The race to patent psychedelic drugs might be over before it starts

Ravers have been ‘candyflipping’ — taking MDMA and LSD together — since the former hit the party scene in the 1980s, and in June last year a company patented it.

MindMed was allowed to patent its single dose combination of MDMA and any psychedelic (as opposed to fumbling around under a strobe light to drop a tab and then a pill), at a specific measure, and specifically as a medicine rather than “a single session of substance abuse”.

The US Patent Office found that, under those parameters, MindMed’s idea was a patent-worthy invention, to the horror of journalists and patent lawyers in the US who fear a replication of the kind of behaviour that has helped to keep drug prices artificially high in their country.

But as the psychedelic medicine gold rush accelerates, there are many ways to game the system and some companies are testing the limits of patent law.

“People will file and, and they’ll see how far they can push it,” says Australian patent attorney Seán Klinkradt, a neuroscientist and patent attorney with Baxter IP.

“I can draft you a patent today for a wheelbarrow. That doesn’t mean that we’re going to get it.”

That’s because a patentable invention must be novel, new, and not obvious to someone who is familiar with the “art”, or any evidence the idea is already known — hence why the candyflipping patent, as it’s now known, is confusing.

US and Australian rules prevent patents over natural substances, such as psilocybin itself, but modified formulations are fair game.

To patent or not to patent

Australia is a world leader in psychedelics regulation: in February it was the first to approve psilocybin for treatment-resistant depression and MDMA for PTSD.

But it’s a laggard on patents.

A search of the Australian Patent Office for MDMA, ayahuasca, psilocybin, LSD, ketamine as an antidepressant and psychedelics brings up 72 patent applications in Australia since the 1950s. Eight of these applications are by Australian entities, and only one of those has secured a patent: local charity Mind Medicine Australia for an MDMA synthesis.

Yet some are questioning whether patents are right for psychedelics.

The Multidisciplinary Association for Psychedelic Studies (MAPS), which launched in 1986, and Usona Institute are pressing for an open science approach — one that will keep competition open and, hopefully, prices in reach for people who can’t afford multi-thousand dollar therapy sessions.

Australia is a world leader in psychedelics regulation.

“MAPS has certainly been a flag bearer for open science. They’ve been commendable in the degree to which they have communicated their research, their protocols and their outcomes,” says Martin Williams, president of psychedelics research not-for-profit Prism and a Monash University MDMA and psilocybin researcher.

“But they’ve still had problems with their PR. As much as I actively support it, unfortunately it is a somewhat naive framework in this current climate.”

He told Cosmos Weekly the only way to shepherd clinically tested psychedelic medicines through the $US1-3 billion, eight to ten year discovery-to-market process is to take out some insurance over the IP at the start with a 20-year patent.

“Unfortunately in this commercial context, there is very limited scope [for open science],” he says.

Fulbright scholar and FPA Patent Attorneys associate principal Danny Gelman agrees: he’s yet to see good examples of where open pharmaceutical science works.

“Patenting is open science. Because in exchange for the chance to get limited monopoly rights, you have to disclose all the details of your invention. And so it is all put out in the public domain,” he said.

Psychedelics aren’t special

Psychedelic medicine is just medicine, Gelman says.

Which means, despite the fact that ketamine is the only legal psychedelic in the US, it is where the big money will be made.

Australian company Psylo is setting up a base in the US with a plan to take the hallucination out of the hallucinogen, in a process that requires “needle-in-a-haystack, large scale computational searching” to find the right candidates, says chief scientific officer Sam Banister.

Psylo has three Australian and three international patent applications underway for compounds that bind to 5-HT2A receptors which, Psylo hopes, block the hallucinatory effects of psychedelics.

All of these costs are upfront. If a Psylo drug is ever commercialised, the final owner will have a small window to recoup the cost of building it — and this is why new drugs still on patent are eye-wateringly expensive.

“In the pharmaceutical industry, patent exclusivity is always for a brief window,” Banister told Cosmos Weekly. 

“Really innovative drug development needs some period of exclusivity in order to recover the costs that were involved in developing those drugs and to incentivize the development of medicines.”

Bad patents

Patent controversies have dogged the burgeoning psychedelics industry.

In 2020, US company Compass Pathways tried to patent the use of psilocybin for a sweep of neurological and mental disorders; the way therapists touch patients during a session; and even the acts of listening to music or lying down during treatment.

That application is still waiting for a judgement. Klinkradt says it is unlikely to succeed.

Bad patents disclose something new but without any data to back them up, making them unenforceable but preventing others from getting those rights, or they jam up competition by ‘evergreening’ — making small changes to an existing drug and extending the patent — or ‘thicketting’ by obtaining so many related patents over one idea that new entrants must hack through a legal thicket.

Ketamine is a cautionary tale for what could happen in psychedelics medicine.

Ketamine is an anaesthetic but used off-label as a depression treatment. Then, in 2013, pharma company Janssen patented a nasal delivery system and subtly modified molecule, which drug regulators around the world later approved.

But in 2021 a meta-analysis found generic ketamine is a more effective depression treatment.

Patent protection gave Janssen the exclusivity period it needed to run clinical trials and get regulatory approval. But no one will run those trials on a cheap, freely available generic because there is no chance of recouping costs at the end.

“We fear that without action by policymakers, the ketamine story is a harbinger of things to come for psychedelics,” wrote two Harvard Law School professors in a 2022 essay.

“They can patent subtle variations on widely used natural compounds, or methods of administering them, preventing competitors from entering the field.”

In Australia, the experts say trust the process.

Restrictions will fall away over time until psychedelics are freely available for medical or recreational use.

“The patent system has shown time and time again, that it does hold up, it doesn’t let people patent known uses of these drugs,” says Gelman.

“That’s where this whole concept of bad patents comes into the fray. But the gatekeepers do their job. And, actually, the ability for people to get their different rights through the patent system drives diversity of ideas in the sector, because you do need to find a way to differentiate your research from your competitors.”

But could all of this be for nothing?

Banister and Williams believe psychedelics will track the evolution of the legal marijuana industry.

Restrictions will fall away over time until psychedelics are freely available for medical or recreational use.

Medicines will range from expensive patent-protected products tailored to specific conditions, to a mid-tier Swiss army knife model that can be used for a range of illnesses.

But unlike traditional pharmaceuticals, the money won’t be in the medicine itself, it will be in selling it through a clinic.

First, the patent race to the awakening is on.

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