Five strategies for navigating the regulatory terrain of psychedelics

There is an ongoing unmet medical need for new and effective therapies to treat mood and other psychiatric disorders and legitimate excitement about the possibility of psychedelics being approved and regulated as medical treatments.

In some cultures, substances with psychedelic and hallucinogenic properties (such as psilocybin mushrooms, peyote, and others) have been used therapeutically for thousands of years. Further, psychedelic products have legal medical use in a few countries and, in some other countries, are utilized in clinical practice for non-approved uses. Practitioners and researchers have published observational and interventional studies of psychedelic products as treatments for various and difficult-to-treat psychiatric conditions, such as Post-Traumatic Stress Disorder (PTSD), treatment-resistant depression, anxiety, and addiction. However, the therapeutic benefits of psychedelics are not yet established, and due to psychedelics’ hallucinogenic effects, abuse potential, and current classification as Schedule I drugs, sponsors must overcome significant regulatory and clinical development challenges to secure approval.

The U.S. Food and Drug Administration (FDA) and other regulatory agencies are still establishing how to best evaluate psychedelics as medical treatments and establish standards for their development. To start, the FDA has defined psychedelic drugs to typically include serotonin 5-HT2 agonists such as psilocybin and lysergic acid diethylamide (LSD) and entactogens or empathogens such as methylenedioxymethamphetamine (MDMA). Additionally, last year, the FDA issued a new draft guidance that outlines high-level recommendations for chemistry manufacturing and controls (CMC), nonclinical, and clinical development of psychedelics, but it lacks detail.¹  The EMA added a new section with recommendations for investigating psychedelics in the recently updated draft guideline on developing drugs for the treatment of depression, but this information, too, is brief.²  Therefore, companies and regulators must build experience together over the next few years to establish the best approaches.

The U.S. Food and Drug Administration (FDA) and other regulatory agencies are still establishing how to best evaluate psychedelics as medical treatments and establish standards for their development… Therefore companies and regulators will need to build experience together over the next few years to establish the best approaches.

The ‘exciting moment’ in psychedelic drug development poses regulatory challenges

Recently, a group of clinicians, researchers, Indigenous Peoples, industry executives, philanthropists, veterans, and bioethicists published a consensus statement on managing the ethical issues of approving psychedelics and integrating them into clinical practice. They concluded that this “incredibly exciting and hopeful moment” poses serious challenges for policymakers, warning that patients may gravitate to “nonmedical settings.³”

Due to their hallucinogenic effects, psychedelic drugs pose considerable clinical trial design challenges and, therefore, for the interpretation of resultant data to inform regulatory decision-making.  These challenges were discussed at the FDA’s public workshop on Advancing Psychedelic Clinical Study Design.⁴ They were also highlighted by experts at a recent FDA Advisory Committee meeting for a novel psychedelic drug treatment for PTSD that was subsequently not approved.⁵

Similarly, in a multi-stakeholder workshop on psychedelics recently hosted by the European Medicines Agency (EMA), participants from academia, the Psychedelic Access and Research European Alliance (PAREA), and the European Brain Council (EBC) highlighted that current medicines regulatory frameworks are designed primarily for conventional medicines and may need to adapt to the challenges posed by emerging novel treatments such as psychedelics.⁶

At Parexel, we advise sponsors on how to manage the regulatory risks of developing psychedelics for psychiatric conditions and gaining regulatory approval. In doing so, we have identified five strategies to maximize the likelihood of clinical development and regulatory success:

1. Characterize the investigational psychedelic product comprehensively

Some sponsors may assume that the long global history of the use of psychedelics, as well as the published nonclinical and clinical literature, already provides robust support for dose selection, duration, and safety of investigational psychedelic drug products. They might believe this history and the literature can help support an investigational new drug (IND) or marketing application. Some may also assume that because psychedelics are known active substances, regulators will not require the same extent of product characterization for the investigational psychedelic drug as would be necessary for a new molecular entity (NME) that has never been approved.

However, the FDA and EMA have made it clear that from the regulatory perspective, investigational psychedelic drugs are NMEs and must be adequately characterized. The available information on the non-approved clinical use of psychedelics has essential gaps. Most published literature consists of observational, real-world, and uncontrolled trials that do not meet regulatory standards for supporting investigational new drug (IND) applications. Also, the published studies on clinical use lack sufficient detail about pharmacokinetics, dose response, and individual study participant responses; they have not systematically collected the safety information important for regulatory decision-making.

Further, the exact dose, type of product, and endpoints are frequently unknown for published nonclinical studies. Study reports, which are needed for regulatory submissions, are also often unavailable; the summaries provided in published articles are not detailed enough, and individual animal data are unavailable. Although sponsors may expect or hope that the prior human experience “trumps” nonclinical data, the FDA and other regulators require sponsors to characterize psychedelics as comprehensively as any other small molecule NME.  For example, suppose the investigational psychedelic drug is intended for chronic use. In that case, regulators expect repeat-dose toxicology studies in two species to cover the intended clinical use, reproductive and developmental toxicity studies, and potential carcinogenicity studies.

At Parexel, we understand regulators’ standards for what studies in literature would be adequate to inform nonclinical safety and dose selection for an investigational psychedelic drug. We advise companies on identifying such studies and developing justifications for the adequacy of such studies to the FDA. In our experience, the most significant gaps in the published nonclinical studies of psychedelics, which limit their usefulness as support for a marketing application, are the lack of thorough toxicology testing, reporting of individual animal data, and sometimes incomplete histopathological evaluation. Defining the nonclinical development program early, including what literature could potentially be relied upon to support safety and dose selection, is essential.

In our experience, the most significant gaps in the published nonclinical studies of psychedelics, which therefore limit their usefulness as support for a marketing application, are the lack of thorough toxicology testing, reporting of individual animal data, and sometimes incomplete histopathological evaluation.

Because regulators expect that investigational psychedelic drugs must be wholly characterized by nonclinical, clinical pharmacological, and clinical data, we at Parexel strongly agree with the FDA’s and EMA’s advice that sponsors meet early and often with the regulators to discuss their development plans. It may be appropriate to engage with the FDA via an Initial Targeted Engagement for Regulatory Advice on CBER/CDER ProducTs (INTERACT) meeting before initiating clinical trials and at the beginning of the nonclinical development program to explain the target indication and patient population and discuss the nonclinical studies necessary to support the early phase clinical trials and inform dose selection.⁷  EU sponsors may consider a range of phase-appropriate Scientific Advice (SA) meetings, including simultaneous advice with more than one national competent authority (NCA), the EMA’s Committee for Medicinal Products for Human Use (CHMP), or Clinical Trials Coordination Group (CTCG) among others.⁸

2. Provide sound scientific justification for the dosing strategy and early clinical development

Whereas the published scientific literature can provide estimated psychedelic doses and describe their associated clinical effects, it is insufficient to establish the safe and therapeutic dose(s) of an investigational psychedelic drug. For psychedelics with hallucinogenic and other central nervous system (CNS)-related adverse effects, it is vital to find the lowest possible dose (or range of doses) that produces the intended treatment effect and minimally induces non-desirable effects.

At Parexel, we advise sponsors to establish an effective dose through a systematic dose exploration strategy. First, they should test different dose levels in standard single ascending dose (SAD) and multiple ascending dose (MAD) studies. Once a tolerable dose (or range of doses) and the associated pharmacokinetics have been identified, and the dose levels to be tested in patient studies are determined, sponsors can test different regimens, such as every three days versus every four days. This diligent dose exploration allows sponsors to select the optimal therapeutic dose and establish the dose-response relationship. If a combination therapy is being used (a psychedelic plus another treatment modality), the dose-response exploration may become even more challenging. There is some evidence suggesting that the intensity of the subjective experience with psychedelics may be linked to plasma concentration levels and receptor occupancy (RO).⁹ However, studies elucidating RO in humans are challenging. Thus, investigations assessing variability between dose and subjective experience are critical.

Sponsors must generate and present regulators with a complete dosing data dossier, including:

• How the range of effective doses for testing was identified (with an upper and lower bound). 
• How they identified the doses that have psychedelic effects, the design of the dose-finding trial, including the patient population and sample sizes, and dose modifications for adverse events and specific populations.
• All nonclinical and clinical data (safety and tolerability, activity or efficacy, PK and PD data) that give a preliminary understanding of dose- or exposure-response relationships.
• A model or simulation of the relationships that can be adapted as new data become available.

The clinical pharmacology program must be phase-appropriate. For example, as clinical development progresses to include trials in patients with co-morbidities or taking concomitant medicines, the agency will expect clinical pharmacology studies to establish drug exposure in patients with organ failure (such as hepatic or renal), depending on the molecule, DDI studies may also be warranted.

Sponsors should collect information on QTc effects early in development. A detailed analysis of nonclinical hERG assay and other cardiac data is required, and sponsors must continuously re-assess whether QTc-concentration data could be used instead of conducting a thorough QT (TQT) study. To reach an agreement with regulators, sponsors must collect clinical data and adequate-quality electrocardiograms (ECGs) throughout the program.

3. Design clinical trials to minimize bias and unblinding

The hallucinogenic effects of psychedelic drugs raise two crucial and fundamental challenges with the conduct of randomized controlled clinical trials: unblinding and bias. To date, there is no known therapeutically effective dose of a psychedelic drug that is not associated with a hallucinogenic effect.

This means that persons administered a psychedelic drug in a clinical trial are likely to quickly discern that they are on the investigational psychedelic drug (versus a comparator), leading to unblinding of patients and investigators. The hallucinogenic effects of psychedelic drugs must be monitored and managed. Practitioners who treat patients with psychedelics do so in a monitored setting and using guided psychotherapy. As currently administered, this psychotherapy can introduce bias into the trials. Failure to minimize bias in clinical trials can be detrimental to their success.

One recent systematic review of published psychedelic clinical trials found that nine of ten studies utilized designs with a high risk of bias.¹⁰ The studies were compromised by small sample sizes, non-diverse patient populations, unsuccessful or unreported blinding, and high dropout rates. Most did not provide protocols or statistical analysis plans (SAPs).

The hallucinogenic effects of psychedelic drugs raise two crucial and fundamental challenges with the conduct of randomized controlled clinical trials: unblinding and bias.

Sponsors who do not design high-quality trials risk regulatory delays and could even jeopardize a potentially effective drug. A drug that shows remarkable efficacy in a poorly designed trial may fail. In contrast, it might have been approved to benefit patients if it had performed only adequately in a well-designed trial.

At Parexel, we advise sponsors of psychedelic drugs on their clinical trial designs. These designs require meticulous planning and rigor to ensure the results are interpretable. If they are testing a new psychedelic agent with supportive psychotherapy, they must minimize bias due to psychotherapy and standardize the delivery of psychotherapy. Basic methodological questions remain about how to determine the effects of the drug versus those of psychotherapy versus the combination of psychotherapy plus psychedelic drugs. A well-designed psychotherapy manual for participating therapists is one way to reduce heterogeneity in the therapy administered.

Another core challenge is minimizing bias due to unblinding. An independent primary endpoint assessment by an independent assessor may decrease bias. These raters need to be appropriately trained, and all raters must use the same rating manual. Another measure to use is a blinding questionnaire to determine the impact of functional blinding. The questionnaire should include questions asking participants which group they think they were assigned and an explanation of their reasoning. 

Some sponsors of psychedelic medicinal treatments are interested in combination products - combining a psychedelic drug with another active ingredient (usually to enhance or facilitate the effects of the psychedelic). Combination products are subject to specific requirements for nonclinical and clinical evaluation.¹¹

Parexel advises sponsors of combination psychedelic products to conduct factorial studies—usually in Phase 2—to ensure that they determine the respective contributions of each active ingredient to the drug’s effect.

4. Prepare for intense scrutiny of proposals for at-home use of psychedelic medicines

Recognizing the criticality of outpatient settings in psychiatric care, sponsors of psychedelic investigational medicines are seeking to develop oral therapies for patient self-administration at home. However, the at-home, unmonitored setting raises safety concerns. For example, if a patient were to experience a significant hallucinogenic or dissociative episode (with or without other physiologic adverse effects) in an unmonitored environment without prompt access to medical intervention, they could endanger themselves or others.

FDA and EMA regulators rightly are conservative in their approaches to determining the safety of investigational psychedelic drugs. Assurance of patient safety in the clinical development and post-marketing phases is essential through appropriate patient selection, monitoring, and intervention measures. Notably, the EMA expects that both psychosis and suicidality are considered adverse events of special interest (AESIs) and collected as such in the development program.

Both the FDA and EMA have approved Spravato (esketamine), the s-enantiomer of ketamine, for treatment-resistant depression (TRD).¹²  Ketamine and esketamine have dissociative effects. They can cause hallucinations but are not considered classic psychedelics. Ketamine is approved for use as a general anesthetic for surgical procedures. When esketamine was approved, due to its potential for dissociation, sedation, abuse, and other adverse effects, both agencies imposed risk mitigation programs that limited the use of the drug to the clinical setting only and required direct observation of patients after every dose.

Sponsors considering outpatient self-administration of their investigational psychedelic drugs should be prepared to collect substantial data from well-designed studies to support the safety of at-home, unmonitored use. At Parexel, we have advised companies on the evaluations necessary to support at-home use. For example, suppose a sponsor is convinced that the dose(s) of the investigational psychedelic will not induce hallucinogenic or psychogenic effects. In that case, they need to demonstrate in a controlled study (or studies) that their product can be used safely at home. For example, a simulated home environment must be used during early clinical development.

To justify at-home dosing, adequate dose-finding must have been completed, with every effort to identify the dose(s) at which there is minimal or no hallucinogenic effect. Very detailed information on CNS, hallucinogenic, abuse, and other adverse events (AEs) reflective of the anticipated psychedelic effects must be collected in all clinical trials. Information about drug diversion should also be collected.

Companies desiring at-home use of their products should solicit FDA input early, providing well-reasoned justification and strong supportive data. They should also actively seek clarification on the conditions under which at-home use may be acceptable and the data required to support this.

Sponsors considering outpatient self-administration of their investigational psychedelic drugs should be prepared to collect substantial data from well-designed studies to support the safety of at-home, unmonitored use.

5. Explore opportunities for expedited program designation

Although there are approved therapies for many psychiatric conditions, there is still an unmet medical need. For example, there are patients with treatment-resistant major depressive disorder (MDD) or bipolar disorder and a low rate of remission among PTSD patients. 

Psychedelic drugs offer a potentially effective new class of treatment for these patients with challenging-to-treat psychiatric conditions. A developer of new psychedelic medicines who conducts a well-designed nonclinical and clinical development program can seek expedited program designation, particularly fast track designation (FTD) and breakthrough therapy designation (BTD).

Obtaining FTD and BTD does not necessarily require identifying and evaluating novel efficacy or safety endpoints. A substantial improvement in benefit as measured by the usual endpoints for that indication (such as a substantial improvement in depression as measured by the Montgomery-Åsberg Depression Rating Scale in MDD trials) could support expedited designation. Demonstrating substantial benefits in a treatment-resistant population (namely, a population that has not experienced benefits with usual therapy) could also support expedited designation. The EMA has encouraged sponsors to present as promptly as possible efficacy results for consideration of PRIority Medicines (PRIME) designation.¹³ As of September 30, 2024, the FDA granted BTD to two investigational psychedelic products.¹⁴

Contributing Experts