Overview
A presidential executive order this week instructed federal health agencies to hasten evaluation of psychedelic therapies and to increase government-sponsored research into their use. The directive cited pressure from supporters of ibogaine, a compound drawing attention from prominent advocates including podcast host Joe Rogan. At present, nearly all psychedelic substances are classified in the United States as Schedule I controlled substances - the same designation applied to heroin and ecstasy - indicating they are considered to have no accepted medical use and a high potential for abuse.
Clinical goals and what disorders are being targeted
Clinical development of psychedelic-derived treatments has concentrated on patients who have not responded to existing therapeutic options. The most compelling clinical evidence so far comes from studies involving people with severe depression that is resistant to standard treatments, and from trials in individuals with post-traumatic stress disorder (PTSD). Researchers are also conducting earlier-stage studies exploring the potential of these compounds for a range of other conditions, including substance use disorders, borderline personality disorder, obsessive-compulsive disorder, anxiety, behaviors involving self-harm, chronic Lyme disease and fibromyalgia.
Mechanism of action and treatment model
Psychedelic-assisted therapies exert their effects primarily by stimulating proteins on the exterior of neurons that play a role in the brain's capacity to reorganize circuits, form new synaptic connections, and repair damaged pathways. These treatments differ from many conventional psychiatric medications in delivery - rather than daily self-administration, psychedelic medicines are typically given under medical supervision during a small number of sessions and are paired with intensive psychotherapy to support the therapeutic process.
Current legal and regulatory status around the world
Several countries have authorized limited medical use of psychedelic compounds or made pathways available for clinical psychotherapy. In Australia, the synthetic psychoactive MDMA is approved for PTSD, and psilocybin - the active psychedelic in certain mushrooms - is authorized for treatment-resistant depression. Switzerland permits restricted psilocybin psychotherapy, while Jamaica allows over-the-counter sales of psilocybin-containing products such as chocolates and teas. Plant-based psychedelics used in ayahuasca and mushrooms are permitted in Brazil and the Netherlands.
Within the U.S. and Europe, Johnson & Johnson's esketamine nasal spray Spravato is approved for treatment-resistant depression and for suicidal ideation. Esketamine, derived from one half of the ketamine molecule, is technically an anesthetic but has been classed as a non-classical psychedelic by some because of its mind-altering effects that can produce therapeutic benefits. Ketamine itself is approved in the United States for anesthesia but is commonly used off-label for depression.
Mexico has become a destination for individuals, including some U.S. military veterans, seeking ibogaine treatments, where this compound can be legally administered by medical practitioners.
Which candidates are nearest to regulatory approval?
Psilocybin-based therapies for treatment-resistant depression appear to be the frontrunners in regulatory pathways in the U.S. and Europe. In two late-stage trials, single oral doses of Compass Pathways' synthetic psilocybin candidate COMP360 produced reductions in depressive symptoms within days, with responses reported to last up to six months. Compass Pathways has indicated it expects to submit a new drug application to the U.S. Food and Drug Administration in late 2026.
Filament Health is testing a naturally derived psilocybin capsule, PEX010, in the United States and other jurisdictions for depression, PTSD and cancer-related distress. In 2025, PEX010 received the first compassionate use approval for a psilocybin drug in the European Union.
The development pipeline also includes ibogaine, sourced from the roots of the African shrub iboga, which has drawn attention from regulators who have vowed to accelerate research based on small studies in military veterans with traumatic brain injuries and addiction. Companies involved in ibogaine production cited in current development efforts include Psyence BioMed and Optimi Health.
Other compounds in active trials include a synthetic form of 5-MeO-DMT - a molecule originally identified in frog venom - being evaluated as a nasal spray for refractory depression and alcohol use disorder by Beckley Psytech in collaboration with Atai Life Sciences. Beckley is also studying psilocin, the active metabolite of psilocybin, in an intravenous formulation.
MDMA-based therapy has shown substantial results in late-stage trials. In two large Phase 3 studies, about two-thirds of participants who received an MDMA capsule from Lykos Therapeutics no longer met diagnostic criteria for PTSD at follow-up - roughly double the rate observed in control groups. Although many participants experienced effects that persisted for months, the FDA declined to approve the therapy in August 2024, citing methodological concerns and requesting another Phase 3 trial. Lykos has not publicly outlined plans for that requested study.
Documented risks and safety considerations
Psychedelic-assisted treatments carry several known risks. During administration, patients can experience acute anxiety, panic, or confusion, and some individuals report short-term worsening of mood or distress after sessions. Longer-term negative effects have been estimated to occur in roughly 10% to 15% of treated patients.
There is a particular risk that psychosis or manic episodes could develop, especially in people with bipolar disorder, schizophrenia, or a strong family history of those illnesses. Physical adverse effects associated with specific compounds include nausea and headache with psilocybin, potentially fatal cardiac arrhythmias with ibogaine, and transient increases in blood pressure, heart rate and body temperature with MDMA. These risks are amplified when the drugs are used outside regulated clinical environments.
Implications for health care and markets
The executive order's push to accelerate regulatory reviews and expand research funding could alter the development timelines for multiple psychedelic candidates already in late-stage trials. Sectors likely to be affected include pharmaceutical development, mental health services, and clinics offering psychedelic-assisted psychotherapy. Investors and health systems will be watching regulator responses and subsequent clinical trial outcomes closely, given both potential therapeutic benefits and significant safety considerations.