Two years ago, the psychedelic bubble was all but bursting.
Lykos’ long-awaited FDA evaluation had just flopped. Regulators picked apart the study design behind the company’s phase 3 trials of an MDMA-assisted therapy for post-traumatic stress disorder, ultimately rejecting the application amid concerns about efficacy and safety.
But that one failure triggered a multitude of strategic shifts across the industry that, combined with extremely favorable policy changes, have helped ring in a banner year for the field in 2026.
Over just five months, the Trump administration directed the FDA to prioritize certain psychedelic drugs through an executive order and the agency finalized clear guidance for clinical trial design, a historic stumbling block for psychedelic developers. Compass Pathways’ COMP360 was put under rolling review with the FDA, with the potential for approval by year’s end. And Eli Lilly made a multibillion-dollar buy into the industry with the purchase of psychedelic drug developer AtaiBeckley.
If the FDA’s Sept. 14 public hearing on the future of psychedelics is any indication, the possibility of psychedelic therapies for PTSD or treatment-resistant depression in the U.S. has never been greater.
But even as the industry inches closer to an FDA go-ahead, the pathway to commercialization remains riddled with unknowns. From regulatory guidelines and credentialing to manufacturing and delivery, the realities of approved psychedelic medicine are far from decided. And the onus is on the drugmakers furthest down the pipeline to lead the way.
Regulatory runway
Even with an FDA approval in the bag, regulatory pressures on psychedelic treatments will continue to be steep. Foremost, psychedelics—or at least the approved variety—must be rescheduled by the DEA.
Currently, all psychedelics are Schedule 1, a category the DEA uses for substances that have a high potential for abuse, no medicinal value and lack safety even under medical supervision. No approved drug can go to market while its still Schedule 1, and the transition process could take months to years if a psychedelic approval comes through.
The federal process for scheduling a newly FDA-approved drug is expedited under current law, though the timing would depend on when the DEA receives the necessary FDA and HHS recommendations.
It’s also unclear exactly how the DEA would schedule an approved psychedelic product and its active ingredient. Johnson & Johnson’s Spravato, which contains the S-enantiomer of ketamine, was placed in Schedule III when it was approved in 2019. Ketamine was already a Schedule III controlled substance. While ketamine and esketamine are not true psychedelics, they’re dissociative anesthetics that cause patients to dissociate rather than hallucinate, and their regulatory trajectory may provide some framework for how formerly illicit substances can be repurposed into medicine.
Dane Stevens, CEO at Optimi Health, a psychedelic manufacturer and distributor in Canada, is hoping U.S. psychedelic treatments score a similar Schedule III designation or Schedule IV classification, which carries a lower potential for abuse than Schedule III.
In either case, that rescheduling process “could take a while,” Emma Wille, senior analyst at Norstella’s Citeline, a consultancy that helps pharma developers identify unmet needs, told Fierce in an interview. Though the current administration’s favor could accelerate that process, as it has with the FDA.
From there, the rules that shape the nascent psychedelic industry will likely be product-specific, taking shape around whichever candidate makes it through the FDA first, said Benjamin Yudkoff, M.D., a psychiatrist and co-founder of Lumin, a Boston-based ketamine and Spravato clinic that also plans to offer psychedelic treatment if it becomes available.
Many peg U.K.-based Compass Pathways as the regulatory frontrunner. The drugmaker’s lead asset, a synthetic formulation of psilocybin called COMP360, has shown significant success against treatment-resistant depression and is the first classic psychedelic to report phase 3 efficacy data.
Per Compass’s two phase 3 trials, a single dose of 25 mg of COMP360 significantly reduced symptom severity for patients whose depression was otherwise treatment-resistant. And two doses of COMP360 given three weeks apart produced a clinically meaningful reduction in depression severity in 39% of patients, with those patients continuing to experience the benefit 26 weeks after treatment.
That data is currently under FDA review as part of Compass’ rolling new drug application. The drugmaker is expected to finalize its NDA in the fourth quarter of 2026, with a possible approval and launch in the first half of 2027.
If Compass does snag the first psychedelic approval, it will go on to shape the industry’s “hard logistics,” like square footage requirements, a risk evaluation and mitigation strategy, how clinics enroll patients, and how treatment is ultimately scheduled and billed, Yudkoff said. Compass, or whichever company leads the way, will likely even shape the language.
“Do we call it a trip?” he asked, “or do we talk about outcomes?”
For its part, Compass Pathways has already partnered with five training organizations that will build curriculum to train healthcare providers to deliver COMP360 in the event of an approval.
“They’re sort of building from the clinic up,” Wille said. Every obstacle they’re able to smooth is a win for the products behind them. The race toward psychedelic approval and commercialization really is a “group project,” for which Compass shoulders a lot of the burden, she said.
The psychedelic balancing act
Approving psychedelic drugs themselves isn’t the only regulatory battle. Perhaps the biggest concern expressed by speakers at the FDA’s recent public hearing revolved around who would administer the new medicines and how the psychedelic workforce will be trained and regulated, should the drugs eventually pass muster with U.S. regulators.
By nature, psychedelic treatments are labor-intensive. Treatment sessions for the drugs furthest down the pipeline last anywhere from five to eight hours. However the FDA ultimately establishes staffing requirements during treatment sessions will have huge implications for cost and accessibility.
In Australia, where authorized psychiatrists can prescribe psilocybin for treatment-resistant depression and MDMA for PTSD under a special access framework, regulators require a treatment team of at least two members. The two medicines cost between 200 and 500 Australian dollars ($140 to $350) per dose, Stevens at Optimi, which manufactures the medications used in Australia, said. But the labor involved, including the cost of a facility and two monitoring providers, ramps up the cost to between 10,000 and 15,000 Australian dollars ($7,000 to $10,000) per visit, he said. “But a lot of that is being reimbursed by insurance now,” Stevens told Fierce.
In an effort to minimize staffing hurdles, drug developers like Compass Pathways and Definium have moved away from the traditional combination of psychedelics and talk therapy. Instead, their study designs rely on dosing session monitors or other forms of psychological support, licensed healthcare professionals who monitor the session for safety but don’t provide therapy.
This was a point of controversy at the FDA hearing, where several speakers condemned the psychedelic industry’s departure from talk therapy, calling it a crucial part of patient progress.
On the other hand, Wille said, including talk therapy as part of the treatment gets complicated, because “the FDA doesn’t regulate psychotherapy and no one really wants them to.”
There’s also much debate about what qualifies someone to deliver psychedelic treatment. Some stakeholders at the hearing pushed for a psychedelic medicine workforce overseen exclusively by psychiatrists. Others, many of whom come from the cottage industry that has assembled around psychedelic training, say a range of nurses and practitioners are sufficient, but the FDA needs to standardize training requirements and affirm a credentialing body. Several at the hearing said the FDA needs to draw lines in the sand and clarify specific roles for individual team members: nursing staff, prescribers and therapists.
Staff requirements will likely prove to be a balancing act between broad access and maximum patient safety. And what the agency decides will have direct effects on how psychedelic drugs scale post-launch.
If these drugs are even half as effective as the data suggest, then access is the mandate, Yudkoff said. A “training program needs to keep in mind that it can only be so burdensome. And the threshold to entry needs to be low enough to make these medications accessible,” he said.
Coming to commercialization
Once a psychedelic medicine is approved, rescheduled and equipped with guidelines, the next challenge will be delivering it at scale, a process some experts think will take the better part of a decade.
Optimi’s Stevens said staffing and supply shortages are to be expected as the field scales.
In Australia, prescribing was initially limited because there were too few credentialed psychedelic medicine providers and staff. He expects a similar bottleneck in the U.S. if an approval comes. And corresponding slowdowns on the supply side are also in the offing. Optimi is equipped to supply hundreds of thousands of patients, he said. But as long as these compounds remain Schedule I, manufacturers are unlikely to invest in the infrastructure needed to scale production early on.
There’s no clear home for these treatments either. From Yudkoff’s perspective, psychedelic treatments will fit the mission of many Spravato providers, but there’s little practical overlap.
An eight-hour COMP360 treatment, for instance, “won’t just slot into the esketamine clinics,” where typical appointments are just two hours, Wille said. Facilities will need dedicated rooms and staff for the longer trips. The more labor and space needed, the more prohibitive the costs could be for both practitioners and patients.
The lengthy intervention followed by three to six months of recovery is more like a “surgical model than anything done in traditional psychiatry,” Yudkoff said. For that reason, he believes flexibility will be the key for any early psychedelic delivery sites.
One exception, Wille and Yudkoff agree, could be AtaiBeckley’s BPL-003 and VLS-01, two DMT candidates acquired by Eli Lilly as part of its purchase of the company. Both candidates are being tested in treatment resistant depression, and unlike many of the other psychedelic candidates, DMT is a fast-acting. BPL-003 is delivered intranasally while VLS-01 dissolves under the tongue, and both are designed to fit within a roughly two-hour in-clinic treatment window.
The delivery approach could square nicely with existing infrastructure and have real commercial advantages. Still, potential commercialization is a ways out for either asset as Lilly awaits phase 3 and phase 2b results for BPL-003 and VLS-01, respectively.
Costly problems
The real-world value of psychedelic treatments may come down to durability, or how much relief patients get out of one of these expensive and intensive treatments. If the benefits last so that patients only need two to four visits each year, the model may prove financially sustainable.
Still, insurance coverage will be critical.
In Oregon, where psilocybin clinics are cash-pay, the cost of a single session runs between $1,000 and $3,000. The clientele inevitably skews wealthy and white.
And still, the network of psilocybin clinics that sprang up after the Oregon Psilocybin Services Act passed in 2020 is contracting under financial pressure. Roughly one-third of psilocybin service centers have closed their doors or surrendered their licenses since the program’s inception amid high operational costs.
The statewide program is funded in part through hefty fees, with service centers generally paying $10,000 annually for a license. This summer, the Oregon Health Authority introduced a proposal that could have significantly increased licensing fees, but the agency abandoned the proposed increases in September. While the Oregon program may offer some proof of concept, it’s also concrete evidence that access and infrastructure for future psychedelic treatments will hinge on payers’ involvement.
If drugmakers can show that their psychedelic compounds benefit a significant population, “then usually [they] have significant evidence to get it paid for,” said Kyle Sampson, an attorney at King & Spalding who specializes in clients with FDA-regulated products.
Coverage would likely follow, but limits should be expected, too.
These treatments will be “very expensive” for payers, Yudkoff said, noting that pharma middlemen will almost certainly take a restrictive approach as they look to maximize value and minimize overtreatment.
“How rollout looks on day one will be different than how rollout looks at year 2, and it will be very different from how rollout looks at year 10,” Yudkoff said. “And tolerating that uncertainty is baked into the sauce.”