns that data from clinical trials were misrepresented. FDA experts will debate the treatment in June, Fierce Biotech reported.

Patients should also be aware of how these drugs may interact with antidepressants and how everyday use of psychedelics could lead to cardiovascular risk.

More from Fierce Biotech: AbbVie inks $2B-plus next-gen neuro deal with Gilgamesh

That’s why leaders in psychedelics advocate for clinically supervised therapy in conjunction with the drugs, where participants undergo the experience for several hours over the long term so they can be monitored by experts. The effects are oftentimes more profound in these settings, with proper support before and after therapeutic intervention.

“Having a specialized provider network is very important,” said TARA Mind Chief Medical Officer Richard Nockowitz, M.D. “I worry about that a bit when it [MDMA] is approved. There are right and wrong ways to do this treatment and have it be effective.”

Rais said the psychedelic movement is further along than she expected it would be when it comes to widespread acceptance and getting drugs covered by insurance. Enthea covered just 500 lives a year ago. Today, that number is up to 150,000. The company remains in conversations with Fortune 100 companies about coverage.

Despite care delivery being a primary concern for providers and companies in the space, investment in psychedelics is on the biotech side, said Lisa Evia, managing partner for SeedFund Capital.

“Last year, 96% of the money in this space went to drug development,” she said. “None of this is getting anywhere without [care delivery], yet none of the money is going into that.”