'Serious concerns' over TGA's decision making on landmark psilocybin, MDMA ruling

In a leafy backyard in suburban Sydney, a father dives into his pool.

While this carefree scene might seem normal, for this man — who asked that we use a false name — it was unusual just six months ago.

Back then, Andrew was crippled by the symptoms of PTSD and associated physical pain: "I was almost non-functional and was not contributing to society or my family."

But that all changed with a course of psychedelic therapy, taken illegally through an underground therapist, on a daybed overlooking a valley in the bush.

Andrew had been haunted by flashbacks ever since he walked into a shooting rampage in Burleigh Heads some 30 years ago.

"I would have flashbacks probably 20 to 30 times a day… at night, it would be incessant nightmares of between eight to 12 different images or smells — the gunshots, the smell of blood.

Now, after just a few months of psychedelic therapy, he said he had not "had a day of symptoms since that first session".

Over the six months that Andrew was undergoing therapy, Australia's peak medical regulator was evaluating an application to reclassify psilocybin and MDMA (the compound in "Ecstasy") as medicines.

It had knocked back a similar proposal just the year before. So when it decided in February to become the first country in the world to approve such a change, it shocked even those who had proposed it.

"We were in our kitchen at home, and one of my colleagues rang up and told us, and we couldn't really believe him," said Tania De Jong, whose organisation had applied to the TGA.

"We just said, 'Are you … are you sure? Are you kidding?' And then he said, 'No, it's definitely true', and then sent us the TGA's formal release announcement, and it was there in print."

Tania runs Mind Medicine Australia with her husband, Peter Hunt. Their organisation's repeated attempts had been knocked back by the TGA.

"Being a pioneer for any kind of social change is really, really hard. And you need to have an enormous amount of grit and persistence and tenacity … Where there's a change that systemic to be made… we all need to be strong as pioneers and fight for what we believe in," she says.

As recently as October last year, the TGA ruled that there was insufficient evidence to down-schedule the drugs. But just months later, in February, it did a spectacular 180-degree turn and approved psychiatrists to use MDMA for PTSD and psilocybin for treatment-resistant depression.

That move divided the psychiatric community. It went against the advice from the peak bodies for doctors, psychiatrists and psychologists, respectively. And Background Briefing can reveal it went against the advice of the TGA's own advisory committee.

So, what caused the typically conservative TGA to change its mind, in a matter of months?

Push for change

Philanthropists Tania de Jong, an opera singer, and her husband Peter Hunt, a former investment banker, started Mind Medicine Australia in 2018, following a psychedelic therapy experience in Amsterdam in 2016 that they describe as life-changing.

The charity's board includes The Ethics Centre boss Simon Longstaff, former Coalition trade minister Andrew Robb, and investment banker Nicholas Smedley, among others.

Mind Medicine Australia's first application was rejected, following advice from the TGA's advisory committee.

That committee met again in June last year to consider the organisation's second, more conservative application. Background Briefing can reveal it still strongly opposed the down-scheduling.

Minutes from the meeting, obtained under freedom of information laws, reveal the committee's reservations about listing the drugs as medicines.

"Members agreed that there was little additional evidence presented in this application … As such, the main barrier to down-scheduling psilocybine was therefore still a lack of established therapeutic value.

"Members expressed several concerns, including the broadness of the indication included in the proposal (treatment-resistant mental illness), the lack of phase III trials, and the problems associated with the translation from a clinical trial setting to clinical practice.

"The Committee agreed that the risk of diversion is low in a controlled medical environment, but noted that, contrary to the assertions of the applicant, there are significant risks of diversion at other points in the supply chain. In addition, not dispensing from a pharmacy would bypass the real-time prescription monitoring system, hence limiting oversight and governance.

"There remains no approved therapeutic product containing psilocybine anywhere in the world."

The committee's advice for MDMA echoed these concerns.

The committee also noted the Australian Medical Association's continued opposition to the down-scheduling.

So it was little surprise that the secret TGA decision-maker known as "the delegate" made the interim decision in October to keep the drugs prohibited.

For most drugs, that would be the end of the story — TGA insiders told Background Briefing it's uncommon for a final decision to diverge from the interim decision. But this time was different.

In the intervening months, Mind Medicine Australia doubled down on its campaign.

The group called for supporters to put in submissions opposing the TGA's interim decision, and more than 3,000 heeded the call. That's on top of the more than 13,000 public submissions the TGA had received before the interim decision.

The TGA delegate noted how few submissions came from actual psychiatrists or relevant organisations (submissions from the Royal Australian and New Zealand College of Psychiatrists and the Australian Psychological Society supported the interim decision not to down-schedule the drugs). The delegate said the submissions — largely corralled by MMA — were brief, and most failed to address any of the reservations expressed in its interim decision.

The TGA's expert committee shared this view, advising the delegate that the submissions "did not identify any new or compelling evidence, and instead focused on emphasising human interest or philosophical points of view".

Still, the delegate said the number of submissions was "a reasonable indicator of the scope and gravity of the issues … addressed in the application".

The submission campaign was just the beginning.

Mind Medicine Australia engaged new lobbyists — Hawker Britton, known for their cosy relationships with the Labor government — who Peter says helped them "understand the dynamics of Canberra".

The organisation then flew out Imperial College of London neuropsychopharmacologist David Nutt for a roadshow up and down the east coast. Professor Nutt's world-leading research has made him something of a celebrity in psychedelic circles.

During a whirlwind tour sponsored by herbal tincture and organic chocolate brands, he addressed packed town halls in Byron Bay, Sydney, Canberra and Melbourne. Then there were the black-tie events with philanthropists and stakeholders at the Australian Clubs in Sydney and Melbourne.

Alongside him was Sydney-based widow Vanessa, who asked that we only use her first name to protect her daughter's privacy.

Vanessa's husband of 30 years, Franco, died by suicide after a battle with treatment-resistant depression — a condition for which Mind Medicine Australia had applied for psilocybin to be used as a treatment.

She said Franco underwent nine hospitalisations, 96 rounds of electric shock therapy, 24 rounds of transmagnetic stimulation and was administered 19 antidepressants. At his lowest points, Vanessa says he asked her to help him end his life.

Desperate to save him, Vanessa considered psychedelic therapy. While the TGA could grant special access to psilocybin, Vanessa learnt NSW Health refused permits outside of clinical trials. Her only option would be to break the law or seek treatment overseas, which was complicated by COVID travel bans.

"My concern is for [our teenage daughter] now, her mental well-being because it's statistically known that children with a parent who has suicided are at higher risk of suicide," she said.

When the TGA campaign kicked off, Vanessa had a chance to meet the people restricting the drugs she felt might have saved her husband.

"I was just a little part in that of trying to make it feel humanised. These people all sit behind their desks, researching, but not actually personally being affected by it.

"I'd often ask the question of these ministers, politicians, lobbyists, anyone — 'Have you personally been affected by mental health, yourself or anyone around you?' Those that say 'No', I don't know that they really understand the true meaning of mental health. I never really understood mental health until Franco became sick. And then it opened my eyes up to the pain that people are suffering out there."

During the tour, Professor Nutt presented to federal Health Minister Mark Butler's advisor, Australia's Chief Psychiatrist, ministers and staff from the state health agencies, the Joint Health Command for veteran suicide, and the peak body for psychiatrists.

Perhaps most critically, Professor Nutt gave a presentation to the TGA that was watched by 130 staff. They also played a video of Vanessa delivering a letter to the office of her local member, Prime Minister Anthony Albanese, sharing her heartbreaking story and asking him to support the down-scheduling.

Mind Medicine Australia believes that presentation helped change the TGA's mind.

"I'm sure the delegate… would have been on the zoom watching," said Peter Hunt.

The TGA delegate also cited the presentation by Professor Nutt as one of the materials considered in down-scheduling the drugs.

A TGA insider who spoke with Background Briefing on condition of anonymity said such a presentation was "unusual".

Outgoing head of the TGA John Skerritt insisted the campaign did not influence the delegate to backflip from their interim position: "We certainly didn't have our arm twisted by Mind Medicine [Australia].

"I actually had to on several occasions say to staff, 'Look, I know that they're driving you crazy, put their approaches and the way they work to one side, think about the medical criteria and the scientific criteria and the regulatory issues only'.

"And I also counselled Mind Medicine at some stages that they were perhaps working against their own case by frankly, being so aggressive. I lost count of the number of emails they would have sent staff here."

However, Professor Skeritt told Background Briefing that he did provide MMA with the names and public phone numbers of the chief health officers in each state.

The committee of experts and state regulators that advise the TGA were similarly displeased by MMA's outreach, according to a TGA insider.

"The committee was not pleased MMA had been contacting us directly to try to influence the meeting [to advise on down-scheduling the drugs]."

While Professor Skerritt said the delegate was able to "turn off the noise in the background", members of the research community fear otherwise.

High-profile psychiatrist and Orygen CEO Patrick McGorry tweeted: "It is premature to allow psilocybin to be used beyond research trials. Can we be reassured that approval is not due to intense private lobbying/special pleading by a zealous private group?"

McGorry is conducting his own trial in the space, much like psychiatrist Nigel Strauss, who, despite long advocating for the potential of psychedelic therapy, felt the decision was premature.

"We're doing the research here, but it's early days still," said Professor Strauss. "And when you look around the world at all the research that's available, there hasn't been that much.

"I'm not really aware of what drove the TGA to make this change decision. All I can say, is that it's definitely not research because there hasn't been any great change … particularly in Australia.

Professor Strauss is concerned about how the decision was reached.

"There's an enormous pressure around from — I call them 'lobbyists' — who feel that these drugs should be introduced as soon as possible; that there's a huge demand for these drugs and that we are in the so-called mental health crisis and these drugs are going to have a profound effect upon the treatment of psychiatric illness in Australia. They may or may not be right, but certainly, I think they've had a very strong influence on the TGA and their decision-making."

Ultimately, the TGA delegate's decision was narrower than MMA's application: while the organisation had applied for the drugs to be used for "all treatment-resistant mental illnesses", the delegate felt the evidence justified using MDMA for PTSD only, and psilocybin for treatment-resistant depression.

What's more, the delegate introduced new controls that they said made them comfortable to down-schedule the drugs: psychiatrists must apply to be "authorised prescribers", requiring approval by a senior TGA person and a human ethics research committee similar to the ones that endorse clinical trials.

Professor Skerritt said once the controls were outlined by the delegate to the college of psychiatrists, "they were a lot more comfortable with this process" and "we actually had better support". The RANZCP said it was not consulted on the controls.

Finally, the delegate said the results of a new study published in the New England Journal of Medicine "strengthen the already promising body of evidence for the efficacy of psilocybin in the treatment of [treatment-resistant depression] and support my decision to increase the accessibility".

Claim states and territories blindsided

A TGA insider told Background Briefing there was not enough consultation with the states and territories on how the down-scheduling would work in practice. That was despite the TGA's own expert committee warning that the terms of the down-scheduling would be "exceedingly difficult, if not impossible, to regulate and enforce at state and territory level".

The TGA confirmed to Background Briefing that state and territory regulators learnt of the final decision the day before it was announced publicly.

"The TGA just did this, and [states and territories] have to pick up the pieces," said the TGA insider.

"People at the lower levels of the TGA feel it was pushed onto them. They have to implement it, then states and territories scream at them. They're very apologetic."

A TGA spokesperson said follow-up meetings with the representatives of the states and territories "indicates that most, if not all, will be able to make the required changes [to their legislation] by July 1".

NSW Health and Victoria Health declined to comment on whether they were adequately consulted but said in statements they would automatically adopt the rescheduling on July 1.

It's not the first time the TGA has clashed with the states over psychedelics. And a psychiatrist named Eli Kotler has found himself caught in the middle.

Dr Kotler applied to the TGA for special permission to treat a patient with MDMA for their PTSD.

"The TGA, they actually said yes very quickly within a week."

Freedom Of Information documents showed Dr Kotler's application was one of 17 approved through the TGA's Special Access Scheme since 2018.

"And then the TGA said the next step is I have to apply to the Victorian Government. And so I did that."

Victoria Health refused Dr Kotler's permit, so Dr Kotler launched a court case in late 2021 appealing the decision, bankrolled by Mind Medicine Australia, of which he's a board member.

Then, in September 2022, the Victorian government regulated to restrict the use of schedule nine drugs like MDMA and psilocybin to clinical trials.

"Presumably they legislated or they regulated because they knew that there was a big chance the appeal would succeed," said Mr Hunt.

"And you've got to stand back and say, 'Why on Earth would you change the regulations to prevent that patient receiving a therapy that could actually be life-saving?' I mean, I'd love to see a documentary done on that decision-making process within the Victorian government."

Victoria Health said the change brought its legislation in line with other states, including NSW. The TGA had approved 15 applications from NSW, but Background Briefing understands NSW Health has never granted a permit outside of a clinical trial.

The TGA criticised the Victorian government's decision, calling its move "unduly inflexible" and saying it "undermined the intent" of the regulations.

In November 2022, Professor Skerritt told Mind Medicine Australia that rescheduling MDMA and psilocybin as Schedule 8 controlled medicines would make them more likely to be approved by the states and territories.

"If I wanted to circumvent the states and territories, that's exactly how I'd do it," said the TGA insider.

"Moving these drugs to Schedule 8 cuts the government regulation out completely. That's a slap in the face to a state regulator and opens up many opportunities to lose control of how the medicine is being supplied. Once you open the door even a crack, then it's very hard to close it behind you."

But Professor Skerritt said it was "not at all appropriate to frame this as a states versus Commonwealth" issue.

A psychedelic rush

In some bare rooms in an office overlooking the sandstone of Sydney's landmark Queen Victoria Building, Ted Cassidy is gearing up to administer psychedelics.

The psychiatrist is a co-founder of the for-profit Monarch Mental Health Group, which offers innovative mental health therapies like transcranial magnetic stimulation (TMS) — and if approved by the TGA, psychedelic therapy.

"I'm not a psychedelic guy. I'm not a TMS guy. I'm interested in results, and I'm interested in treatments," he said.

"When something comes to me, it looks safe, it looks effective — well, there's a sense that it might be effective — I'm happy to try it."

The therapy rooms aren't much to look at, at the moment — they are just big office spaces with a desk or two. But come July, this is where patients may be taking psychedelics — before hopping on a train home.

"People in a psychedelic state are often in a room for sort of eight to 12 hours. So you've got to start thinking about, you know, toilet facilities, something to eat, those sorts of things. And people need a bit of space to be around. So you don't really want them in that sort of 9 square-metre GP office."

The length of those sessions — supervised by a psychiatrist — is why commentators are speculating a course of therapy could cost as much as a small car.

Dr Cassidy gave an estimate of $20-30,000, but later said the cost would depend on the final conditions prescribed by the TGA — largely, whether a psychiatrist would need to be present for the full session, or whether psychotherapy could be administered by another mental-health worker.

Dr Cassidy is an advisor to MMA and is set to commercialise the TGA's decision. Mr Hunt is also a shareholder and director of a company behind Dr Cassidy's clinics.

But Mr Hunt insists their investment in psychedelic therapy does not present a conflict of interest with his advocacy work through the MMA charity.

"The money I make from Monarch is nothing compared to the money that I'm spending or donating to Mind Medicine to get this over the line," said Mr Hunt.

Mr Hunt added that most GPs and psychologists are for-profit businesses: "They're making money, but they can manage the risk."

Mr Hunt also pledged to Background Briefing that if the therapy cost $30,000, he would resign as a Monarch director in protest.

Previously, in a webinar, speaking generally about the cost of therapy, Mr Hunt said the cost was likely to be $15-20,000.

"What I'd say to people is the expense is going to be low compared with someone being reliant on government handouts for decades, perhaps being unable to go to work. But yes, the up-front cost is going to be significant."

Mr Hunt told Background Briefing that MMA was establishing a fund for disadvantaged patients but acknowledged such a model would not be able to meet demand and would ultimately require government support.

Professor Skerritt has not ruled out group therapy being permitted in the future, which could cut costs significantly.

"What we haven't done is said: here is your clinical paradigm. You must stick to it."

In time, if positive evidence in support of psychedelic treatments continues to mount, Professor Skerritt thinks they will receive government support.

"If we broaden the evidence base, it may be not long in the future … these drugs could go through the regulatory system and be considered for Pharmaceutical Benefits Scheme and Medicare."

In the meantime, the TGA's own expert committee warned in the minutes obtained by Background Briefing that putting psychiatrists in charge "would create a significant impediment to patient access due to the cost involved and the shortage of available psychiatrists, particularly if specific training is required".

Currently, Australia's most prominent training course in psychedelic therapy is offered by MMA. It's not clear what role — if any — it will play in training or accrediting psychiatrists to practise from July. But Ms de Jong said in a webinar that they had been "inundated" with enquiries since the TGA decision.

The TGA's expert committee raised concerns about training:

"There were concerns regarding the potential conflict of interest arising from the requirement for specialist training, which currently appears to be provided solely by the applicant [MMA] and no other independent accredited providers. The Committee observed that this diminishes the weight of the evidence that suitable clinical protocols have been established," the committee minutes state.

"A Committee member highlighted that the training proposed by the applicant was not accredited by a board or organisation recognised by the Australian Health Practitioner Regulation Authority (AHPRA) or the [Royal Australian and New Zealand College of Psychiatrists]."

The committee further advised that "It will take time to develop a curriculum and accredited training process for psychiatrists. To protect public health and prevent inappropriate use, MDMA [and psilocybin] should not be down-scheduled until all necessary safeguards have been established and implemented."

Now, the peak body for psychiatrists is racing to prepare those safeguards by July.

"The College is currently considering what level of training would be appropriate, and has not currently developed or endorsed any training programs," wrote RANZCP president Vinay Lakra.

Associate Professor Lakra said the College was developing guidance for psychiatrists, and its priority was ensuring "the use of psilocybin and MDMA … effectively mirrors the rigour involved in clinical trials, so the body of clinical evidence … can continue to develop".

'The for-profit world loves big problems'

For Mind Medicine Australia, getting psychedelics down-scheduled was always just one step in a larger project.

A former investment banker, Mr Hunt began thinking about the logistics of supply and distribution well before the TGA budged.

In 2022, he gave a presentation titled: "Why med-tech firms, venture capitalists and bankers are investing in psychedelic medicine."

"When we started Mind Medicine two years ago, there was one for-profit company: Compass," Mr Hunt said in the presentation.

"And it was, frankly, struggling. Today, we've got over 50 for-profit companies. We've had large capital raisings by a number of them. And Compass is now worth over $2 billion and has raised about $270 million. So over a two-year period, there's been a dramatic change in the for-profit world. And the obvious question is why has that occurred? Well, the for-profit world loves big problems."

Mr Hunt went on to say that "where there's money to be made, some people will enter it not for the right reason — we've got to make sure the patient comes first."

Despite this concern, he said: "The argument for why we need for-profit companies is simply this: that there's massive inertia in our system … It's in the risk-averse nature of governments. And it's in the risk-averse nature of peak bodies."

Last year, Four Corners obtained a confidential presentation authored by a member of MMA's fundraising and finance committee in 2020. It proposed the creation of a for-profit psychedelic company, with Mind Medicine Australia as a key shareholder.

It pitched raising $50 million through investors before a significant public listing on the Australian Stock Exchange. The company's proposed business model was the manufacture, licensing, importation and distribution of psilocybin and MDMA.

When Background Briefing asked MMA about this confidential presentation proposing "the commercial evolution of Mind Medicine Australia", Mr Hunt said he had "never seen it".

However, after putting in its applications to the TGA, MMA registered a number of business names before re-registering them under a new for-profit company: KMT Pharmaceuticals, which MMA has a 25 per cent stake in.

Mr Hunt said while KMT Pharmaceuticals is a for-profit company, its motive is to make the drugs accessible for the lowest possible price.

He said this would undercut the other companies in the space, including biotech Emyria, which he personally holds shares in.

"The reason it's a separate company [to MMA] is that the company may in future need some capital in order to build itself as a distributor in Australia. It's much easier to borrow money in a for-profit company than it is to borrow money in a charity. So we're being business-like, but within a charitable framework.

"We will never, Tania and I, take any money out of the private sector for the work we're doing. We're very focussed as philanthropists on this."

Ms de Jong added: "We take no salary for this or any money whatsoever either. Effectively all we do is give money into the sector."

At the same time as it created KMT Pharmaceuticals, MMA registered more new business names — Mushroom Karma Pharma, Magic Mushrooms Australia, and Altered States Clinics — that Mr Hunt said they "may use in future".

Vanessa bristled at any suggestion that Mind Medicine's Australia's leaders have any commercial interest in psychedelics.

"You've got two beautiful human beings who just want to help Australia, just help Australians. That's all I felt the whole time I have known Peter and Tania.

"They just have a passion to want to see change happen, and we can't afford to let it wait years and years. We can't do that. People are dying every day from suicide."

'I would have paid whatever it took'

It remains to be seen how the commercialisation of psychedelic therapy will play out. But the proposed hefty price tag is no barrier for some potential customers.

"I would have mortgaged my house to have the breakthrough that I had," said Andrew, who believes he no longer has PTSD and treatment-resistant depression.

"I got my life back. Now, I got a life that I never had. I had never felt true happiness. I had never felt true relaxation, fulfilment.

"I would have paid whatever it took because I didn't have a life before I did this treatment."

But some researchers believe we're enlisting Australians in a "live experiment".

"We've certainly seen impressive outcomes in some patients lasting at least — at this point in time — many months," said Paul Liknaitzky, who heads up the clinical psychedelic lab at Monash University and is running a trial of psilocybin-assisted therapy for anxiety.

"We have also seen at the opposite end of the spectrum patients who don't respond well, who have very tough experiences and who are not necessarily better for it at the end.

"We haven't seen the long-term outcomes yet because it's too early to say."

Dr Litnaizky's caution is shared by many of his peers in the research and regulatory fields.

"You have to ask, 'Who's making those public policy decisions and what was their motivation?'" said the TGA insider.

"Australia is the only jurisdiction in the world who's done this. We're not the leader for drug down-scheduling — the other countries all did cannabis first.

"Why are we all of a sudden taking this active stance? Was it because of the evidence? The advice from the expert committee has been that's not the case."