NIH Archives - Green Market Report

Dave HodesJuly 26, 2022


The National Institutes of Health (NIH), the world’s largest funder of medical research, has been taking a keen interest in psychedelics over the last few years. 

The NIH invests about $41.7 billion annually in medical research mostly in the U.S., with Texas getting the most ($6.7 billion). More than 80 percent of NIH’s funding is awarded for extramural research, largely through almost 50,000 competitive grants to more than 300,000 researchers at more than 2,500 universities, medical schools, and other research institutions in every state.

There are currently 57 NIH-funded projects about psychedelics (6 on psilocybin alone begun in the last three years), totaling $34.4 million, which includes 36 basic and applied research projects for the National Institute of Mental Health (NIMH) funded by $15.4 million. 

The NIH has worked closely with the FDA, DEA, and the White House Office of National Drug Control Policy on a proposed framework to facilitate the process of obtaining a DEA registration to conduct research with controlled substances, including psychedelics.

But even as the NIH creates more pathways to psychedelics research—such as the $3 million in funding to researchers at Johns Hopkins Medicine for the first federal grant in 50 years to explore the potential impacts of a psychedelic (psilocybin) on tobacco addiction—the organization still appears to be holding off digging deeper into psychedelics research until the industry addresses what the NIH says are shortcomings in psychedelics research.

In a June 15 letter responding to an inquiry by Congressmen Brian Schatz (D-HI) and Cory Booker (D-NJ) in May about what the NIH is doing regarding psychedelics, Dr. Joshua Gordon, the director of the NIMH, and Dr. Nora Volkow, director of the National Institute on Drug Abuse (NIDA), pointed out that there is a “knowledge gap” problem with psychedelics research, in part due to the lack of participant diversity in clinical trials to date. This includes both racial and ethnic diversity. 

They said that they noticed a lack of participants with diverse medical histories, as most psychedelics trials exclude potential participants with a family or personal history of psychosis or suicidal thoughts or behaviors. NIH researchers have also questioned the conduct of participants and therapists during psychedelics sessions.

The NIMH has been supporting research on psychedelics for some time, according to Dr. Gordon speaking at the NIH Workshop on Psychedelics as Therapeutics in January, conducted by the NIMH, the principal federal agency responsible for research on mental illness; the National Institute on Drug Abuse (NIDA), which has already partnered with psychedelic companies; and the National Institute on Alcohol Abuse and Alcoholism (NIAAA). 

The NIMH collaborated on the first psychedelic to result in any kind of FDA approval for medication derived from ketamine (Spravato). “We’ve been supporting research on ketamine, both at the NIMH in the full research program and on other sites for a couple of decades,” Gordon said during the workshop. “And in fact, it does seem like ketamine can mean effective therapy, rapidly acting therapy for treatment-resistant depression. And it’s not only ketamine, but of course, esketamine, which was developed by a drug company, tested and shown to be effective in treatment-resistant depression through a randomized clinical trial. It is now FDA approved.”

One pathway for NIH funding is in understanding the neurobiological effects of psychedelic medications, including ketamine, but also other psychedelics, Gordon said, citing a paper published in “Neuron” showing that psilocybin has rapid and persistent effects on the growth of dendritic spines in the prefrontal cortex in vivo in mice. “So we can think of NIMH’s interests in studying psychedelics, both in terms of proving that they work and also in terms of demonstrating the mechanisms by which they work. And in fact, the mechanism focus is really part and parcel of the drug development priorities throughout NIMH, when we think of how we want to try to study novel therapies,” Gordon said. 

He outlined various pathways for companies to get NIMH funding. “But we have to acknowledge that the NIMH has not played a significant role at this point in the study of the more recent developments with psilocybin and MDMA and other drugs, as they are being taken up by nonprofits and other companies to try to demonstrate their efficacy in disorders such as PTSD and depression.”

Also during the NIH workshop, Dr. Paul Appelbaum, psychiatrist and the director of the Division of Law, Ethics and Psychiatry at Columbia University, discussed the importance of designing research to anticipate the actual clinical use of psychedelics. “So assuming studies continue to suggest therapeutic efficacy for a number of disorders for various psychedelic and related medications, they will become at some point available for clinical use,” he said. “And I would suggest that it’s important for the people who are designing studies to anticipate the issues that will, without doubt, arise as part of that use and design studies that can address those issues. This is often ignored in pre-marketing studies, but I want to suggest that it shouldn’t be ignored here.”

Randomized double-blind tests are problematic in psychedelics, according to Suresh Muthukumaraswamy, a neuropsychopharmacologist from the University of Auckland in New Zealand, also presenting at the NIH workshop. 

He said that the purpose of clinical trials is to establish the safety and efficacy of their interventions. “The way researchers establish efficacy is by trying to demonstrate a causal effect between the treatment and outcome,” he said. “The issue we face in psychedelics is that we have very large perceptual experiences that participants are going to experience. So it becomes pretty obvious to the participant about which intervention they might have received,” he said. “So herein lies the crux of the problem. Given the obvious psychoactive effects of psychedelic drugs, those in the active intervention group will likely know that they’ve received the treatment, and therefore they might show a greater treatment response due to expectancy effects. On the other hand, those participants that receive a placebo intervention may know that they have received the placebo intervention and their disappointment may actually decrease in what they would normally have as a placebo response. So we have two push-pull mechanisms, where you might have enhanced the effects of the usual expectancy when participants know that they’ve received the treatment, and a decreased placebo response when they know they’ve received the placebo intervention.”

Dr. Volkow, in her wrap-up of the workshop, said that, at this time, she feels a level of being overwhelmed in terms of a lot of the things for which there are no answers. “But at the same time, I see this as an incredible opportunity to modify the way that we are doing things,” she said. “What is it that the NIH can do to help accelerate research in this field so that we can truly understand what are the potentials and, ultimately, the application of interventions that are based on psychedelic drugs?” she said. “From the perspective of what is it that NIH can do to accelerate research, there are no two ways around it: We need to have a greater in-depth understanding of the characteristics of the drugs that we call psychedelics. I do recognize the concern that we just don’t limit the description of these psychedelic drugs to their pharmacological target. We need to go beyond that and understand the downstream effects the functional consequences,” she said. “As we work forward with the development and testing of psychedelic drugs, we need to bring the patients into the discussions so that the priorities and their concerns are actually incorporated into our research plans. I think we need to basically very clearly understand where we are in history, and what we’ve learned from the past, so that we do not commit the same mistakes and errors.”

Dave HodesMarch 4, 2022


When you see various agencies of the U.S. government getting involved in psychedelics, or changing their stance even a little (such as the DEA), that signals that the industry has hit its stride. 

Avenues of development open up, investor confidence increases, and researchers sense the ability to achieve goals that not only science but government supports. It begins to feel like everyone is on the same page. 

Here’s a look at what various government agencies are doing about psychedelics:


DEA. The Drug Enforcement Administration seems to want to help the psychedelics industry more than ever, but can’t help adding caveats about what that progress looks like. For example, the DEA reported in the Federal Registry on October 18, 2021 that there has been a significant increase in the use of schedule I hallucinogenic controlled substances for research and clinical trial purposes (MDMA and psilocybin chief among them), and that it has approved new applications for schedule I research registrations and new applications for registration from manufacturers and corresponding quota applications to grow, synthesize, extract, and manufacture dosage forms containing specific schedule I hallucinogenic substances for clinical trial purposes. The DEA also reported that it supports increased production quotas proposed for 2022 compared with production quotas for these substances in 2021. That’s good news for the industry—followed by more bad news. On January 14, 2022, the DEA proposed placing five tryptamine hallucinogens(4-OH-DiPT, 5-MeO-AMT, 5-MeO-MiPT, 5-MeO-DET, and DiP) on schedule I of the Controlled Substances Act. If finalized, this action would impose the regulatory controls and administrative, civil, and criminal sanctions applicable to schedule I controlled substances on anyone who handles (manufacture, distribute, reverse distribute, import, export, engage in research, conduct instructional activities or chemical analysis with, or possess), or proposes to handle these five specific controlled substances. That could be a problem for Field Trip, a psychedelics therapy company. “Field Trip’s FT-104 is a prodrug of 4-OH-DiPT, so this will add some paperwork and delays to their efforts in the U.S.,” Matt Baggott, co-founder and CEO of Tactogen, a pharmatech company, wrote in a tweet about the DEA news.It’s worth noting that HHS provided DEA with an analysis of these compounds in 2012 and DEA failed to act until now. This raises the question of whether this scheduling is in response to the increased interest in psychedelic medicine.”


FDA. Probably the most active government psychedelics supporter is the Food and Drug Administration because of the critical role it plays in assessing any drug that wants to be FDA-approved and sold to the public. The agency has picked up the pace in its work with psychedelics. But it is still charged with an exceptional sense of prudence when working to legitimize novel compounds. In a commentary published in the American Journal of Medicine in January, Attorney Matt Lamkin, associate professor at the University of Tulsa College of Law, discussed the role of the FDA as research into psychedelics explodes. “Incorporating psychedelic drugs into clinical practice will require peeling back multiple layers of legal prohibition, clarifying prescribing guidelines, and developing treatment models that work for drug makers, physicians, and payers.” He went on to cite various achievements of the FDA and psychedelics: granting breakthrough therapy status to expedite the development and review of multiple psychedelic drugs; approval in 2019 of esketamine as a therapy for treatment-resistant depression; the promising results from an FDA-approved phase 2 trial of psilocybin as a treatment for major depressive disorder; and in June, when researchers published results from a phase 3 trial—the final phase before seeking FDA approval—studying 3,4-methyl-enedioxymethamphetamine (MDMA) as a treatment for posttraumatic stress disorder. Still, Lamkin was cautious about how and what the FDA could do. “Although the psychedelic research revival is yielding promising results, challenges remain before these drugs will find their way into clinical practice. Yet this plodding process could enhance the likelihood that these therapies will actually take root,” Lamkin wrote. “Given the longstanding skepticism toward psychedelic interventions, moving too swiftly might risk a backlash that could further stall research. Proceeding both with caution and openness offers the best hope for harnessing the potential benefits of these drugs while mitigating their risks.”


NAS. The National Academies of Science, Engineering and Medicine is focusing more attention on the psychedelics arena. For example, on March 29, the NAS will be conducting a workshop exploring psychedelics and entactogens as treatments for psychiatric disorders. The NAS noted on its website about the workshop that, with activity and interest in this field continuing to grow, the workshop “will provide a venue to explore strategies for harnessing the potential of these agents to combat mental illness.” Invited speakers will discuss the neurobiology of the therapeutic effects, strategies for optimizing the safety, efficacy, and patient stratification, and lessons learned that may help the identification of new classes of therapeutic agents. The workshop will explore the unique challenges and considerations presented by compounds that induce profound changes in consciousness, including those related to clinical trial design, medical ethics, and the psychosocial contexts of drug administration. The workshop is sponsored by the Department of Health and Human Services and the National Science Foundation.


NIH. The National Institutes of Health discussed psychedelics favorably at the National Institutes of Health’s FY22 Budget and the State of Medical Research hearing before the Subcommittee on Labor, Health and Human Services Education and Related Agencies on May 26, 2021. “I think as we’ve learned more about how the brain works we began to realize that these are potential tools for research purposes and might be clinically beneficial,” Francis Collins, director of the NIH said, referring to psychedelics such as psilocybin and MDMA. Collins said there has been a resurgence of interest in psychedelic drugs, which for a while “were sort of considered not an area that researchers legitimately ought to go after.” Additionally, on October 20, 2021, Johns Hopkins Medicine announced that the National Institute on Drug Abuse (NIDA) within the NIH, had awarded a grant of $4 million to fund a study using psilocybin as a therapeutic agent for smoking cessation. It is the first grant awarded by the United States government for research on psilocybin for tobacco use in 50 years. The multi-site, three-year study will be led by researchers with Johns Hopkins Medicine in collaboration with researchers at the University of Alabama at Birmingham.


NSF. The National Science Foundation is stepping up its support of psychedelics studies. One example is a study on how psilocybin and LSD work on brain activity, funded in part by an NSF grant for a six year study of various interdisciplinary training elements for complex networks and systems. 


USDA. The U.S. Department of Agriculture is on the lookout for ketamine. According to a Consumer Reports analysis of data from the Food Safety and Inspection Service, a branch of the U.S. Department of Agriculture, trace amounts of ketamine may have appeared in the U.S. meat supply more often than was previously known, pointing to new testing technologies that can better show what’s in meat today. The data for Consumer Report’s assertion came from the USDA’s Food Safety and Inspection Service (FSIS), the agency responsible for ensuring the safety of the U.S. meat supply. Emilio Esteban, chief scientist for the FSIS, said that the results should be discounted because they came from unconfirmed screening tests. “These results are credible enough that you would expect the government to take the warning signs seriously,” says James E. Rogers, Ph.D., who was a microbiologist at the FSIS for 13 years before becoming director of food safety research and testing at Consumer Reports. “You would hope the results would prompt the agency to look into why these drugs may be present, what risks they could pose, and what could be done to protect consumers.”

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