Psychedelics are set to revolutionize mental health treatment. In addition to transforming the lives of the individuals who take them, this psychedelic renaissance is forecast to create a multi-billion dollar industry. A psychedelic gold-rush is currently underway, with pharmaceutical start-ups competing for the rights to profit from these ancient medicines. How can someone make money from a naturally occurring substance? Can a company patent psychedelics themselves? There are many important questions that need answers when considering psychedelic intellectual property.
What Is Intellectual Property?
Intellectual property refers to the ownership of something that has been created by a human mind. There are many types of intellectual property, for example patents, trademarks, and copyrights. They can cover an idea, a design or any other non-material creation. Their legal role is to make clear who has the right to profit from its use, in a way that can be enforced through the legal system. If you use intellectual property that belongs to someone else without their permission the legal system can be used to stop you from using it.
How Can A Psychedelic Startup Make Money?
A huge amount of money is flowing into the area of psychedelics. With these being largely ancient and naturally occurring substances, how can a company manage to profit from them? Multiple steps are involved in manufacturing and distributing a drug through the medical system. Pharmaceutical companies can profit by producing a substance using specific patented methods that only they are allowed to use.
They can also engage in drug development, attempting to create new compounds with modified properties, such as shorter acting psychedelics that could be used in one hour therapy sessions, for example. There are also companies that focus on the delivery side, such as clinics, but the big money is to be found in being the company that gets to manufacture and sell the substances themselves.
Can A Company Patent Natural Substances?
In 1981, a man named Loren Miller came back from the amazon with a sample of the ayahuasca vine. He filed a patent for this plant, dubbing it “Da Vine”. The patent was granted, making him the only person who could grow this plant in the US. Indigenous communities fought back against this patent with legal wins followed by losses until the patent expired in 2003. The ayahuasca patent was possible as individuals are allowed to patent specific types of plant. This is how it’s possible for companies to profit from breeding specific types of apple, for example. What if someone were to file a patent not for a plant, but for a naturally occurring chemical?
In 2019, the pharmaceutical startup Compass Pathways was granted a patent for psilocybin. For many, this created a fear that they might be able to prevent people from consuming psychedelic mushrooms through legal action. Fortunately, it is not possible to patent an already-existing naturally occurring compound. What was patented was a particular form of psilocybin that isn’t naturally occurring and a method for synthesising this compound in the lab. So, if you’re consuming psilocybin mushrooms in a place where they are legal, you need not fear that you’re infringing on the legal claims of any psychedelic companies.
Patenting Psychedelic Psychotherapy
In 2020, the same company filed a controversial patent for the basic elements of psychedelics psychotherapy. This included the use of soft furnishings and holding hands with the therapist. At this stage the patent has only been submitted, we’ll have to wait several years to find out if it is granted. Patents have also been filed for the right to treat specific disorders with psychedelics. Compass, for example, has filed a patent to treat anorexia with psilocybin.
The challenge to getting such a patent granted is to demonstrate that such a treatment is non-obvious and novel in some way. This can be done by adding specific elements to the treatment approach. Another approach is to file as many patent claims as possible and to see what sticks. Compass has filed for the right to treat a large number of disorders, including pyromania and skin-picking disorder. Time will tell if any of these patent claims are granted.
In order for a patent to be granted, the thing being patented must be novel in some sense. It’s not possible to patent something that is already existing or an obvious next step, some intellectual work must have gone into its production. The psilocybin patent, for example, came under scrutiny as it was argued that it didn’t significantly differ from the method used to synthesize psilocybin that was created by Albert Hoffman, discoverer of LSD and the first person to synthesize psilocybin.
Similarly, the basic elements of psychedelic psychotherapy have existed for decades. One way to satisfy this criterion of novelty in the psychics space is to create a new compound. This kind of drug development is currently underway, with pharmaceutical companies even attempting to create psychedelics that do not affect one’s subjective experience.
Nonprofits vs. For-Profit Companies
In contrast to the current issues playing out with psilocybin, MDMA-assisted psychotherapy has gone a very different route. The Multidisciplinary Association for Psychedelic Studies (MAPS) is largely behind the success of MDMA treatments for Post-Traumatic Stress Disorder (PTSD). MAPS is a non-profit and, in line with its “anti-patent” strategy, has not attempted to patent any aspect of MDMA-assisted psychedelic psychotherapy. MAPS has created a public benefit corporation that aims to turn a profit, but this money is funneled back into its non-profit activity.
The success of this approach shows that there are options other than patenting and profiting from already-existing approaches to psychedelic psychotherapy. Many decades of not-for-profit academic research has laid the foundation for psychedelic psychotherapy and a non-profit approach that prioritizes access over making money arguably raises fewer ethical issues.
Beyond the decades of research performed by scientists, our modern use of psychedelics rests on millennia of indigenous use. Having companies taking credit for these approaches now, and making vast amounts of money from these substances, can appear difficult to square with respecting the traditional origins of these plant medicines. This issue is of particular importance given the brutal suppression of indigenous practices like consuming mescaline-containing cacti in places like the US. Native American communities have long used peyote to help people suffering from alcohol addiction.
Journey Colab is a psychedelic company that is developing mescaline therapy for alcoholism but, rather than seeking to take sole credit for this therapy, they include indigenous communities as stakeholders. This approach shows one way in which we might be able to negotiate the ethical issues around parenting psychedelic therapies. Ethically dubious practices still occur however. For example, Compass Pathways recently filed a patent for psilocybin in Mexico, the home of the indigenous practices that reintroduced psilocybin mushrooms to the world.
A leading voice in the space of psychedelic intellectual property is Graham Pechenik of Calyx Law, a firm that specializes in cannabis and psychedelics. Graham argues that the issue does not necessarily come down to the question of whether or not to patent. He argues for a legal middle ground, using an approach known as an IP commons. “A commons would be a way of looking at IP that sits somewhere in between everything in this space being fully public vs. fully private.
It’s an approach where companies can work together to contribute IP to another organisation that could manage the IP of a group of companies, either for their own benefit or for the benefit of third parties. There’s a concern when people have patents that they are going to divert their resources and energy into policing the boundaries of their patents rather than innovation or otherwise benefitting the ecosystem.
A commons can work together to pool different rights to make the process of delivering psychedelic therapy more efficient. They can also be used to turn ethical principles into legally binding requirements as part of an IP license. If enough companies together create a critical mass of wanting to do this, they’re able to make that a cultural norm that has the power to transmit those principles to others.”
In many places, psychedelics are being decriminalized. Decriminalization represents an approach that sidesteps the free market, allowing people to grow and consume their own psychedelics. Alongside this there are movements for psilocybin therapy using mushrooms to be made legal, as occurred with measure 109 in Oregon, which was successfully passed in 2020. This approach requires no patents and prioritizes access for people who want to use these substances.
The fear with the behavior of companies wanting to make large profits in this space is they may seek to gain a monopoly, an approach that puts their profit before access. Compass pathways CEO George Goldsmith was reported to have contacted researchers at a local university in Oregon in an attempt to mobilize opposition to the measure. It seems likely that psychedelic therapy will be accessed by multiple routes in the future, but only if the psychedelic community remains aware of attempts to monopolize the space, a danger that can come with the logic of seeking to make large profits through the ownership of intellectual property.
This article was written by Dr. James Cooke with the help of Graham Pechenik.