By Naomi Carr

Updated: 28 May 2024 & medically reviewed by Dr. David Miles

Research and evidence for the therapeutic use of psychedelic substances have been steadily increasing in recent years, prompting the question of how these medications will be marketed and funded. Beginning with donations and grants, many of these studies and trials are now being funded by private companies, leading to a fear that the focus will turn to profit-making rather than healing.

Psychedelic Therapy: Is Big Pharma Funding a Concern?

A brief history of psychedelic research and therapeutic uses

Psychedelic substances have been used historically by indigenous communities for thousands of years in various parts of the world for spiritual and ceremonial purposes. The Western world began to take notice of these substances in the 1900s, with research into their effects starting in the 1950s.[1]

Psychedelic research was halted in the 1970s after most psychedelics, including LSD and psilocybin, were listed as Schedule I substances by the United Nations conventions. For the next 40 years, very little research took place. In the 1990s and early 2000s, interest in this area of research was revived and has since gained a lot of traction.[2]

Since then, numerous studies have taken place investigating the therapeutic benefits of various psychedelic substances. Many have been deemed breakthrough treatments for mental health conditions such as depression, anxiety, and substance use disorders.[3]

What does current research say about the therapeutic benefits of psychedelics?

Currently, research is ongoing into the benefits of psychedelic treatments, with many Phase II and III trials being completed with success. This progress indicates that there is a likelihood for certain substances to be approved by the Food & Drug Administration (FDA) in the coming years.[1][2]

Many nonprofit organizations have focused on the development and research of psychedelic treatments for mental health conditions. Many of the leading studies and trials have been conducted by organizations such as the Multidisciplinary Association for Psychedelic Studies (MAPS) and the John Hopkins University Center for Psychedelic and Consciousness Research

MAPS has completed two Phase III trials on the use of MDMA-assisted therapy for post-traumatic stress disorder (PTSD), submitting a New Drug Application to the FDA which has been approved for review. [4]

Studies of psychedelic effects have included: [1][2][5]

Many of these treatments are found to have significant and lasting effects within one to three sessions, unlike typical mental health medications such as antidepressants, which can take several weeks or months to take effect. [2]

The FDA has approved LSD, MDMA, and psilocybin for investigatory studies. However, all psychedelics remain under UN scheduling laws, requiring more evidence in order to be approved for public use. [6]

Where does the funding come from?

Nonprofit organizations investigating psychedelic-assisted therapies have consistently relied mostly on grants and philanthropic donations from foundations or individuals. 

For example, MAPS has raised over $140 million for psychedelic research from grants and foundations since its inception in 1986. [7]

John Hopkins Psychedelics has recently been given a federal grant of almost $4 million from the National Institute of Health (NIH) department, the National Institute on Drug Abuse. This grant was given to fund research on the use of psilocybin as a treatment for tobacco addiction. [8]

Current views

With the need for extensive and rigorous testing, research into psychedelic-assisted therapies is very costly and time-consuming. Despite the large donations made to nonprofit organizations over the years, the need for additional investors has increased. 

For example, MAPS founder, Rick Doblin, reported that he had hoped for the organization to continue to be philanthropically funded but has been unable to maintain this due to ongoing costs. The MAPS pharmaceutical arm has taken funds from several private investors, leading to a name change from MAPS Public Benefit Corporation to Lykos Therapeutics.[9]

Several for-profit companies are now taking an interest in psychedelic research, considering the financial benefits of this industry. Big Pharma companies have also expressed interest, although the concern is with the lack of patents and intellectual property. Naturally occurring substances, as are found in most psychedelics, cannot be easily patented.[10]

To patent substances, companies are creating alternatives. For example, COMPASS Pathways has created a laboratory-made psilocybin, making numerous patent applications. Others have considered making psychedelic substances available as lozenges or films. Several companies have also tried to patent DMT vape pen cartridges for therapeutic use.[9][11]

Some companies have been working on derivatives of natural substances, intending to remove some of the negative side effects, such as cardiac issues or addictive properties, or to reduce the hallucinogenic effects while maintaining the psychological benefits.

Some experts have expressed concerns with this. They fear these approaches will rush or tarnish therapeutic research, leading to potential risks or uncertainties and focusing solely on making a profit.[9]


It is considered likely that psychedelic-assisted therapies will become a mainstream treatment option in the upcoming years. With increasing private investment, there are suggestions that this could be a multibillion-dollar industry within the next 5 years, despite potential issues around its implementation.[12]

Rigorous and extensive testing must continue with naturally occurring psychedelic substances and any derivatives or alternatives that are made. This will continue to be very costly and time-consuming but will ensure the safety of these products for public use.

Risks include: 

  • Psychedelics can cause or worsen mental health issues such as mania or psychosis, particularly in high-risk groups. Studies on these substances do not typically include high-risk individuals, although these products may be available to these groups once approved for public use.[1][2]

  • Psychedelic-assisted therapy will be very costly to utilize, with estimations of $4,000-20,000 per person. It may be that some insurers will cover these treatments, although this will also require extensive evidence to be considered.[13]

  • With decades-old stigma and fear around psychedelic substances, there is concern that some doctors may be unwilling to prescribe these treatments and some individuals will be unwilling to try them. [11]

  • Private companies and Big Pharma may control the market on psychedelics, making billions of dollars on their production and sale. This will not only lead to potential risks for the individuals using these substances medicinally but is also likely to lead to the loss of recognition of their cultural significance and origins among Native groups.[14]