Some Thoughts on For-Profit Psychedelic Startups and Companies

Credit: Lewis Minor

This week has been a fascinating firestorm for me. 

Part of the excitement came after a series of tweets I published about some of the concerns I have as psychedelic medicine makes the leap from research to for-profit startups and companies. Here is what I wrote:

“I am very concerned by the patent land grab warming up in the for-profit psychedelic world. Is anyone working on an IP Defense Fund—or coalition of pro-bono lawyers—of some type to file USPTO objections/comments, etc. when companies attempt to secure broad patents that could hinder scientific research, reasonable competition (i.e., for “scale” and wide accessibility, we need competition to help drive costs down), and so on? Who are the smartest people thinking about this?
cc @michaelpollan, @Drug_Researcher, @RickDoblin, @RCarhartHarris

[If helpful, here is the link to the actual thread on Twitter.]

In this post, I’ll describe a few noteworthy tweets, then I’ll focus on one particular response I received, as it helps us unpack a lot.

First, Rick Doblin of The Multidisciplinary Association for Psychedelic Studies (MAPS) replied with the below, which offers great food for thought. It demonstrates how non-profits and drug development can coexist with innovative business models. It also demonstrates how a profit-first model is NOT always necessary for attracting excellent talent to work on tough problems:

Several responses endorsed the Usona Institute — a 501(c)(3) non-profit dedicated to both research and production of psilocybin, 5-MeO-DMT, and other psychedelic medicines — which has made commitments to Open Science. I have many friends who have supported Usona after due diligence.

And now to the tweet that will be our jumping-off point for many topics…

One response that got quite a bit of attention was from Christian Angermeyer, who has co-funded and co-founded two notable for-profit companies in the space, Compass Pathways and ATAI Life Sciences, respectively.

Before we go further, I want to note that I like Christian and have also moderated panels involving him (e.g., the psychedelic science panel at Milken Institute Global Conference 2019, which I think is the best 101 overview I’ve ever been a part of), where I’ve always found his perspectives valuable. 

He is sincere in his goal to help millions with access to psychedelics, and here is his response to my thread (in case easier, screenshot is here):

I planned on responding on Twitter, but it got long and Twitter wouldn’t let me. I also realized that the points, problems, and questions are relevant to nearly anyone starting or working for a for-profit company in the psychedelic space.

For those reasons and more, I decided to turn my response into a blog post.

Here it is…

###

Thank you for the response, Christian. I agree with nearly everything in your response and appreciate the dialogue.

That said, I don’t think it directly addresses my concerns. To further the conversation, please allow me to highlight and clarify a few things:

1. I’m not anti-profit. I’m an early investor or advisor in 50+ companies that have created hundreds of billions of dollars of market cap (e.g., Shopify, Uber, Facebook, Twitter, Alibaba) and raised tens of billions of dollars in funding. I understand how important intellectual property (IP) can be and how critical it is to have financially sustainable models for scaling. 100% agreed there. For-profit structures, and markets in general, are excellent mechanisms for innovation and solving challenging problems.

2. Regarding my donations of “a few million dollars,” which seemed to be considered trivial—I think it’s worth noting that I began funding studies in psychedelic science circa late 2015, and I was a founding funder of the first dedicated research center in the world (Imperial College) and the first in the US (Johns Hopkins). I believe these and other “seed investments” have had large compounding effects, including cultural and institutional domino effects on an international scale. I judge my investments and philanthropy based on outcomes, not the size of my inputs. Little amounts can do a lot when put in early. Of course, I completely agree that large amounts of capital are helpful for scaling access.

Related to science — would you be willing to allow scientists who have signed deals with Compass or ATAI to share their agreements publicly (i.e., waive confidentiality clauses)? I believe that would quell some of the concerns among psychedelic advocates. If not, why not?

Of course, I realize that this would be unusual and not without challenges, but it might be a creative example of how companies can reassure the public that they are, net-net, contributing to, and not detracting from or disabling, the ecosystem. 

 3. You wrote that I’m “wrong” and “incredibly misguided” on the topic of IP. Can you please help me understand how I’m wrong and misguided? I’m always game to learn, but I could use more specifics.

As I stated in my initial tweet thread, I think it’s worth examining—and possibly pushing back on—“broad patents that could hinder scientific research, reasonable competition (i.e., for ‘scale’ and wide accessibility, we need competition to help drive costs down), and so on.” This also applies to anything in the public domain that should remain in the public domain. Please note that I didn’t mention specific companies, but since you engaged…

Do you disagree? Do you think a monopoly/duopoly of any type (Compass or ATAI or otherwise), patents on basic elements of the psychedelic experience, or patents covering dozens of possible conditions that might be treatable (some of which are being treated/researched at universities) would be good for the ecosystem, for innovation, or for ensuring affordable pricing?

I ask these things AS A CHEERLEADER. I WANT Compass and ATAI to succeed in helping many millions of people! I’ve met you, as well as the founders of Compass, and I believe you all to be good people. I really mean it. I believe that you all want to change the world for the better, and this field needs well-capitalized teams who can execute.

Compass and other for-profit companies have the potential to do a ton of good in the world. I also think that the nature and incentives of capitalism can breed strategies that are very bad for innovation, and we need individuals, groups, and third-party organizations to watch for them and mitigate them. Even the best of intentions can warp when they collide with the harsh realities of business.

None of this is Compass- or ATAI-specific. It applies to every startup and company in the space. 

For-profit ventures have a critical role to play in the expansion of psychedelic medicine, but for-profit ventures don’t get a free pass. They can also cause harm, and they often do. There will be compelling temptations to make unethical decisions, pursue unfair anti-competitive practices (e.g., patenting “inventions” that aren’t inventions), generate revenue without adding value (e.g., IP trolling), charge as much as possible (e.g., NYT – “Drug Goes From $13.50 a Tablet to $750, Overnight“), and treat the psychedelic landscape as a winner-take-all or zero-sum game. “Disruption” can be white hat or black hat; “scaling” can be done with net-gain or net-loss to an ecosystem.

There are bad actors and mercenaries in every industry. But here’s the part that people forget: even if the founders of a company rival Mother Theresa in their moral character and strength, that isn’t enough. Leadership changes, incentives change, power dynamics change, and all situations change (Suggested reading: We Will Call It Pala). That’s why both internal guardrails and external watchdogs are important. Once again, even the purest of intentions can warp when they collide with the harsh realities of business. I’ve seen it.

In the end, the people who would most suffer as a result of the possible problems I’ve outlined are the millions of people who most need psychedelic medicine. That is why I’m taking the time to write and publish my concerns.

Once again, thank you for the dialogue, Christian. I greatly appreciate it, and I greatly appreciate your mission to help as many people as possible. I look forward to your thoughts.

Most sincerely,

Tim

[UPDATE: Christian posted his response here on LinkedIn, and VICE published a follow-up article discussing their evaluation of the exchange.]

The Tim Ferriss Show is one of the most popular podcasts in the world with more than 700 million downloads. It has been selected for "Best of Apple Podcasts" three times, it is often the #1 interview podcast across all of Apple Podcasts, and it's been ranked #1 out of 400,000+ podcasts on many occasions. To listen to any of the past episodes for free, check out this page.

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46 Replies to “Some Thoughts on For-Profit Psychedelic Startups and Companies”

  1. A friend of mine shared with me a podcast episode about this very subject. While listening, I appreciated the sentiment of protecting the psychedelic space from corporate dominance, but I had to stop listening halfway through. It was incredibly whiny, uber-“woke”, anti-capitalist, and overall ego-stroking drivel that provided no beginning for open discussion to seek realistic solutions to the problem. Your post is much more effective and proactive. Thank you.

  2. “I also think that the nature and incentives of capitalism can breed strategies that are very bad for innovation, and we need individuals, groups, and third-party organizations to watch for them and mitigate them. Even the best of intentions can warp when they collide with the harsh realities of business.” Thank you so much for saying this……I feel it is such an under represented perspective.

  3. Based on another podcast of yours where you taught us all about NFTs I think I would Mint [ NFT ]ANY ideas that i have on formulations – so there is proof that you were already owned / created & MINTED that concept / trademark/ brand/ item. website/ webaddress / the biggest artist in the world can lock real world masterpieces in the purchase of silly little NFT’s – cheapest protection/mastermind tool in the world – and they cant stop it and they cant argue against its validity in court.

    Brilliant

    1. If you wanted to and that patent was awarded per say and they had a big interest in retaining the entire patent rights – I bet -you could sell your NFT to them for a very high price

    2. Elizabeth this is an amazing use of NFTs. I am going to use this to plant a flag in many ideas I would patent but don’t want to spend the money to prosecute on. If I NFT the idea I will at least have freedom to operate from other future patents. Love to connect if you want. My email is on my website [Moderator: link removed.]

  4. Hi Tim, you have a heart of gold. After being inspired by your podcast with Michael Pollan and Rick Doblin, I recently interviewed Rebecca Matthews, MAPS clinical trial/ research leader on my podcast (Clinical Trial Podcast). And thank you for donating and encouraging others to donate to Amazon Conservation Team to save animals, specifically frogs. I am humbled by everything you do to make this world a better place. Much love!

  5. Sorry pal, not how the soulless “free market” operates, I think you know, iI heard you’re rich. I’m really tired of the white men who come up with reasons why it’s not ok to make money off something when you already got yours a million x’s over. My first mushroom experience was in a cow field,,and so it remains,,Do we need more Ferris’s and Pollans (white saviors) to support corporate research? I thought you were a cheerleader of provisional patents

  6. I know Tim doesn’t do start-ups, advising or coaching anymore but I have a great idea for something but i first need a prototype to then get a patent and I’m not sure on who to ask an what to do. Does anyone have any guidance who reads his blogs?

  7. I feel like Chris did not really adress any of your concerns, he just basically said that the company needs to be profitable and in order to do so they may need to use tactics that you are concerned about (not sure if that is what he meant but that is what I read between the lines)
    While him adressing psychedelics being medical drugs and being covered by insurance. I think we all seen documentaries when they show that drugs can be cheaper without co-pay and you mentioning how an article where a drugs price increased over night 60 times.
    It is incredibly concerning how the system is set for only profit and not to actually help people and I think thats is the reason that people are worries and scarred of a new medicine going into that “broken” system.
    Insulin was first used 100 years ago, its widely needed and the cost is so high that you would think that you are getting a custom made insulin just for you.

    1. I think your comments bring up the deeper principles of the validity of patents at all:
      https://mises.org/library/fight-against-intellectual-property

      Tim, I understand that you have been a willing and enthusiastic recipient of the financial benefits that such laws provide to specific groups (“I understand how important intellectual property (IP) can be and how critical it is to have financially sustainable models for scaling.”)

      And now you are actively working on another side as someone with wider community interests.

      The arguments for patents and other IP laws are not as self-evident as they can first appear, and this realization may open up answers that can not be found without questioning the underlying assumptions.

      Would this be something to add to your legacy? Or are mere ‘millions’ not enough for this task?

  8. I’m not sure how it rubbed anyone else, but when I read Christian’s words that you were “wrong” and “incredibly misguided”, it only added to the validity of your concerns. This language seems to indicate a blind spot (which we are all personally victim of within ourselves from time to time) and is revelatory of the needed guardrails and watchdog scenario you are pleading for. Great advocacy work and conversation, Tim.

  9. From 2018-2020, my partner and I volunteered with a non-profit for psychedelic education, which has since be converted to a for-profit organization. Everyone we worked will was truly passionate about making a difference in the world and helping people, but the tone shifted when the opportunity for profits arose. I still believe they have a vision, but I worry to money has (or surely will) distort that vision. Needless to say, we have since redirected our energy and resources, but I share the concerns around the for-profit sector of psychedelics. It’s a delicate and arguably sacred area that really should be treated as such, and I worry the the “quick fix” solutions are going to outpace regulations.

  10. Dear Tim,

    I have been a huge fan of all of your content for many years, so I mean no disrespect when I say that these sacraments don’t belong to academia, medicine or corporations. They do not belong to any of the World’s institutions. They belong to Life. They are here to help us come back to Life and come together in Love. They belong in the hands of the ones who need them, delivered by the ones who have been called. Some of those people are one in the same. And some of those people ARE in academia, medicine, corporations. That is ok. If you think of a person coming to Life, it is much like giving birth. Some mothers feel more comfortable in a hospital (academia/medicine). Some feel more comfortable with a midwife (the medicine women and men). And some prefer unassisted childbirth (the solo psychonauts). Some of this may seem dangerous, but we have been engaging with the Mysteries for a very long time. Just like women have been giving birth for a very long time.

    To think that anyone should have control over these sacraments… This is not in the realm of Life, but the World. Our constructed World that is a breeding ground for the trauma that causes the competition, the fighting. Who gives the money, who gets the money… Only in the World can people take power and control in this way. If we want to come to Life, we must become more like children. Humble and surrendered before the Mystery that these sacraments reveal to us. Connected more by how little we know than how much we know. I hope that someday our wisdom, the Life inside of us, the mysterious current that moves all of us – the philanthropist, the researcher, the entrepreneur, the psychologist, the medicine woman… I hope that someday it moves all of us closer together.

  11. Thank you for speaking up. As an avid listener and fan I always appreciate your honesty and integrity. I ask here what about the folks that have been talking to plants and healing their brothers and sisters for eons? The capitalist paradigm has always been to the detriment of our indigenous teachers. How can we honor and support where it all started?

  12. This debate is not new, and applies more broadly to any field of innovation. Without companies, innovations do not get into the hands of consumers. The most successful companies become quasi-monopolies, attract ire, are brought down by regulators and competitors, and the cycle repeats itself.

  13. I see the problem with Christian’s approach is that he believes “to finally change things” we need a “viable business model” with psychs “approved as medical drugs” and “insurance” coverage for it. Ugh…really? Why? Because this model has worked so well for…who? Businesses and the licensed professionals who operate within this model – not necessarily the clients. And what happens to the indigenous wisdom garnered from thousands of years of experience by the shaman who has the plant speak to him and from that, he sings back the icaros? Who has a patent on “Medicine”?

  14. Hi Tim – you might be interested in our short film ‘The Rise of Psychedelic Capitalism’ which features key players in psychedelic medicine discussing this topic: [Moderator: YouTube link removed.]

  15. tl;dr: [Moderator: slur removed.], Christian.

    Christian is basically saying he tricked some rich investors into investing on a large-scale so therefore he should profit on a large scale. He makes no mention of the fact that his work is literally based on the work of thousands and thousands of “alternative” doctors and healers and he has no plan to compensate them. The opposite — he will most likely sue them for continuing to do the activities that have led to him even being able to pursue a patent.

    This reeks of Johnson & Johnson’s BS with ketamine/esketamine. All they did was mirror the molecule and put it in a nasal spray which is actually less effective than IV ketamine while way more expensive yet suddenly insurance agencies will cover it. Big pharma wins. Patients lose. And the doctors and healers that figured out how to administer ketamine for depression, PTSD, etc. lose too.

    Let’s fix the root issues. Insurance companies and the FDA need to recognize proven “alternative” treatments (which is ironic since most depression medication barely works and that seems to be no issue for them) but also pharmacies need to know what they’re getting and that it’s safe, accurately dosed, etc.

  16. Hi Tim,
    I’m the CEO of a startup which plans to move to the psychedelic space and I agree with you. These substances are not to be patented and are for EVERYONE! Not just the rich who can afford them.
    K

  17. Most of the other commenters have covered my sentiments already, more thoughtfully and succinctly than I could have done. I’ll just say thanks for this thoughtful and uber-reasonable response; I would be interested in reading Christian’s response to this post if it is half as thoughtful and reasonable.

  18. I work for a psychedelic-assisted psychotherapy technology start-up and this is really relevant to the work we are doing now. An interesting debate and there’s a lot of land-grabbing with patents in this industry for sure – although a lot of patents are filed and then publicised to gain attention in the public markets (e.g. to attract retail investors) without ever really expecting a successful outcome (note the public only has sight of patents that are at least 18 months old). The other side to some patents is obviously more obstructive in nature, and that’s definitely where the moral controversy lies and where push-back is needed. I know that the vast majority in the industry agree that the more accessible and scalable these treatment protocols are for the patients & PTSD/Depression sufferers who need it the better, so this is a really worthwhile conversation to be having.

  19. Thanks for sharing this dialogue. In my view, Christian Angermayer’s statement that $1 billion of financial capital is necessary to “change things” is the one that seems misguided. Such an amount might be necessary to bring to market new psychiatric drugs representing (at best) incremental improvements over prior generations. Big pharma must spend enormous sums on marketing these drugs, because providers’ relationship to the drugs (and to the pharma corps) is primarily transactional.

    But this approach is unnecessary in the case of psychedelics, whose essence is to create connection. As the use of psychedelics becomes more widespread, it will give rise to a denser network of social ties among those who interact with them. The social capital created by this bottom-up process will be more valuable for promoting adoption (and true change) than the traditional top-down, dollar-driven, big pharma approach. A significant amount of financial capital is still necessary to move through the regulatory approval process, but there are at last two real-world cases (MAPS & Usona) to suggest that the requisite funding can be raised from philanthropic sources.

  20. I have appreciated your commentary and involvement in the psychedelic space and am interested to see where the industry can go and the impact on lives it can have. The ability for these new approaches to change lives and unchartered territories leaves hope that some of our most vulnerable and effected in society will not be left behind. For many people the choice of try something or do nothing is very limiting. The option for us to try new approaches and change lives shouldn’t be limited by companies but encouraged for collaboration and working together in our shared human experience.

  21. Great work Tim,

    Many who know the spiritual aspects of this work know that consciousness itself can be calibrated, building upon the work of Dr. David Hawkins. You can read a summary here: [Moderator: link removed.]

    For Mr. Angermeyer, he is around 120 / 125, operating at the emotional level of “Desire”.

    Of course, his desire is clearly to own that which cannot be owned. The path to our own Divinity.

    Keep up your amazing contributions Tim. Aloha,

    Jonathan

  22. This post is replete with the typical doses of misinformation found in anti-patent echochambers. Simply put, patents drive innovation. They do so by providing a limited monopoly to encourage investment by offering investors the opportunity to recoup their investment, and yes, make a profit. The author here tries to counter this reality by pointing out that he is one of those investors. But as Christian points out, the couple million he invested will alone do nothing to reach the $1B required to bring a drug to market.

    Yes, new innovations are expensive. But remember, aspirin was once a patented medicine enjoyed only by the wealthy. It’s now pennies per pill. And we must remember that bringing psilocybin therapy to market will take much more than growing some shrooms in the woodpile behind your house. Take a look at how much clinical trials themselves cost even after a drug compound has been created.

    Moreover, it’s important to remember that patents further innovation also by requiring disclosure of the invention. The tradeoff the public gets from the government granting a limited monopoly to a patentee is publication of the innovation. The consequence of limiting patents would be a shift towards trade secrets, and doing so inhibits the public’s ability to take the invention and further improve it.

    I don’t question that the author has the correct intentions. But unfortunately, the misguided comments made in this post, if followed, will more likely than not have the opposite effect by hindering, not promoting, the realization of psychedelic therapy and recreational products.

    1. “…patents drive innovation.” – evidence please Cameron. (I’ve already referenced a refutation of this above.)

      The parallel issue is that the huge cost of medicines is bound up in the hurdles of the health / government systems that mean that anything that makes health claims is in a different category than every other chemical.

      So to be clear, I’m not asking for evidence that patents create sufficient profits to allow drugs to make it through to become a legally available medication. That monopoly-to-profit spiral is probably clear enough.

      I’m asking the trickier question which is what is your evidence that patents increase or cause “innovation”.

  23. Thank you Tim for taking the time to address these important issues. I do not know nearly enough to criticize or praise one side or the other, I’ll only say that transparency is important to keep things healthy, and most of all achieve what theses substances are meant to do, which is to help and heal…

    My father fought for many years as president of the main doctor’s association in Switzerland to push insurance companies to be more transparent and let the people know what they’re doing with the money, and yet they still are very opaque to this day. He used to say that what is important when it comes to health is not money (although I agree being profitable isn’t a dirty word), but the greater good, we don’t play with public health, full stop…

    Anyway, I am with you on this, great powers bring great responsibilities, and the only way to keep companies accountable is by having them be transparent and open to discussion with the experts…

    Thank you for reading!

  24. Tim, our psychedelic medicine venture fund is trying to navigate this high wire between ethics and profits. In conversations with philanthropists, the UN and institutions seeking sustainable models for ethical psychedelics, we have realised that the debate must produce workable tips, steps and guidelines which can allow founders and investors to find their balance. We created The Ten Psychedelic Commandments to put together of the 10 areas we feel must be addressed, including IP. Given the now raging debate you kindled, could we send you a copy to get your thoughts?

  25. If the non-drug using civilians start using psychedelics like they jumped into the legal pot bandwagon, there will be absolute carnage. Remember all of those people who went to Colorado, and did too much edibles, getting so high they ended up in the ER? With MDMA that would be plain dangerous, and a non-assisted LSD trip by someone without any framework could be devastating. I really don’t see how this is going to be able to be done safely giving access to those who would most benefit, whilst discouraging those who really would be harmed, or at least freaked out to a damaging point.

  26. Just saw your interview and it was really interesting. I have been warning about the medicalization of psychedelics for years. I am VERY aware of of thhe central myth of this evil culture is the mental illness myth (see Thomas Szasz and others), and we see the wannabe psychedelic therapists and scientists using the very same terms like ‘treatment reistant depression’ and so on. Well no, that is not gonna work. It is a trying to tame the potential of psychedelics. We have to question everything….It is not just now in the modern world psychedelics can be exploited. I have a deep interest in mythology, and found that anciently cults and mystery schools also used psychedelics but pushed dualistic ideas into the minds of the participants, example: the Orphic school which reformed the wilder Dionysian Mysteries influenced the Eleusinian Mysteries, and Plato attended them and the experience he had incited his most likely already Orphic-indoctrinated assumption that the ‘spirit’ was trapped in the body, and that the body and nature were inferior. And in me research I have found that throughout patriarchal history the continuing theme is that nature must be escaped from, and how it is fallen, and that in some future a saviour will return to ‘reset’ it to its former glory where there’ll be no death.
    When all of that myth and ‘superstition’ is supposedly dispensed with in the age of reason, science and materialism yet the same theme still remains as the dis-connection with nature. Whereas in past myths it was a trap, fallen, corrupt, NOW it was/is dead mechanical matter, and consciousness is a fluke of evolution.
    Meanwhile secret cultist society of the rich and powerful is into the Kabbalah and Luciferianism, and it now is seeking total control of humanity and nature. They view all of us as their slaves who they can treat as their poor lab animals, injecting an experimental dug into our bodies. For after all to these people we are just bio-computers they can manipulate and ‘transhumanize’. in THIS evil we are suddenly hearing that psychedelics are being ‘allowed’…? In MY experience in social media the psychedelic groups are silent about all this going on. I love and use psychedelics, why not me?? Well as said, JUSt because people may use psychedelics does not mean they cannot be exploited. I think the psychedelic movement has been infiltrated from its inception by New Age ideas. BOTH its main leaders, Leary and McKenna were both psychedelic transhumanists. So, maybe they gell with the likes of KlAus Shwab and his Great Reset. Maybe they have also fallen for the climate change alarmist nonesense. So maybe the powers that be are confident they can contain the wilder potential pf psychedelics. And what would that be?
    It is what the parasite class do NOT want. They do not want us re-connecting with nature and the biosphere.. Because they want us addicted, and connected to their technosphere.

    So MY encouragement is to take psychedelics right away from all the corp. patents. money, all the usual corruption and let it be grass roots. Not tame it but re-wild. Feel our wild connection with nature. Wildness and critical thinking.