Husch Blackwell is the the first Am Law 100 firm to offer counsel for companies in the emerging psychedelic industry. The firm represents clients around the world in major industries including energy and natural resources; financial services and capital markets; food and agribusiness; healthcare, life sciences and education; real estate, development and construction; and technology, manufacturing and transportation. For more information, visit huschblackwell.com.
Natasha Sumner, Kimberly Chew and Karen Luong are attorneys in Husch Blackwell LLP’s virtual office, The Link, and lead the firm’s Psychedelics & Emerging Therapies practice.
Husch Blackwell is the first Am Law 100 firm to establish a Psychedelics and Emerging Therapies practice group. How did this come to fruition?
We lateraled to Husch Blackwell together in April 2021 as part of a larger team. We have been following the research and development of these medicines for psychiatric conditions such as PTSD and treatment-resistant depression. The FDA is currently overseeing Phase I, II and III studies exploring the potential therapeutic benefit of psychoactive substances such as MDMA, psilocybin, LSD and DMT — some of which have received Breakthrough Therapy designation for PTSD and treatment resistant depression. We have a personal connection to this work as we all have family members who have suffered from such debilitating conditions and are drawn to the clinical trial successes which bring promise that psychedelics could become efficacious treatments.
We pitched the idea of formalizing a group dedicated to assisting companies, non-profits and academic medical centers navigate the highly complex legal and regulatory issues facing innovators and researchers in this burgeoning industry. The firm understood that the mental health market is underserved and that the ongoing research demonstrated that certain Schedule 1 substances could be medically useful in treating certain mental health disorders. As the first large national law firm to establish a practice group devoted to cannabis, and as the utility and acceptance of psychedelic therapies have gained a foothold across the medical community, the firm understood the value of establishing our Psychedelics & Emerging Therapies as a practice group to represent clients in this growing area of treatment.
How does Husch Blackwell intend to assist or guide innovators in the psychedelics industry?
As an Am Law 100 firm with over 800 attorneys, Husch Blackwell understood that the firm is uniquely positioned to provide a multidisciplinary approach with a depth of knowledge that would be of service to this new industry. Similar to the early days of the medical cannabis movement, psychedelic drugs such as MDMA, psilocybin, LSD, ketamine and DMT are emerging in a complex and difficult legal and regulatory environment that can frustrate efforts to develop new therapies. Our team guides researchers, manufacturers, investors, clinicians and other participants around and through the myriad obstacles that result from the patchwork of state and federal laws regulating Schedule I controlled substances, including the Controlled Substances Act (CSA), Money Laundering Control Act (MLCA), various criminal statutes that cover the sale and consumption of psychedelics, and various state legal and regulatory regimes.
What expertise can Husch Blackwell offer to Psychedelic companies looking for assistance in navigating the challenging legal and regulatory landscape?
Our team is multidisciplinary by nature and integrates subject-matter authorities who can drill down into relevant issues at every phase of research, development, commercialization, and medical practice. We assist entrepreneurs and investors in forming ventures and developing governance structures best suited for operation in the psychedelic industry. Once established, clients turn to our regulatory and finance lawyers to assist with operationalizing and funding the enterprise. Our clients benefit from our attorneys’ comprehensive experience in Food & Drug Administration (FDA) regulations and scientific expertise, handling matters involving development of premarket strategies for controlled substances, preparing and prosecuting investigational new drug (IND) exemptions and new drug applications (NDA), compliance with current good manufacturing practice (cGMP) requirements applicable to botanical drug substances and products, as well as enforcement matters for pharmaceuticals, digital technologies and medical devices. Additionally, our team comprises lawyers from our nationally recognized healthcare industry group who have deep experience with clinical trial frameworks, including third-party contracts with contract research organizations (CROs), principal investigators (PIs) and contract manufacturers of investigational drug substances and products; informed consent; and interactions with institutional review boards (IRBs) concerning protocols and study monitoring. Further, we have assisted businesses in opening ketamine clinics, handling issues ranging from corporate formation to compliance with healthcare regulations in various states.
Our team provides its psychedelic and emerging therapies clients with a full suite of legal services that bear upon the development of new products and therapies, including:
- Corporate & Medical Real Estate
- Employee Benefits & Executive Compensation
- FDA, DEA, and State Law Regulation and Compliance
- Intellectual Property
- International Trade & Supply Chain
- Labor & Employment
- Litigation & Alternative Dispute Resolution
- Products Liability
- Securities & Corporate Governance
Do you think that there is a stigma around psychedelic drugs that is preventing regulators from advancing psychedelic medicine and research?
“Psychedelic drugs” is a loose term for substances that have psychoactive properties and are active ingredients intended to furnish pharmacological activity or other direct effect in the diagnosis, cure, mitigation, treatment, or prevention of disease or to affect the structure or any function of the human body.
Psychedelic drugs have been traditionally sourced from plants. Knowledge and use of these substances, in its broadest sense, is not new. Indigenous use of plant medicines, such as psilocybin, has been practiced for thousands of years. Recreational use in the 1960s and 1970s counterculture caused psychedelics to become stigmatized, and research on potential medicinal and therapeutic uses were, and continue to be, delayed by decades as a result.
The stigma around psychedelics has led to these substances to be listed as Schedule 1 drugs under the Controlled Substances Act, meaning that the government views these substances as being addictive and having “no currently accepted medical use.” It took decades of effort for research groups, such as the Multidisciplinary Association for Psychedelic Studies, to show the medicinal benefit of some of these substances in the right controlled setting and with the right support. The Schedule 1 designation adds layers of complexity to manufacturing, obtaining, and administering such substances in a clinical trial setting. The good news is that we are seeing research groups navigate these complexities and work with the regulators to move this emerging therapy forward, with the FDA granting Breakthrough Therapy Designation to some of these promising substances despite their Schedule 1 status, but it is fraught with frustrations.
How is the legalization of psychedelic drugs for medicinal therapies similar and different to the cannabis movement?
Both movements involve Schedule 1 substances that, despite their categorization, do seem to have medical benefits. How each industry has approached this conundrum, has diverged in recent years. The psychedelics movement has taken a more pharmaceutical route toward legalization, focusing on clinical trials and protocols that administer the drugs in controlled settings with licensed providers, in conjunction with psychotherapy. The cannabis movement did start out as a movement for medical marijuana, and that is how most states first legalized it. However, the cannabis movement – and with it, the market - then shifted largely toward adult recreational use, which is more of a de-scheduling strategy (as opposed to re-scheduling). While Marinol did get approved and re-scheduled by the FDA, we have generally seen cannabis pharmaceutical research and clinical trials lag behind psychedelics. This may be due to the nature of psychedelic medicines, and the fact that their potency and hallucinogenic effects do not lend them to recreational use the same way marijuana might. How are the regulations around medicinal psychedelics different from the US and Canada? Or even state-by-state?
How are the regulations around medicinal psychedelics different from the US and Canada? Or even state-by-state?
Some cities (Denver, Oakland, Santa Cruz) have decriminalized the use of certain psychedelics. Oregon has an entire program (Ballot Measure 109) dedicated to allowing the use of psychedelics in a therapeutic setting. We are seeing more and more states putting laws on the ballot to either decriminalize or legalize the use of psychedelics such as California, Washington, and Colorado. We don’t have in-depth knowledge about Canadian law, but we do know that a lot of the psychedelic research is coming out of Canada.
How does the current legal and regulatory environment in the US frustrate efforts to research these drugs for use in new therapies?
The biggest and most obvious hurdle is the status of most psychedelics as Schedule 1 controlled substances, making them federally illegal. The process for obtaining DEA Schedule 1 licenses, and DEA production and manufacturing quotas, all present roadblocks to companies researching these therapies. When certain states begin permitting the use of schedule 1 psychedelics (such as will happen in Oregon), we can expect to see many of the similar headaches that cannabis companies deal with every day relating to taxes, banking, insurance, and real estate leasing.
Are regulatory restrictions the biggest barrier to improved access to psychedelics for medical treatments and therapies?
Yes. And we would like to add that it is especially egregious that current restrictions bar access to psychedelic therapies for end-of-life patients. We will never understand why a dying patient in hospice is, today, able to choose to die by thirst or starvation, yet unable to receive psychedelic therapy that might not only ease physical pain but allow them to deal emotionally with their impending death. The rationale for such a policy is weak to nonexistent and we hope the ongoing litigation on this topic, combined with the promising research and clinical trial results of recent times, will change the minds of the public and the government.
What excites you the most about leading the Psychedelics and Emerging Therapies team at Husch Blackwell?
We are excited to be at the forefront of a new and emerging practice area that will help a lot of people who struggle with mental health and physical health issues that currently have no real treatment. We have family members who suffered from PTSD their entire lives and we ourselves were impacted by their illness, so a treatment like MDMA for PTSD will be beneficial not only to those suffering but also their family members.
What do you see as being the most clear and urgent legal question that needs to be addressed for psychedelic companies, clinical trials, and therapies?
As states begin to decriminalize or legalize the use of psychedelics, one of the biggest questions is how that will play out considering these drugs are all still federally illegal. While the history of the cannabis industry may seem informative, the psychedelic industry is quite a bit different because the focus is on the medical use and much less on recreational use. As mentioned, Oregon has legalized the use of psilocybin, but how that will actually be implemented remains to be seen as psilocybin is still a Schedule I drug. One of the other big questions is whether any of these drugs will be rescheduled, and then how states will follow.