Promise, Power, and Profit: The Economics of Ketamine Treatment

MAPS Bulletin Spring 2020: Vol. 30, No. 1

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There has been a recent explosion of interest in ketamine, a synthetic chemical with powerful antidepressant and visionary properties. Originally developed in the 1960s as short-acting surgical anesthetic, ketamine was primarily used for sedation, pain management, and as a recreational party drug. A small group of researchers and clinicians have been investigating the uses of ketamine in psychiatry and psychotherapy for two decades, but in early 2019, ketamine burst into public awareness with the FDA approval of esketamine (a filtered ketamine product). The in-fighting among different kinds of clinicians that has ensued, and the insane cost of the filtered product, which was brought to market by a pharmaceutical giant, has much to teach the psychedelics communities about the economic challenges that lie ahead on the road to legalization and commercialization.

Regular ketamine is a racemic mixture with two isomers (esketamine and arketamine). Regular ketamine is off-patent (i.e., multiple drug manufacturers are allowed to make it), it is dirt cheap, the DEA has placed it in Schedule III, it is FDA-approved for anesthesia and analgesia, and it is widely available as a medical supply. After many pharmaceutical companies failed in their attempts to develop a ketamine derivative that they could patent and profit from, Johnson & Johnson turned to a different strategy: They filtered regular ketamine to create esketamine (also known as Spravato™) and then undertook an arduous and expensive process to get FDA approval for esketamine for treatment-resistant depression.

It costs a few pennies to manufacture a dose of ketamine, and the end-cost to a provider is less than $2 per dose of ketamine. In contrast, Johnson & Johnson has set the price at $850 for a dose of esketamine. Sticker shock aside, perhaps the price is warranted because esketamine is more effective? Sadly, no. There is no clinical evidence whatsoever to date that shows that esketamine is more helpful in treating severe depression than regular ketamine. (For further commentary on this, please see “The new ketamine-based antidepressant is a rip-off” in VICE and “What is the deal with esketamine?” in Psychiatric Times). What is clear is that the FDA approval of esketamine over generic ketamine results from a system of perverse incentives. The current system encourages pharmaceutical giants to invent ways to monetize existing generic drugs by creating proprietary variants of these drugs that have no demonstrable clinical advantages.

There is also some good news for the burgeoning field of therapeutic ketamine. With the FDA approval of esketamine for refractory depression: (1) it established the efficacy of a ketamine product for a psychiatric indication, (2) it established that it is safe to use this medicine in the lower dose range in an outpatient setting, (3) it moved the administration of this medicine away from anesthesiology and under the purview of psychiatry, the right home for a mental health treatment, and (4) it signaled the importance of multi-modal treatment by stating explicitly that a ketamine product alone is insufficient for treating refractory depression.

Another interesting aspect of ketamine treatment is that there is tremendous disagreement in the field about the optimal way to provide therapeutic ketamine, and the different options come with different price tags. Dr. Bennett outlined three different approaches for ketamine treatment in a previous MAPS Bulletin article (Spring 2019). In thinking about the costs of ketamine treatment, it is important to parse out the different components of the total cost: the cost of medication, the cost of other medical supplies and equipment, the cost of the provider's time (which reflects their level of expertise and experience), compensation for the amount of legal risk, and practice overhead. It is also important to make a clear distinction between "optimal" ketamine treatment and the many sub-optimal iterations that are proliferating. These clinical considerations are outside the scope of this paper, and will be explored in another publication.

However, the fundamental problem is the same across many different approaches to ketamine treatment, namely that the experience doesn't fit neatly into a standard 50-minute clinical hour. Plain ketamine infusion (without individual attention) takes at least two hours. Ketamine-facilitated psychotherapy takes at least two hours. Ketamine in the psychedelic dose range takes at least three hours. Even low dose (sub-psychedelic) esketamine administration comes with the requirement that the provider directly supervises every patient on the premises for a minimum of two hours post-treatment. The clinician's time is a substantial cost. This obstacle to treatment will only be addressed when the cost of mental health care is fully covered by insurance or subsidized in some other systemic way.

When considering the future economics of ketamine treatment, we propose the following systemic considerations and recommendations:

  1. Educate patients. It is important for patients to have a clear understanding of the spectrum of ketamine services that are available, and what they are paying for.
  2. Find ways to reduce the cost of ketamine treatment. Here are some easy ways to bring down the cost: (a) use generic ketamine because it is cheap and effective; (b) use injectable ketamine, also known as IM ketamine, because it is precise, has high efficiency and bioavailabity, is easy to administer, is cheaper than compounded lozenges, and does not require an expensive infusion process; (c) offer ketamine groups when clinically appropriate, e.g., two trained providers can work with six patients; and (d) train more clinicians to meet the demand for services.
  3. Examine and change the FDA approval process. The current FDA approval process is so difficult and expensive that it usually only makes sense for a company or institution to go through the process if they stand to make a huge profit from a patented product (though non-profits such as MAPS and the Usona Institute are succeeding). There are typically too many obstacles and few incentives to get FDA approval for a new clinical indication using an inexpensive or generic drug such as ketamine. Instead, the current system rewards Big Pharma for making irrelevant changes that have no clinical value (e.g., a likely irrelevant filtration system for esketamine.) This results in expensive and clinically dubious variants of existing drugs, increased profits for shareholders, and increased cost of care for patients. What is still missing is FDA approval for generic ketamine for a psychiatric indication. There are currently scores of scientific papers in the peer-reviewed literature demonstrating safety and efficacy, but FDA approval for ketamine for depression is required in order for health insurance companies to cover the costs of this treatment.
  4. Reform the structural bias in business ownership laws. In many states, a person(s) with a medical degree must have the majority share in a business that offers a medical treatment, such as ketamine administration. These corporate practice of medicine (CPOM) laws were meant to protect physicians from being unduly influenced by business concerns in providing clinical care. However, these laws now serve to block psychotherapists from having an equal stake in a clinic that provides ketamine treatment, and make it impossible for therapists to be equal partners in the decision-making process or to have an equal financial stake in the success of the business.
  5. Embrace a psychedelic model that is open-source, locally owned, decentralized and guided by compassionate care. We should be wary of people who want to "invest" in the psychedelic space. We have grown weary of dinners spent listening to venture-capital backed entrepreneurs selling a vision of psychedelic centers franchised from sea to shining sea. This model concentrates profit and wealth in the hands of the few founders and shareholders. It requires complex corporate structures using management service organizations to funnel profits out of the clinical practice and into the pockets of distant owners. As with other ownership consolidation trends in health care toward conglomerates, it also systemically incentivizes hiring cheaper and less experienced clinicians, reducing the staffing ratios, and reducing time spent on preparation and integration. Instead of this wealth concentration model, we envision a new psychedelic mental health infrastructure: open-source rather than proprietary, clinician- and community-owned rather than VC-owned, decentralized rather than centralized, guided by a principle of compassionate care rather than profit maximization. This vision is consistent with the “pollinator approach” articulated by Dr. Bennet A. Zelner (see article in this volume), The Statement on Open Science and Open Praxis, and the non-profit clinic model being developed by Nautilus Sanctuary (nautilussanctuary.org) in New York City. We must embrace expanding capacity and access to psychedelic medicine in sustainable, decentralized ways so that psychedelic medicine is not just set apart, but fully integrated into our mental health infrastructure.
  6. Acknowledge and compensate our psychedelic teachers. The concept of visionary medicine is not a new phenomenon; it is deeply embedded in spiritual traditions from all over the globe that stretch back for centuries. In this country, modern psychiatry and psychotherapy owe a debt of gratitude to the people in our communities who risked their personal freedoms in order to keep this information alive over the past five decades under repressive governmental policies. One part of ketamine's heritage comes from the psychedelic underground. As sacred medicines become legalized, medicalized, mainstreamed, and professionalized, there may be a huge economic impact on some of the most senior providers as they lose their livelihoods. It is problematic that experienced ketamine guides are being pushed out of the field, and being replaced by physicians and therapists who may have no training and no personal experience in working with ketamine. Is there a way to respect and incorporate these individuals and their accumulation of knowledge into legal practices?
  7. Assess the risk of harm from unsupervised ketamine use. Some medical providers are now writing prescriptions, mostly in form of lozenges, for patients to use at home. While there is no doubt that this practice is beneficial and cost-saving for some patients, we feel that this needs to be done with much thoughtfulness and discretion. The recent rise of loose ketamine prescribing practices will surely lead to many terrible outcomes: including injury to self (e.g., falling while under the influence of ketamine); injuries to others (e.g., driving under the influence of ketamine); and death (e.g., drowning under the influence of ketamine). We need to consider the possible financial and emotional costs of using ketamine in a careless way.
  8. Address the systemic flaws in healthcare that penalize illness. It is absurd to ask ill people to pay for medical treatment, especially when they have severe, chronic, complex, or refractory conditions. These individuals are less likely to be fully employed, less likely to have private healthcare benefits, and less likely to be able to afford expensive treatments, because they are ill! It is ludicrous to produce a medication such as esketamine, restrict its availability to patients with refractory depression, and then expect those same patients to pay exorbitant costs out-of-pocket for a treatment, when by definition these patients have functional impairment. The costs of mental healthcare, and medical care in general, should be a socialized or communal cost where the cost of treatment is shared within a community of people.

The most economically efficient way to work with ketamine is to use cheap, generic, injectable ketamine as much as possible. Incorporate it into existing mental health services, rather than offering it in separate facilities. Provide group ketamine to the degree that it is clinically appropriate, and subsidize individual ketamine treatment for individuals who truly need it. Clinicians also need to work together using multi-site date collection software to apply for FDA approval for generic ketamine for a variety of mental health concerns, so that this treatment will be covered by medical insurance.

Ketamine treatment is the crest of the wave of novel, experiential, visionary medicines. We believe there is much to learn from the economics of ketamine that applies to MDMA, psilocybin, and other emerging psychedelic medicines. We can look to what is happening in the ketamine space as a frontrunner model, for good and ill, of how psychedelic medicine can be offered in the existing legal socio-medical infrastructure. We need to educate our patients, find ways to reduce the cost of treatment, redress the FDA approval process, reform structural bias in clinic ownership laws, respect and compensate our psychedelic ancestors, and reduce misuse and harms. Finally, we must tackle the flaws in the healthcare system so that treatment reaches the people who need it most. This is how we embody the promise of ketamine as a medicine to heal. We ignore power dynamics and profit-making at our own peril. We must strive to align our economics with our ethics, such that we build a psychedelic mental health infrastructure that works in the service of equitability, accessibility, and compassionate care.

raquel

Raquel Bennett, Psy.D., is a psychologist and ketamine specialist from Berkeley, CA. She primarily works with people who are living with severe depression, bipolar disorder, and/or suicidal ideation. She is fascinated by the antidepressant properties of ketamine, and has been studying this since 2002. She also has a long-standing interest in the psychedelic and mystical properties of ketamine, and the potential for this medicine to be used for spiritual exploration. Dr. Bennett is the founder of KRIYA Institute and the organizer of KRIYA Conference, which is an annual and international event devoted to understanding the uses of ketamine in psychiatry and psychotherapy. You can learn more about her work at www.kriyainstitute.com. She can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.






heather valdez

Dr. Alex Belser is a licensed psychologist and psychedelic researcher at Yale University and New York University. His research with psilocybin and MDMA focuses on developing psychedelic treatments to treat depression, anxiety, obsessive-compulsive disorder, addiction, and trauma. Dr. Belser is the Co-Investigator of a study investigating psilocybin-induced neuroplasticity in the treatment of major depression at Yale. He also serves as the Co-Investigator of a study investigating the neural correlates of the effects of psilocybin in OCD. In 2006, Dr. Belser was a founding member of the Psychedelic Research Group at New York University, and he is a qualitative researcher on NYU’s Psilocybin Religious Leaders Study. He is study therapist for the MAPS Phase 3 trial of MDMA-assisted psychotherapy for the treatment of severe PTSD. Dr. Belser completed his clinical and research training in psychology at Bellevue Hospital, New York Psychiatric Institute at Columbia University Medical Center, and Mount Sinai Beth Israel Hospital. He is a graduate of Georgetown University, New York University, and the University of Cambridge. His practice website is https://www.centerforbreakthroughs.com/ and his website site is http://alexbelser.com/