In the last half-decade, the perception of psychedelics has radically shifted in both the public eye and medicine. Once viewed as illicit, many doctors, patients, and state and local governments are reframing the Schedule I substances as a potential source of relief.

As many as 50% of generalized anxiety cases and 30% of depression cases don’t respond to first-line treatments. Emerging evidence suggests psychedelics could be an antidote for these patients. Combined with psychotherapy, psilocybin and ketamine have shown some success against treatment-resistant depression. Midomafetamine (MDMA)-assisted therapy has shown some success in treating posttraumatic stress disorder (PTSD).

Neither psilocybin nor MDMA-assisted therapy is FDA-approved, but both are being reviewed in clinical trials overseen by the FDA. Facilities that dispense psilocybin treatments — the hallucinogen found in magic mushrooms — exist in Oregon and Colorado thanks to state laws that legalize state-licensed access programs. All across the country, experts say patients are already self-medicating due to an unregulated online market.

Doctors, too, are looking for ways to get involved and offer patients access to the therapy. But even with the shifting public perception, the legal and regulatory frameworks for psychedelics in healthcare are extremely complex. Physicians must weigh significant risks as they consider what part to play.

Lisa Gora, a shareholder and healthcare attorney at Baker Donelson, specializes in healthcare mergers and acquisitions, and serves on the psychedelic committee of the New Jersey State Bar Association. She spoke to Medscape Medical News about the rapidly evolving landscape, the risks physicians face, and the safest way to get involved.

What’s the single biggest legal risk for physicians if they engage with psychedelic therapy today?

So, the number one risk that I educate my clients about is that they understand the dichotomy between federal law and state law. Under federal law, no physician can prescribe a psychedelic drug unless they’re doing it subject to a federally approved clinical research trial. That’s because the use, manufacturing, dispensing, and prescribing of a Schedule I drug, which includes psilocybin, MDMA, and cannabis, violate the Controlled Substances Act and are illegal under federal law.

As for state law, two US states, Oregon and Colorado, have legalized psilocybin manufacturing, cultivation, dispensing, sale, and purchase of psilocybin through licensed facilities at the state level. Others, like New Jersey, have introduced similar bills, but none have been passed into law. So that’s where a lot of people get confused because they read articles and think psilocybin is legalized everywhere — but it’s only in two states. And even then, the state laws don’t override federal law — providers may be subject to some type of liability.

Now, I haven’t seen any doctors who have had criminal action taken against them by the federal government when engaging in activities under the state-legalized access programs. But physicians should be cautious. At least right now, the federal government has said that it is very unlikely to take enforcement actions against someone who is acting within the strict compliance of the state’s legalized framework.

But the political landscape can totally shift. The Drug Enforcement Administration (DEA) can decide at any point to go after people who are engaging in these state-legalized frameworks because maybe they’ve seen too much harm.

What’s your top piece of advice for physicians who want to explore this space without jeopardizing their license or practice?

In the case of an MD, there can be a lot at risk: the state license to practice medicine, the federal license from the DEA to dispense other controlled substances, and some own their own practice. Just by virtue of engaging with a psilocybin facility — even though a state-licensed, legalized facility — the physician is engaging in an activity that is, under federal law, illegal, which can and may put their ability to practice medicine in jeopardy.

What I tell my MD clients who are interested in getting involved in state-licensed psilocybin facilities — in states that have legal access programs — is that it’s very important for them to use disclaimers. In their written materials or when they speak to individual patients, there should be disclaimers to say that they’re not acting or providing advice within the scope of their medical license.

Make sure that anyone you see understands you’re not acting as a doctor but within the scope of a psilocybin license and training required by state law. That’s one of many steps that can be used as a defense mechanism in the event that a patient is harmed by virtue of their experience at the psilocybin service center.

Also, each provider should speak with their malpractice carrier to see if coverage for their services at a psilocybin service center is covered under their existing policy or whether a separate malpractice policy should be obtained.

How should a doctor respond when a patient discloses they’re already using psychedelics on their own?

The doctor shouldn’t dismiss the patient or actively recommend that the patient continue using the psychedelic substance. They should educate them, to the extent that they can, on side effects or interactions with other medications.

Doctors could say something like, “I’m not endorsing the illegal use of this psychedelic substance, but I understand you’ve taken it, and I’m happy to educate you on whatever information I have on the benefits or negatives of using it.”

What do you expect health insurers to do once FDA approval for psychedelic-assisted therapy arrives?

Once the FDA approves a psychedelic-based therapy, which again hasn’t happened, insurers will then cautiously begin covering it, but under super tight restrictions, limited populations, and with heavy utilization oversight.

In the summer of 2024, we were so close to that type of outcome where the FDA was reviewing the use and development of MDMA, which is a Schedule I drug, to be approved to be used as a treatment for PTSD. I think that would have opened up the doors for other psychedelic drugs to then quickly come to market. But in August of last year, the FDA declined to approve the use of MDMA as a treatment for PTSD, which was a major setback for the federally approved psychedelic drug movement and rattled many advocates. But, in my mind, it’s not the end of psychedelics integration in our healthcare delivery system.

From a business standpoint, will psychedelics be a niche service or a mainstream part of mental health care in the next 5 years?

No, I think that in the next 5 years, psychedelics will continue to be a niche service that patients seek out when they have not found relief with traditional medicines. Those patients will continue to turn to the unregulated market and/or states that legalize and implement state access program like Oregon and Colorado.

Is there a type of provider you would recommend not get involved with psilocybin?

I’ve never advised someone to not get involved. I advise people, based on their interests, on how they can get involved and how to do it cautiously, correctly, and legitimately.

Donavyn Coffey is a Kentucky-based journalist reporting on healthcare, the environment, and anything that affects the way we eat. She has a master’s degree from New York University’s Arthur L. Carter Journalism Institute in New York City and a master’s in molecular nutrition from Aarhus University in Aarhus, Denmark.