Psychedelics Advance in Federal Arena as Trials and Policies Align

LOS ANGELES – Federal health officials under the Trump administration have begun to signal stronger backing for psychedelic therapies, setting the stage for possible FDA approvals of MDMA and psilocybin treatments within the next 18 months, according to recent conversations with regulators, lawmakers, and industry executives. This shift comes as developers ramp up lobbying efforts and states introduce dozens of reform measures, though persistent concerns over clinical trial integrity continue to test the sector’s progress.

Health and Human Services Secretary Robert F. Kennedy Jr. has taken a direct role in championing these substances, testifying before Congress in June that his department aims to enable clinical access to psychedelic options for conditions like post-traumatic stress disorder (PTSD) by mid-2026. “This line of therapeutics has tremendous advantage if given in a clinical setting, and we are working very hard to make sure that happens within 12 months,” Kennedy told the House Energy and Commerce Committee. His comments, echoed by FDA Commissioner Marty Makary, who described psychedelics evaluation as a “top priority,” mark a departure from prior regulatory caution.

Makary’s agency has moved to expedite reviews for therapies addressing public health needs, potentially cutting timelines from months to as little as 30 days for qualifying candidates. This includes support for veteran-focused applications, with the Department of Veterans Affairs and Defense Department already funding studies on MDMA and psilocybin for PTSD. Early results from these government-backed trials have shown “very encouraging” outcomes, Kennedy noted, fueling optimism among stakeholders who met with Psychedelic Alpha in late November.

At the heart of this activity sits Lykos Therapeutics, whose MDMA-assisted therapy for PTSD faced rejection over questions about data reliability and placebo controls. The FDA’s public release of its complete response letter in September provided rare transparency, praised by founder Rick Doblin as a step forward under the new leadership. Lykos now plans a resubmission, bolstered by administration allies who view the prior denial as overly conservative. Meanwhile, Compass Pathways advances its synthetic psilocybin candidate, COMP360, through Phase III trials for treatment-resistant depression, with topline data due in the second quarter of 2026 and a new drug application targeted for late that year. CEO Kabir Nath highlighted the therapy’s potential to capture a slice of the $7 billion psychedelic market projected by 2032, as investor confidence rebounds on stronger trial designs.

Other contenders include Usona Institute’s psilocybin for major depressive disorder and MindMed’s LSD for generalized anxiety, both in late-stage testing. Developers are also exploring non-hallucinogenic variants to sidestep some regulatory hurdles, as seen in Delix Therapeutics’ work on neuroplastogens that mimic psychedelic benefits without the full subjective experience.

Yet challenges remain embedded in the federal framework. Psychedelics’ Schedule I classification under the Controlled Substances Act imposes strict barriers to research and distribution, even as breakthrough therapy designations accelerate FDA reviews. The MDMA setback underscored vulnerabilities in trial methodology – issues like therapist bias and blinding difficulties that experts say demand refined protocols for future submissions. Federal lobbying by drug companies hit a quarterly record of totals in the third quarter, reflecting a strategic push to influence rescheduling debates, though nonprofits like the Multidisciplinary Association for Psychedelic Studies have scaled back amid refocused efforts.

On the state front, 2025 has seen an unprecedented wave of legislation, with over 35 bills introduced across more than a dozen jurisdictions by January alone. Massachusetts and Washington lead with proposals for regulated psilocybin programs modeled on Oregon’s framework, while Texas allocated $50 million for ibogaine trials targeting opioid use disorder. These moves serve as a buffer against federal delays, analysts note, particularly as Democratic-leaning states drive the bulk of activity despite bipartisan pockets in places like Missouri.

From a business perspective, these developments point to a maturing sector capable of leveraging political tailwinds. Increased capital inflows signal that investors see viable paths to commercialization, provided companies address evidentiary gaps head-on. The administration’s emphasis on veteran care could unlock dedicated reimbursement streams through the VA, a market segment worth billions in mental health spending.

Still, success will turn on execution: unified advocacy to clarify policy asks and data packages that withstand scrutiny. Without those, even supportive rhetoric risks stalling at the gate.

For Highly Capitalized Network-HCN, tracking psychedelics alongside Cannabis reveals parallel trajectories – federal openness tempered by practical bottlenecks. As 2026 approaches, the ultimate challenge lies in whether this federal thaw will translate into deployable therapies, offering relief to patients and returns to backers in equal measure. Be sure to monitor the Phase III readouts, as they hold the key to unlocking the next chapter.