Earlier this year, Australia became the first country globally to legalize the medical use of psychedelics. This comes after the country’s Therapeutic Goods Administration approved the use of MDMA and psilocybin by individuals with eligible mental health conditions.
This agency reclassified psilocybin as well as MDMA as Schedule 8 substances, prior to which they were considered prohibited substances. Beginning July 1, 2023, authorized practitioners will be allowed to prescribe psilocybin for treatment-resistant depression and MDMA for PTSD, together with psychotherapy. Despite this huge step forward, however, there are still issues to resolve before this can benefit those who need it most.
One major issue is whether psychedelic drugs will be subsidized, given the insufficient data on their cost-effectiveness in comparison to other therapies. Regulatory bodies will be in charge of approving these therapies for public subsidy, which will not be as easy feat. It is estimated that psychedelic treatments will cost between $20,000–$30,000, which includes the medicines’ cost and therapist session charges.
Clinical trials in Australia used pharmaceutical-grade MDMA and psilocybin, which were mainly supplied by not-for-profit organizations based in the United States, including MAPS and the Usona Institute.
For the drugs to receive subsidy approvals, the Pharmaceutical Benefits Advisory Committee will need to be involved. This independent body advises the federal minister of health on drugs to be included in the Pharmaceutical Benefits Scheme. Detailed submissions will be needed expounding the drugs’ effectiveness, how they will be prescribed and their safety as well as cost-effectiveness in comparison with alternatives.
The drugs will also need to be included in the Medicare Benefits Schedule, which finances services such as diagnostics, blood tests and allied health services.
Presently, MDMA has only three studies backing its use in treating post-traumatic stress disorder while there are no studies on the cost-effectiveness of psilocybin.
Additionally, the country will need to boost the potential for local production to help reduce imports. At the moment, however, this remains illegal.
Another issue to be considered is the number of individuals that will prescribe these drugs in routine practice. The risk of prescribing these drugs for uses not listed by the Therapeutic Goods Administration has increased with their reclassification. This concern is based off estimates showing that more than 40% of anti-psychotic drug use is off-label.
To reduce this risk, psychiatrists will require approval under the Authorized Prescriber Scheme to receive approval to prescribe the drugs. This can only be done once they’ve been granted approval by a human research ethics committee.
The issues that Australia has to address in order to make psychedelics treatment accessible and affordable are likely to be faced by other jurisdictions, including in the United States, which analysts think could soon approve MDMA. These affordability challenges are matters that startups such as Field Trip Health Ltd. (OTC: FTHWF) (TSX: FTHW) need to think about because the answers or solutions they come up with could ease the uptake of the treatments they develop.
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