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Psychedelic Companies Keenly Aware Of Creating Therapies As Healthcare Reimbursement Possibility Looms

In the quest to design effective and affordable psychedelic treatments for a range of maladies that include PTSD and depression, one key thought on the minds of company executives and clinicians alike seems to be how to motivate healthcare insurance companies to cover the cost of psychedelic therapies.

Already, major healthcare payers are recognizing the efficacy of psychedelic therapies and making treatments like intravenous ketamine for treatment-resistant depression eligible for reimbursement. Last week, Novamind Inc. (OTC:NVMDF), a mental health company specializing in psychedelic medicine, announced coverage of treatments by health insurance giant Blue Cross Blue Shield.  

“This initial success with insurance coverage of ketamine is promising for the future of psychiatry because it sends a strong signal that payors are interested in more effective treatments for mental health conditions as supporting research emerges,” said Dr. Reid Robison, Novamind’s chief medical officer. “For ketamine therapy to reach the masses, many more insurance companies will need to adjust their coverage policies.”

While ketamine has been used for many decades as an anesthetic, it’s clinical use as a treatment for depression has gained momentum over the last couple of years. The success of the drug when treating depression is attractive to patients for its relatively short treatment time, 1-2 hours per session, as well as its prolonged ability to create neural growth that helps users overcome depressive states.

Health insurance companies are keenly aware of the demand for alternative therapies needed for the more than 50 percent of patients receiving therapy for major depressive disorder (MDD) who do not respond to approved depression medications. Insurance payors know that there is a mammoth unmet population they can tap that will inevitably engage with psychedelic therapies in the future.

“This is a game changer,” says John Krystal, MD, chief psychiatrist at Yale Medicine and one of the forerunners of ketamine research in the U.S. “With most medications, like valium, the anti-anxiety effect you get only lasts when it is in your system. When the valium goes away, you can get rebound anxiety. When you take ketamine, it triggers reactions in your cortex that enable brain connections to regrow. It’s the reaction to ketamine, not the presence of ketamine in the body that constitutes its effects.”

Toronto-based mental health clinic Field Trip Health (NASDAQ:FTRP), which has eight ketamine-assisted therapy treatment centers across the U.S. and Canada, is in the process of expanding its psychedelic molecules catalog and creating a psilocybin analog that seeks to decrease the time of a psychedelic experience to just two hours long, as opposed to the current duration of roughly five to seven hours with conventional psilocybin.

Nathan Bryson, chief scientific officer at Field Trip, told Forbes, that long trips are not everybody. “There’s been enough evidence out there to show that a short trip can work just as good as a long trip. It’s the intensity of the hallucinogenic response, or the trip, not the time.”

That shortened timeframe will certainly look attractive to patients, many with busy lives, and potentially attract a greater number of people interested in utilizing psychedelic therapies.

Still, there are patients who will embrace longer psychedelic treatments, like MDMA-assisted therapy, which is very close to receiving FDA approval.

Sessions designed to treat PTSD tend to last eight hours or more. Clinical trials funded by the Multidisciplinary Association for Psychedelic Studies (MAPS), led by founder and executive director Rick Doblin, are showing remarkable success in treating people with severe PTSD. Winning FDA approval would give MAPS a head start to market its MDMA-guided treatments for PTSD.

“If we do succeed with our second Phase 3 study of MDMA-assisted therapy for PTSD, the whole field of psychedelic psychotherapy will have been proven in one instance, serving as the pathbreaker with the FDA,” Doblin tweeted earlier this month.

With the prospect of FDA approval, which experts say could happen as early as 2023, combined with MAPS’ position of leading the MDMA-assisted therapy market, the organization will surely lead lobbying efforts to induce healthcare insurance companies to cover such treatments.

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