COMPASS Pathways IPO: Part 2

Skin in the Game

"Your assumptions are your windows on the world. Scrub them off every once in a while, or the light won't come in."

— Isaac Asimov


Yesterday I heard novelist and Daoist monk Yun Rou (Arthur Rosenfeld) depict the Star Wars Saga as a parable of the conflict, not between good and evil, but between Confucianists and Daoists.

It piqued my interest because many who have been closely watching this transition period of the psychedelic renaissance often plot events and actors against the Star Wars narrative with the commercial entrants occupying the role of the Empire and the non-profit and 'underground' communities as the Rebels.

Again, the Star Wars narrative is usually depicted as good vs. evil, and thus the implication is applied to the various actors we have in the psychedelic space. However, I think this alternative depiction of the conflict between Confucian values and Daoist values is more accurate and useful for fruitful discussion in this domain we all care so deeply about.

Here's the pertinent segment:

“I think Daoism is much better represented by Star Wars… if listeners know the Star Wars universe and they understand the world that George Lucas put together, he based that world on the historical interaction between Confucianists and the Daoists in Chinese history… The Empire with all of its rules and regulations represented the Confucianists, that is structure, hierarchy, rules, technology, living in very prescribed social context. And The Rebels, in the forest with the Ewoks, with their robes and lightsabers, these were the Daoists. This nature worship, this individuality, simplicity, sense of community, organically in all senses of that word, absent the regimented hierarchies of Confucianism/The Empire is the easiest way for American people to connect with what Daoism is.”

I heard this while reading and reflecting on the details of COMPASS's recent IPO filing and thinking about all of the implications, tradeoffs, and open questions we have. This framing felt useful since most of the commentary I see pits this as a battle between good and evil, which feels absent of nuance and complexity.

Instead, it is more useful to understand the corporate entrants as valuing structure, rules, technology, hierarchy, established processes, protective caution, top-down implementation, and the non-profit/underground valuing a bottom-up, nature-based, organic, simple, and communal framework. Rather than choosing sides, it is more useful, though more challenging, to try to understand how and where to apply these values and how the tradeoffs between them can be maximally beneficial.

Those asserting the corporate entrants as the evil overlords attempting to horde and block psilocybin, LSD, etc. do not seem to appreciate the challenge that the war on drugs, rigors of FDA approval, fee-for-service healthcare system present, and the potential unintended consequences of state and local policy initiatives.

Those touting pharmaceutical psychedelics as a paradigm shift for mental health conditions but fail to acknowledge the delivery challenges, including costs, reimbursement, siloing of care, the multitude of influences, and the social and economic barriers to healthcare are willfully blind and choosing not to engage with the most challenging (and interesting!) aspects that this paradigm shift presents.

The Lay of The Land

Let's point out (some of) the unique qualities and constraints that make psychedelics such a fascinating and rich topic.

  • Psilocybin is a Schedule I drug. Consumption and sale are illegal, and these restrictions extend to scientific research making it slow, costly, and mired in stigma.

  • Drug Scheduling and current policy are anti-science. A product of the Controlled Substances Act, a politically motivated response to notable cultural use and promotion of drug use/cognitive liberty, principally psychedelics, in the 1960s and 70s.

  • The federally sanctioned drug approval process (FDA/EMA/Health Canada, etc.) is a public-private partnership in which government agency sets the standards of safety and efficacy and private companies take on the risk and hope their drug candidates can overcome the hurdles that society demands. This is an expensive process, and those who successfully navigate this course and deliver solutions for suffering patients should be able to recoup their investment and earn a profit. However, at least in America, drug pricing is some combination of epidemiological and actuarial alchemy and back-scratching with payers and the (many) other involved parties.

  • The unique features of the psychedelic experience can be conceptualized in many (infinite) ways. What scientists are calling 'mitigation of the severity and impact of Treatment-Resistant Depression' is to another to 'witness the ineffable interconnectedness and divine nature of all things.' This has its challenges, especially since a familiar feeling is a discomfort of the intermingling of a profit motive intensive sector (biopharma) with a heightened commitment to end the suffering of others that psychedelics often catalyze.

  • COMPASS' progress comes at a time when there are at least a handful of measures in federal, state, and local levels seeking to reclassify psychedelics and, as in the case of Oregon, implement a system of psilocybin based clinics which would operate state-sanctioned yet federally illegal.

  • The shamanic, ceremonial, religious, and therapeutic use of psychedelic plant medicine has a long history of human use. This is useful in that it shows the relative safety of these substances and some framing of the set and setting— the rituals, traditions, methods, and strategies have been honed over generations (not unlike other practices such as cooking, farming, and spiritual and self-cultivation practices).

In short: unique mechanism of action, millennia of human use, federally illegal (for dubious reasons), the capacity to address very challenging conditions, the unique quality of potentiating a paradigm shift in psychiatry/mental health, a diverse, energetic, and opinionated series of psychedelic subcultures, among others.

All of these features, and more, make this 'renaissance' to my mind, the most fascinating, intellectually rich, and practically challenging area I can imagine. (Hence this newsletter)

What we talk about when we talk about "getting this right."

There are two ways that people in the psychedelic space talk about getting this right.

  • On the one hand, a cultural and political backlash of the kind we saw in response to the counterculture of the 1960s must be avoided at all costs.

  • On the other hand, we have a concern for making psychedelic-assisted therapies affordable and accessible.

These loosely map onto the Confucian/Daoist paradigm, respectively.

Mitigating a cultural/political backlash and harm reduction is the rationale for the healthcare-first, psychedelics-as-medicines approach advocated for by drug developers.

Even though psychedelics have been a longstanding tradition in human cultures, our society demands oversight of our healthcare system, and the drugs that physicians prescribe are required to be scrutinized for safety and effectiveness, even with such a long history of human use.

Enabling affordable and accessible psychedelic-assisted therapies in religious and/or community health center models via decriminalization and legalization is another approach. The dismal state of health insurance coverage, reimbursement, and high costs leads many to think that access will be more restrictive under a pharma/healthcare/insurance approach and thus should be freed from these constraints.

Lack of oversight and absence of conventional medical settings lead proponents of the pharma approach to assume that policy measures such as Oregon's Psilocybin Services initiative, which would create a state-sanctioned system of delivery, would be dangerous to patients and an existential risk to the movement.

Both the top-down, structured, hierarchical, technological, 'Confucian' approach of legal psychedelic medicine and the bottom-up, organic, emergent, communal, 'Daoist' approach can be mutually beneficial, and each requires adherents/proponents/operators to have some skin in the game.

Skin in The Game

If operators of commercial drug development companies in the psychedelic arena are working in the name of patient benefit, then they ought to have some financial skin in the game since there are many opportunities for a payout before patients can access care. This could be accomplished by forgoing or donating a liquidity event they are entitled to in an IPO until the drugs are approved.

"Payout before patient benefit" that early shareholders of COMPASS and MindMed enjoy is an incentive problem. It sets a precedent for the slew of fast-follower 'promoters' we see quickly raise money and launch companies with no direction, potentially leading to reputational harm and existential risk to the movement.

On the other hand, how can organizers and activists have some skin in the game if, in response to public decriminalization and legalization efforts (ie, Washington DC and Oregon), the DEA and/or FDA decides that the risk is too high and enacts some retrograde policy that sets the field back years?

Or God forbid the President targets these movements for political leverage and foments opposition by associating psychedelics and the political upheaval in Portland and Washington DC?

In other words, how do we all own the responsibility? How do we all have skin in the game?