The Drug Development to Reimbursement Pathway

Bringing a new medicine to patients involves many steps, from drug creation to ensuring patient access. Each step presents unique challenges, from testing the drug to getting approval and making it affordable.

This chapter examines all the main steps: early testing, clinical trials, regulatory approval, and setting prices with health systems. We explain how these steps work together to provide safe and effective treatments for patients.

A critical part of this process is learning from each step to improve the others. For example, what we learn from health system reviews can help make better clinical trials. Similarly, choices made early in drug testing can affect how easily the treatment can be approved and paid for later. Understanding these connections helps create a smoother path from developing a drug to helping patients.

This chapter also examines everyone involved—regulators, insurance companies, doctors, and patient groups. By understanding how these groups work together, we can better understand what it takes to bring new treatments like psychedelic therapies to patients who need them.

Drug Discovery and Preclinical Development

Creating new medicines starts with finding (drug discovery) and testing (preclinical development) potential drug compounds before clinical trials begin. This phase involves identifying and checking compounds that could become treatments. Scientists must find compounds that work and prove they are safe to test in humans.[10]1

Compound Identification

Scientists look for valuable compounds in several ways. They test extensive collections of chemicals, design compounds based on how diseases work, and study natural substances that might have medical benefits. They look for compounds that can affect specific parts of the body involved in diseases, checking how well they work and whether they have properties that make them good medicines.

After finding promising compounds, chemists work to improve them. They change the chemical structure to help the compounds work better and cause fewer side effects. They keep making improvements until they find the best possible version.

Preclinical Studies on Safety, Efficacy, Pharmacodynamics, and Pharmacokinetics

Scientists must prove that any new compound is safe before testing it on humans. They must collect specific information to demonstrate to regulators that starting human trials is reasonable.

Scientists test compounds in two main ways: in vitro (in lab dishes with cells or tissues) and in vivo (in living animals). Lab tests show how compounds affect cells and help predict possible problems. Animal studies show how compounds move through the body and what they do. These studies help determine proper doses and find any safety issues.

In vivo studies on animal models evaluate the compound's pharmacodynamics (PD) and pharmacokinetics (PK). Pharmacodynamic studies examine the compound's physiological effects and mechanism of action within a living organism. Pharmacokinetic studies assess how the compound is absorbed, distributed, metabolised, and excreted (ADME) over time. PD and PK studies help determine appropriate dosing regimens and identify potential safety concerns.

Toxicology studies help scientists determine whether new drugs are safe before testing them on humans. These studies look for harmful effects on different parts of the body. Scientists test the drug's effects in the short term and the long term. They check if the drug affects reproduction, damages DNA, or might cause cancer. They focus on how the drug affects critical bodily functions like the heart, breathing, and brain to catch dangerous side effects.

In Europe, preclinical studies must adhere to Good Laboratory Practice (GLP) standards and the European Medicines Agency (EMA) guidelines. The data generated form the basis of the Investigational Medicinal Product Dossier (IMPD), a critical Clinical Trial Application (CTA) component.

Impact of Regulatory Classifications on Preclinical Research

When developing new drugs, scientists must determine whether regulatory bodies classify them as controlled substances, which carry strict legal regulations. This classification is important because it affects the research's ability to proceed.

In Europe, different drugs have different levels of control. For example, Schedule I of the United Nations Convention on Psychotropic Substances considers compounds listed under it to have a high potential for abuse with no recognised medical use (UN, 1971). Scientists need special permits to work with these drugs. They must keep them in secure places and keep detailed records of how they use them. These rules can make research take longer and cost more money. It can also be more challenging to work with scientists in other countries because different countries have different rules.

Considerations for Compounds with Existing Preclinical Data Versus New Entities

Scientists need different approaches when studying existing drugs versus completely new ones (called new chemical entities or NCEs). Here's what they consider:

The process can be faster for existing drugs that have already been tested and used. Scientists can try to find new uses for these drugs, which is called drug repurposing. Repurposing is helpful because researchers already know a lot about how safe the drug is and how it moves through the body.

A good example is ketamine. It was first developed and approved as an anaesthetic in 1970, but scientists later discovered its potential in treating depression. This repurposing led to the development of esketamine (Spravato) for treatment-resistant depression (TRD). When developing esketamine, researchers could build upon decades of safety and pharmacological data from ketamine's use in anaesthesia, though they still needed to prove its safety and efficacy specifically for depression treatment.

However, for NCEs (completely new drugs), scientists must conduct all possible tests from scratch. They must thoroughly check whether the drug is safe, how it works, and how the body handles it. This process takes more time and money because everything is new and needs complete testing.

Considerations for Psychedelics

Psychedelic compounds offer significant promise but also add layers of complexity in early development. For well‐studied substances like psilocybin, MDMA, and LSD, existing preclinical data can reduce the duplication of efforts. However, regulators still require updated safety assessments when developers introduce new formulations, dosing regimens, or delivery methods.

In addition to standard in vitro and in vivo studies, evaluating the neurobiological and behavioural effects of these compounds is essential. Researchers must pay special attention to psychedelics' potential for misuse and adverse impacts on brain function.

Due to strict regulatory controls (often because these compounds are classified as Schedule I substances), developers must secure specialised licenses, maintain secure storage, and follow varying national and EU guidelines. Collaborative efforts with specialised research centres and adherence to Good Laboratory Practice (GLP) standards can help streamline this process.

Clinical Trial Phases

Following the successful completion of preclinical development, where researchers test potential new drugs in laboratories and on animals, the next crucial step evaluates these drugs in humans through clinical trials. Developers need these trials to obtain approval from regulatory authorities and secure reimbursement from healthcare systems, demonstrating that the treatment is safe and effective for patients. Researchers conduct clinical trials in four phases, each designed to answer specific questions about the new drug.

In 2024, the European Union launched a comprehensive "one-stop shop" initiative to support biotechnology companies throughout their development journey (European Commission, 2025). This initiative streamlines the process of bringing new therapies to market by providing centralised access to regulatory guidance, research infrastructure, and business development resources. For clinical trials specifically, it established a unified process for submitting, validating, and approving clinical trial applications across EU Member States while maintaining consistent standards and procedures.

Phase I: Safety and Dosage

Phase I trials are the first testing stage in human subjects and primarily focus on safety. In this phase, a small group of healthy volunteers—usually between 20 and 100 individuals—is given the drug. The main goals are:

• Assessing Safety: To determine if the drug is safe for human use and to identify any side effects.

• Determining Dosage: To find the optimal dose that provides the desired effect with minimal adverse reactions.

• Understanding Drug Behaviour: To study how the body processes the drug, including how it absorbs, distributes, metabolises, and excretes it (known as pharmacokinetics).

Researchers closely monitor participants to observe any adverse effects. They collect data on how the drug behaves in the human body, which helps plan the dosing for the subsequent phases.

Phase II: Efficacy and Side Effects

Phase II trials aim to evaluate the drug's efficacy in people with the condition it is meant to treat while continuing to assess its safety. This phase typically involves 100 to 300 patients. The main objectives are:

• Evaluating Efficacy: To see if the drug has a beneficial effect on the disease or condition.

• Further Assessing Safety: To monitor for side effects and determine how they relate to the dose.

• Refining Dosage and Administration: Adjust dosing schedules and methods based on patient responses.

Researchers gather data on the drug's efficacy and continue monitoring safety, which helps optimise the treatment protocol for Phase III trials.

Early collaboration with health technology assessment (HTA) bodies or payer advisory groups during the early clinical trial phases (usually at Phase II) can help developers anticipate reimbursement challenges, such as identifying the most appropriate patient population, relevant and recognised study endpoints and comparator therapies, which will help demonstrate the clinical and economic value required to support future reimbursement decisions.

Phase III: Confirmatory Trials

Phase III trials are conducted on a larger scale, involving several hundred to low thousands of patients across multiple locations. The primary goals are:

• Confirming Efficacy: To provide strong evidence that the drug is efficacious for its intended use.

• Collecting Comprehensive Safety Data: To identify less common side effects and gather more information on the drug's safety profile.

• Comparing with Standard Treatments: Sometimes included as a key objective where conditions have established standards of care.

Phase III trials are randomised and controlled studies designed to meet regulatory requirements for marketing approval in target regions, such as the Food and Drug Administration (FDA) in the United States or the EMA in Europe. Trial design, endpoints, and data collection are carefully planned in consultation with regulatory authorities to ensure the studies provide the evidence needed for drug approval and registration.

Designing Phase III trials also requires considering real-world applicability, patient quality of life, and impacting healthcare resource utilisation. Collaborating with payer representatives before finalising study protocols helps align trial objectives and outcomes, strengthening the therapy's value proposition during future pricing and reimbursement negotiations.

Phase IV: Post-Marketing Surveillance

After a drug has been approved and is available on the market, Phase IV trials continue to monitor its performance in the general population. The main objectives are:

• Monitoring Long-Term Safety: To detect rare or long-term side effects that may not have been apparent in earlier trials.

• Evaluating Long-Term Effectiveness: To assess how well the drug works over an extended period in real-world conditions.

• Studying Diverse Populations: To understand how the drug affects different groups of people, such as older adults, children, or those with other health conditions.

Data from Phase IV studies can lead to improvements in how the drug is used or provide information for additional warnings and precautions. Additionally, these studies are crucial in supporting label expansion initiatives to broaden the drug's approved indications, strengthening payor negotiations through real-world evidence of clinical and economic value, validating treatment protocols in specific patient subgroups, and informing healthcare system decision-making regarding optimal therapeutic positioning and resource allocation.

Considerations for Psychedelics

Clinical testing for psychedelic therapies demands tailored protocols at every phase. In Phase I trials, extra safeguards are implemented to monitor physical and psychological responses. Enhanced observation protocols and carefully controlled clinical environments help manage the acute, often intense, effects.

Phase II trials introduce further complexity. The treatment setting—including providing psychological support—can significantly influence patient outcomes. Therefore, structured therapeutic environments are critical to ensuring robust safety and efficacy data.

Phase III trials face the inherent challenge of functional unblinding. The unmistakable subjective effects of psychedelics make it difficult to maintain true double-blind conditions. Alternative designs, such as using active placebos, may mitigate this issue but require careful interpretation of results.

Phase IV studies remain indispensable. They capture long-term safety and real-world effectiveness, which are particularly important for therapies that may offer rapid and sustained benefits from limited dosing.

Regulatory Approval

Once a new therapy has completed the clinical trial phases, it must obtain regulatory approval before being marketed and made available to patients. The EMA oversees this process in the EU, while the FDA plays a similar role in the United States. The Medicines and Healthcare products Regulatory Agency (MHRA) serves as the independent regulator in the UK.

Most often, global drug developers target FDA approval first, driven primarily by the size and value of the U.S. pharmaceutical market. The U.S. market is the largest by value, making it a strategic priority for most companies.

Following FDA approval, developers typically prepare a dossier for submission to the EMA and MHRA. The requirements between these regulatory agencies can differ, and additional confirmatory studies may be necessary to meet their specific standards. In the UK, the MHRA operates an International Recognition Procedure (IRP), whereby eligible drugs with approvals in countries including the U.S., Canada, Switzerland and EU can request an expedited review by the MHRA.

Importantly, the EMA maintains its own rigorous evaluation process and doesn't automatically accept FDA approvals. While the EMA does not specify a required percentage of European trial sites, they do require that clinical trials included in marketing authorisation applications comply with EU standards, including Good Clinical Practice (GCP) and ethical principles, regardless of where researchers conduct the trials. The EMA evaluates whether the submitted data is sufficiently relevant to European populations and healthcare contexts. Similarly, the MHRA often requires evidence of safety and efficacy in UK populations.

Manufacturers can pursue several regulatory pathways within the EU to obtain marketing authorisation. The Centralised Procedure, coordinated by the EMA, results in a single marketing authorisation valid throughout all EU Member States and is mandatory for certain products, including most novel therapeutics and those for specific conditions. Alternatively, the Decentralised Procedure allows applications in multiple EU countries simultaneously when no prior authorisation exists, while the Mutual Recognition Procedure (MRP) enables a marketing authorisation granted by one EU member state to be recognised by other Member States. Finally, National Procedures permit companies to seek authorisation in a single EU country, though this approach is less common for innovative therapies.

Submission to Regulatory Authorities

The journey towards regulatory approval includes preparing and submitting a comprehensive dossier to the relevant regulatory authorities. In the United States, this involves compiling a New Drug Application (NDA) for the FDA, while in the EU, it requires a Marketing Authorisation Application (MAA) for the EMA.

These dossiers must include detailed information from all stages of drug development, encompassing preclinical data, clinical trial results, and quality control measures. The goal is to demonstrate that the drug is safe and effective, has a positive and acceptable benefit-risk profile, and is manufactured to high-quality standards.

Beyond the centralised EMA pathway, companies can pursue country-specific regulatory strategies within the EU. One approach is to initially seek approval in a single EU member state through its national regulatory authority and then expand to other countries through the MRP.

This strategy might be particularly relevant for psychedelic therapies, where regulatory and cultural attitudes vary significantly across Member States. For instance, a company might first pursue approval in countries with more progressive policies towards psychedelics, such as the Netherlands, and then leverage this approval to expand into selected other EU Member States based on their policy environment and market access conditions.

Regulatory Requirements

Regulatory authorities require robust evidence to ensure that any new therapy meets stringent safety, efficacy, and quality standards. This evidence includes comprehensive clinical trial data showing the drug effectively treats the intended condition without unacceptable risks. Additionally, manufacturers must provide detailed information about the drug’s manufacturing process to ensure consistency and purity.

For drugs classified as controlled substances, such as many psychedelics, there are additional layers of regulation. Companies must address specific requirements related to the handling, storing, and distribution of these substances to prevent misuse and ensure safety. These requirements vary by jurisdiction and require separate review and sign-off in each country where the drug will be developed or marketed.

Regulatory Pathways for New Therapies

Various regulatory pathways are available for new therapies, each designed to expedite the approval process under certain conditions. The standard approval pathway involves thoroughly reviewing all submitted data, typically taking the EMA up to 210 days to decide. This timeline does not include the necessary pauses (known as clock stops) needed for the company to answer questions and provide additional information.

However, accelerated pathways are available for therapies that offer significant benefits over existing treatments or address unmet medical needs. These include the EMA’s Accelerated Assessment, which reduces the review time to 150 days, and the EMA’s Conditional Marketing Authorisation, which allows for earlier approval based on less complete data, provided the company commits to further studies after approval. The EMA’s PRIME (Priority Medicines) scheme is another potential option, offering enhanced support for developing medicines targeting unmet medical needs and potentially speeding up the evaluation process.

Timelines and Expectations for Regulatory Submissions

Understanding the timelines and expectations associated with regulatory submissions is vital for planning and strategising the approval process. While the FDA and EMA share many similarities in their requirements, there are notable differences that companies must account for. For example, the EMA may request additional studies not required by the FDA, such as trials in specific populations or longer-term safety data. This means that even after obtaining FDA approval, companies may need to conduct further research to meet the EMA’s standards.

When a country or regional regulatory approval is obtained, it may allow some drugs to be accessed in countries outside its jurisdiction, depending on the country's specific rules and regulations and the level of perceived unmet clinical need. A regulatory approval may also be used as a reference filing to request accelerated reviews or mutual recognition approvals in other countries.

Considerations for Psychedelics

The pathway to regulatory approval for psychedelic therapies is inherently complex. Due to their potent effects on the central nervous system, these compounds require a more rigorous risk management approach. Developers must obtain specialised licenses and submit comprehensive safety and efficacy data that address both conventional endpoints and the unique challenges posed by these agents.

Detailed documentation on pharmacodynamics and pharmacokinetics is critical. This data must show that the therapy effectively treats the condition and that robust control measures adequately manage its potential for misuse.

Early and frequent engagement with regulatory bodies can clarify expectations. Scientific advice meetings help ensure that companies fully leverage accelerated or conditional approval pathways when addressing the unmet needs in mental health and other areas.

Health Technology Assessment (HTA)

Following regulatory approval, a new therapy commonly undergoes an HTA and/or payer review process before it can be widely adopted and reimbursed within healthcare systems. HTA bodies systematically evaluate a health technology's value depending on the criteria adopted by the reviewing body. These criteria may include clinical effectiveness, relative clinical effectiveness versus standard of care, budget impact, cost-effectiveness, and broader impacts on the health system and society. The primary goal is to inform policy and decision-making to ensure healthcare systems use resources efficiently and effectively.

In many European countries, HTA has become so deeply integrated into pharmaceutical market access that a poor HTA outcome can lead to no reimbursement for the medicine or potentially reimbursement but at a relatively low price. This integration makes the HTA process a critical step in determining the clinical adoption of a new therapy and its commercial viability in these markets.

Evaluation by HTA Bodies

HTA bodies may assess both the clinical and economic value of new therapies. This assessment is crucial across Europe for determining whether public health systems should fund a treatment. Such an evaluation may include:

• Clinical Importance of Therapy: Determining the clinical relevance of the new therapy through a review of the indicated patient population, the severity of the condition and perceived unmet clinical need in the local population.

• Clinical Effectiveness: Examining the therapy's clinical and patient-relevant benefits, including comparison to existing treatments and standard of care, based on data from clinical trials and other available literature.

• Cost-Effectiveness: Analysing the overall costs and cost-savings associated with the therapy relative to the health benefits it provides, often using metrics like the cost per quality-adjusted life year (QALY) gained.

• Budget Impact: Assessing the financial implications of adopting the therapy on the pharmaceutical medicines budget or the broader healthcare system's budget.

• Health System Impact: Identifying if the therapy can be integrated into existing care pathways or if new care pathways, new infrastructure, or companion services will be required to enable the use of the therapy or technology.

Common European Pathway

The European Union has established a collaborative network with a goal of streamlining some HTA processes across Europe (Joint Clinical Assessments, JCAs). Under the new EU Regulation on HTA, which began implementation in January 2025, there is a move towards JCAs at the EU level. The EU will gradually phase in this regulation until 2030, when the system will evaluate all new medicines approved by the EMA.

This regulation means that for certain health technologies, including new medicinal products, the EU will conduct a single clinical assessment that all EU Member States can use. This joint assessment will focus on the clinical aspects, while individual countries will retain responsibility for economic evaluations and reimbursement decisions.

Differences in HTA Processes Between Countries

Significant differences in the approach to HTA exist in different countries and even across regions within a country. Consequently, it is common for the same drug therapy to receive very different HTA outcomes regarding pricing and reimbursement across Europe.

Clinical value recognition varies significantly. All HTA processes include an element of defining clinical value, and some country processes, such as Germany and France, include formal criteria for publicly ranking clinical value and/or additional clinical value compared to the standard of care.

Definitions of what constitutes clinical value may differ. HTA bodies typically recognise objective clinical outcomes from clinical studies; however, specificities exist in each process. For example, Germany's HTA process recognises only patient-relevant outcomes to inform the clinical benefit rating. One country's HTA may accept an indirect comparison of the therapy in question to the standard of care in that country. Still, other countries' HTAs may recognise comparative clinical value only where researchers have completed a head-to-head randomised controlled trial (RCT).

Cost-effectiveness thresholds are another significant source of variation between countries. Differences in these thresholds mean that a therapy deemed cost-effective in one nation might fail to meet the threshold in another, leading to disparate access to treatments across borders. The underlying methodology, differences in treatment pathways between countries, or differences in the overall willingness-to-pay threshold may drive this.

The variation also extends to evidence requirements, with some countries demanding additional real-world evidence or long-term data beyond what companies submitted for regulatory approval. Furthermore, countries often differ in their preferred economic models and methodological approaches to evaluations, which can substantially affect how they assess outcomes.

The handling of productivity effects represents one central area of divergence among countries. Some nations, like the Netherlands, allow for the inclusion of productivity gains or losses in their economic evaluations, considering how a therapy might affect a patient's ability to work and contribute economically.

In contrast, the UK typically excludes these effects from the National Institute for Health and Care Excellence (NICE) cost-effectiveness assessments. This fundamental difference in approach can lead to varying assessments of the same therapy across different jurisdictions.

Preparing for HTA Evaluations

Developers must take several key steps throughout development to maximise their chances of successful HTA outcomes. They should understand evidence requirements early, including preferred endpoints, comparators, and relevant patient sub-populations that different HTA bodies will evaluate.

Engagement with HTA bodies is essential, as many countries offer scientific advice or early dialogue opportunities. These interactions help clarify expectations and allow developers to adapt their evidence generation. Developers can optimise their resources by designing clinical trials that meet regulatory and HTA requirements. This might include selecting appropriate comparators, gathering health-related quality-of-life data, and choosing study populations that reflect likely treatment recipients.

Developers should begin HTA analysis during Phase III trials and can finalise an HTA dossier within six months of trial completion. However, work on comparing outcomes against current treatments can start earlier, before Phase III data is available. This preparation is crucial, as showing medical benefit or outcome superiority alone will not suffice for HTA approval.

Given significant country differences, developers must prepare country-specific submissions matching national requirements. This tailored approach, while demanding, helps navigate varying HTA body requirements and achieve better market access outcomes.

Considerations for Psychedelics

HTA evaluations for psychedelic therapies must reflect their integrated nature, which combines drug administration with psychological support. Standard HTA models, typically designed for conventional pharmaceuticals, may struggle to evaluate therapy with both drug and non-drug components of care. Current HTA methodologies may also not acknowledge indirect and societal benefits where these are present.

Assessment frameworks should consider long-term remission rates and improvements in quality of life that may arise from a single or a few dosing sessions. These benefits differ markedly from the outcomes of daily medications and require bespoke cost-effectiveness models.

Proactive engagement with HTA bodies is essential. By adapting trial designs to include endpoints that mirror real-world outcomes, developers can better demonstrate the holistic value of psychedelic therapies. Addressing methodological challenges, such as functional unblinding, early on is also critical.

Pricing and Reimbursement Negotiations

After HTA bodies have assessed a new therapy, and assuming they have determined some degree of therapeutic value, manufacturers must next negotiate its price and reimbursement terms with payers. A group with overarching authority may manage the whole HTA, pricing and reimbursement process within a single process, or different groups containing different stakeholders may manage entirely separate processes.

Payers, including national health services, insurance companies, and other funding bodies, are pivotal in determining whether patients can access the therapy and under what conditions. Effective engagement with payers is essential to ensure that the treatment is accessible to patients and financially viable for the manufacturer.

Engaging with Payers

Engaging with payers may involve presenting a compelling and succinct value proposition for the new therapy. Creating a compelling value proposition means demonstrating how the therapy benefits patients and the healthcare system compared to existing treatments. The value proposition should encompass clinical effectiveness, safety, and additional benefits, such as improved quality of life or reduced need for other healthcare services.

Negotiating Pricing Based on Value

Manufacturers centre pricing negotiations around the therapy's perceived value, which HTA bodies may have already formally evaluated and summarised in an HTA report. Manufacturers must justify the proposed price by aligning it with the therapy's benefits. To achieve favourable pricing relative to existing standards of care, manufacturers may focus on:

• Clinical Benefits: Highlighting significant improvements in health outcomes, such as increased survival rates, faster recovery times, or better symptom management.

• Economic Benefits: Demonstrating cost savings for the healthcare system, such as reduced hospitalisations, fewer doctor visits, or decreased need for supportive care.

• Societal Benefits: Considering broader impacts like improved productivity, where patients can return to work sooner or require less caregiving support.

Factors Influencing Pricing Decisions

Several factors influence the outcome of pricing and reimbursement negotiations:

• Budget Impact: Payers assess the financial implications of adopting the new therapy on their budgets. High-cost therapies may face challenges if they significantly increase expenditure, even if they show clear therapeutic benefits.

• Therapeutic Need: Therapies that address unmet medical needs may be viewed more favourably. This can justify higher prices due to the added value they bring.

• Additional Clinical Benefit: Where products have been formally determined to show additional clinical benefit over the standard of care, many payer pricing methodologies recognise and reward this with premium pricing.

• Policy Considerations: Government policies and healthcare priorities can affect negotiations. For example, initiatives to promote access to innovative treatments or to manage costs within certain therapeutic areas may influence decisions.

• Comparator Prices: The cost of existing treatments is considered when evaluating the price of a new therapy. If the new therapy only offers benefits similar to existing therapies, payers may fix the price at the same level or request a slightly discounted price.

• Clinical Advocacy: The presence of clinicians, clinical groups or patient groups advocating for product reimbursement may positively affect reimbursement and pricing decisions. Not all payer decision-making includes reviewing advocacy considerations, but in most decision-making, there is at least an indirect influence from these groups.

Impact of Innovative Therapies on Pricing Models

Psychedelic therapies present unique challenges that do not easily fit into traditional pricing and reimbursement frameworks. The potential for drug and psychotherapeutic support combination, higher upfront costs compared to standard treatments, and potentially large patient populations, require considering alternative pricing approaches.

Innovative therapies, such as personalised medicines, gene therapies, or treatments requiring specialised administration, challenge traditional pricing models. These therapies often come with high development costs and offer significant benefits, but their high up-front prices can strain healthcare budgets. Like psychedelics, they face similar challenges: the drug cost represents only part of the overall therapeutic approach, implementation requires specialised infrastructure and delivery, and there are often data gaps regarding medium to long-term benefits.

Additionally, in many indications being studied for psychedelics, particularly in mental health, the existing standard-of-care drugs are generic and priced too low to serve as meaningful pricing benchmarks for new therapies, despite the potential for significant therapeutic advances.

Adaptive Pricing Models

To accommodate innovative therapies, different pricing models can be explored, such as:

• Value-Based Pricing / Performance-Based Pricing / Risk-Sharing Agreement: Prices are linked to the real-world outcomes achieved by the therapy. The manufacturer receives the agreed-upon price if the therapy delivers the expected benefits. If not, rebates or price adjustments may apply.

• Managed Entry Agreements: These are arrangements where access to the therapy is provided under specific conditions, such as collecting additional data on effectiveness or initially restricting use to certain patient groups.

• Annuity Payments: For very high-cost therapies with long-term patient impacts, payments can be spread over several years rather than paid upfront, easing the immediate financial burden on payers.

• Indication-Based Pricing / Tiered Reimbursement: Different prices may be set for the therapy based on the different conditions or patient groups being treated, reflecting variations in effectiveness and perceived value across indications. In practice, a single ‘blended’ price is often calculated and used for all purchasing.

• Budget Caps: Agreements may include limits on the total expenditure for the therapy within a certain period. Once the cap is reached, additional treatments may be provided but are often provided free of charge by the manufacturer.

• Population Restriction Strategies: The reimbursed population may be narrower than the approved indication, focusing on specific patient subgroups where the therapy demonstrates the highest value.

• Volume-linked Pricing: The price per unit of medicine decreases once certain thresholds are passed, most often calculated over a 3-month or 12-month period.

It is important to note that population restrictions in reimbursement can emerge through two pathways: payer-driven, where healthcare systems identify and limit coverage to the highest-value patient segments, or manufacturer-driven, where companies proactively request reimbursement for a narrower patient population in anticipation of pricing pressures. This strategic approach helps optimise the therapy's value proposition and pricing while managing budget impact concerns.

Preparing for Pricing and Reimbursement Negotiations

Manufacturers can significantly enhance their negotiation position through key strategies focusing on engagement, evidence, and flexibility. Early engagement with payers is crucial, and manufacturers should initiate discussions during the development process to understand payer expectations and concerns clearly. Seeking expert advice on the methodologies payers use for the pricing and reimbursement process is also crucial to identify negotiation approaches and pricing and reimbursement requests that payers can accept. This proactive approach allows companies to address potential issues before the pricing and reimbursement process is initiated, where they become barriers to access and result in limited or no reimbursement outcomes.

Demonstrating real-world value forms another essential component of a strong negotiation strategy. Manufacturers can strengthen their position by providing compelling evidence from real-world studies or early access programs demonstrating the therapy's effectiveness and impact on patient quality of life. This real-world data often carries significant weight in negotiations, as it helps payers understand how the treatment performs in actual clinical practice rather than just in controlled trial conditions.

Flexibility in pricing strategies is equally essential for successful negotiations. Manufacturers should remain open to alternative pricing models that align with payer needs and policy frameworks. This might include innovative approaches such as outcomes-based agreements, risk-sharing arrangements, or other novel pricing structures that can help bridge gaps between manufacturer and payer perspectives.

A collaborative approach with both payers and the broader healthcare system rounds out an effective engagement and negotiation strategy. By working with payers from an early stage to find mutually beneficial solutions, manufacturers can help ensure patient access and system sustainability. This partnership-oriented approach often leads to more productive discussions and better outcomes than adversarial negotiating stances. For example, partnering with health system stakeholders to define what a service specification for a new therapy should be, will help the system prepare early while also reducing uncertainty for payers. The focus should remain on finding common ground that serves the healthcare system's sustainability needs and the shared goal of providing patients with access to innovative therapies.

Considerations for Psychedelics

Psychedelic therapies differ substantially from more conventional, compound-based chronic medications. They typically involve a limited number of drug administrations alongside psychological support, leading to a hybrid cost structure.

Manufacturers must clearly articulate a value proposition that justifies the higher upfront costs. This involves demonstrating long-term benefits such as sustained symptom relief and reduced reliance on ongoing medications. Value-based or performance-based pricing models can help align initial expenses with downstream savings.

Negotiations should also account for market-specific challenges. In mental health, where existing treatments may be generic and very low-cost, targeting reimbursement for treatment-resistant subgroups might be necessary. Early engagement with payers to address potential stigma and regulatory concerns is critical for smoothing the negotiation process.

Local Market Access and Uptake

After regulatory authorities have approved a new therapy and stakeholders have determined pricing and reimbursement terms, manufacturers must ensure that the treatment reaches patients effectively. Local market access and uptake involve a series of activities aimed at integrating the new therapy into healthcare systems, making it available to prescribers and patients, and ensuring that patients realise its benefits in real-world settings.

Inclusion in Formularies

One hurdle in market access is getting the new therapy included in a timely manner in national or insurer formularies and healthcare provider formularies, such as a hospital or hospital network. Formularies are official lists of medicines approved for prescription within a particular healthcare system or insurance plan. Inclusion in these lists is essential for the therapy to be prescribed and reimbursed.

To achieve formulary inclusion, manufacturers often need to:

• Provide Comprehensive Evidence: Supply all necessary clinical and economic data that demonstrate the therapy's value compared to existing alternatives.

• Meet Specific Criteria: Comply with any additional requirements set by formulary committees, which may include demonstrating cost-effectiveness within the context of the specific healthcare setting (at the national or regional level).

• Localisation of Data: Provision of an estimate of the patient population served by the formulary, likely dosing patterns and cost estimates.

• Engage with Stakeholders: Work closely with healthcare authorities, insurance companies, and other stakeholders to address concerns and facilitate acceptance.

Successful inclusion in formularies ensures that the healthcare system recognises the therapy and prescribers can access it for their patients.

Implementation in Clinical Practice

Once included in formularies, the next challenge is implementing the therapy in clinical practice. This involves several key aspects:

• Training Providers: Healthcare professionals must be educated about the new therapy, including its indications, administration procedures, potential side effects, and monitoring requirements. Training may involve workshops, seminars, online courses, and informational materials.

• Establishing Infrastructure: Some therapies require specific equipment, facilities, or support services. Ensuring that healthcare settings have the necessary infrastructure is crucial. This might include setting up dedicated treatment rooms, acquiring specialised equipment, or establishing protocols for handling and administering the therapy.

• Integrating into Clinical Pathways: The new therapy should be incorporated into clinical guidelines and treatment pathways to promote its appropriate use. Collaboration with professional societies and guideline committees can facilitate this integration.

• Supporting Adherence: Providing resources to help patients adhere to their treatment regimens, such as patient education materials, support programs, or mobile applications, can enhance the therapy's effectiveness.

Effective implementation ensures that healthcare professionals are confident in prescribing the therapy and that patients receive it safely and effectively.

Data collected from initial market access efforts, such as patient uptake rates and healthcare provider feedback, can inform iterative improvements in training programs, infrastructure investments, and treatment protocols.

Patient Access

Ensuring equitable patient access is a fundamental goal of European health systems. Various barriers, including geographical disparities, socioeconomic factors, and awareness levels, can hinder patients from receiving new therapies.[11]2 Healthcare providers and manufacturers must work within national frameworks and regulations that govern how treatments reach patients.

Getting treatments to patients across different geographies is challenging, especially for therapies that need special facilities or trained staff. This is usually solved in Europe by setting up a network of approved treatment centres and working with existing specialist hospitals. Some countries choose specific hospitals to become expert centres for certain treatments, which helps gather skilled staff and equipment in one place.

Healthcare staff need proper training approved by official medical bodies. Drug companies help with this by funding training programs or running educational courses. This training teaches healthcare workers how to choose the right patients, give treatments correctly, and monitor for safety issues.

Patient groups participate in HTA processes to review new treatments and determine what might stop patients from getting them. These groups also help create support programs for patients, working within European rules about what kind of help can be offered.[12]3

Challenges in Implementing New Therapies

Implementing new therapies in real-world settings presents several challenges. Healthcare facilities often face resource constraints and may lack the funding, staff, or equipment needed to adopt new therapies. There can also be resistance to change, as healthcare professionals may hesitate to alter established practices, especially if the new treatment requires significant workflow adjustments or additional training.

Adopting new therapies can be complicated and time-consuming due to regulatory and administrative hurdles. Additionally, ongoing monitoring of the therapy's effectiveness and safety in real-world use is essential but can be challenging to implement.

Facilitating Uptake Among Healthcare Professionals

Several supportive activities aid appropriate adoption and uptake among healthcare professionals. Manufacturers—or third-party organisations—must provide education and training by offering accessible and practical training opportunities to familiarise professionals with the new therapy. They must demonstrate value by sharing evidence of the therapy's benefits through clinical studies, real-world data, and case studies.

Manufacturers should simplify the implementation process by developing tools and resources that make it easier to incorporate the therapy into existing practices, such as treatment algorithms or electronic health record templates. Finally, they should engage key opinion leaders through collaboration with respected professionals who can advocate for the therapy and share their experiences to ensure successful implementation.

Considerations for Psychedelics

Introducing psychedelic therapies into clinical practice involves overcoming both practical and perceptual challenges. These treatments require dedicated treatment rooms equipped to provide safe, controlled environments.

Healthcare professionals must undergo comprehensive training that covers both the pharmacological and psychological aspects of psychedelic therapy. This training ensures clinicians can guide patients through the experience and manage any acute or long-term effects.

Overcoming historical stigma is another key hurdle. Manufacturers and clinical providers need to collaborate together to educate stakeholders—from prescribers to patient advocacy groups—about the robust evidence base and established safety protocols.

Local market access strategies should focus on piloting expert centres and gathering real-world data. This evidence will be crucial in refining training programmes, optimising treatment protocols, and demonstrating the therapy’s value to broader healthcare systems.

Key Stakeholders in European Psychedelic Medicine

The development and implementation of psychedelic therapies in Europe involves multiple stakeholder groups, each playing distinct roles in bringing these treatments to patients. These include drug developers, regulatory authorities, HTA bodies, insurance and reimbursement organisations, healthcare professionals, mental health facilities, medical societies, patient advocacy groups, and patients.

Drug developers lead the advancement of psychedelic therapies through clinical trials and regulatory processes. However, many major players currently focus on the U.S. market, with limited direct engagement in European regulatory and reimbursement pathways.

Key players include Compass Pathways, developing psilocybin treatment for TRD, Lykos Therapeutics (formerly MAPS PBC), advancing MDMA therapy for PTSD, Cybin, working on novel psychedelic compounds, Usona Institute, developing psilocybin therapy for major depressive disorder through a non-profit approach, and MindMed, researching various compounds including LSD and novel psychedelics for mental health conditions.

These companies collaborate with contract research organisations (CROs) and contract manufacturing organisations (CMOs) to conduct trials and produce therapies under strict quality controls.

Regulatory authorities oversee the approval and safety monitoring of psychedelic therapies. The EMA leads centralised marketing authorisation across the EU, while national agencies like Germany's BfArM, the UK's MHRA, and the Netherlands' CBG-MEB maintain oversight within their jurisdictions. These bodies evaluate safety, efficacy, and quality data while ensuring compliance with controlled substance regulations.

HTA bodies evaluate new therapies' clinical and economic value after regulatory approval. Organisations like Germany's IQWiG, England and Wales’ NICE, and the Netherlands' ZiN assess evidence to inform pricing and reimbursement decisions. HTA evaluationrs may consider not only clinical effectiveness but also cost-effectiveness and broader societal impact. HTA may be particularly challenging for psychedelic therapies given their unique delivery model combining drug administration with psychotherapy.

National HTAs

The Healthcare Institute of the Netherlands (Zorginstituut Nederland; ZiN) is the Dutch HTA body that evaluates new therapies' cost-effectiveness and societal impact. It determines whether treatments, including psychedelic therapies, are eligible for reimbursement under the Dutch universal healthcare system. ZiN evaluates drugs based on their clinical outcomes and broader healthcare implications, such as implementation challenges and the burden on healthcare providers. ZiN operates as an independent body under the Ministry of Health, Welfare, and Sport (Ministerie van Volksgezondheid, Welzijn en Sport; VWS).

The Institute for Quality and Efficiency in Healthcare (Institut für Qualität und Wirtschaftlichkeit im Gesundheitswesen; IQWiG) is Germany's primary HTA body. IQWiG assesses the clinical benefit of medicines, medical devices, and procedures, producing recommendations for the Federal Joint Committee (Gemeinsamer Bundesausschuss; G-BA), which makes final decisions on pricing and reimbursement. While IQWiG operates independently, its evaluations form the foundation for G-BA's policy decisions.

The State Institute for Drug Control (Státní ústav pro kontrolu léčiv; SÚKL) performs HTA to evaluate pharmaceuticals for pricing and reimbursement decisions. Considering cost-effectiveness and budget impact, SÚKL's process ensures transparency in introducing new medicinal products into clinical practice. As a smaller market, the Czech Republic often references HTA evaluations from larger EU Member States while adapting them to local healthcare needs and involving local stakeholders such as healthcare funds and clinical expert groups.

The National Institute for Health and Care Excellence (NICE) in England and Wales is the HTA body responsible for assessing new treatments' clinical and economic value for the National Health Service (NHS). NICE conducts its evaluations independently of MHRA, which approves medicines for marketing. NICE's assessments are highly detailed, often considering long-term cost-effectiveness and real-world implementation challenges, making its recommendations critical for the adoption of psychedelic therapies. NICE operates under the Department of Health and Social Care (DHSC) and collaborates with NHS bodies to integrate approved treatments into healthcare delivery. In Scotland, the Scottish Medicines Consortium (SMC) performs a similar role in assessing and providing advice about newly licensed medicines to NHS Scotland. In Northern Ireland, the Department of Health considers both NICE and SMC guidance when making local decisions about medicine availability.

Insurance and reimbursement stakeholders determine patient access through coverage decisions. In Europe, this primarily involves public health insurance systems and national health services, though private insurers play varying roles across countries. These organisations face the challenge of evaluating the complex cost structure of psychedelic therapies, which includes both medication and intensive therapeutic support.

Healthcare professionals represent a crucial link in delivering psychedelic therapies safely and effectively. This group includes psychiatrists, psychologists, specialised therapists, nurses, and pharmacists. Their expertise and willingness to adopt these novel treatments will significantly influence implementation success.

Mental health facilities and treatment centres provide the physical infrastructure and operational framework for delivering psychedelic therapies. These include hospitals, specialised clinics, and community mental health centres. They must adapt their facilities to accommodate the unique requirements of psychedelic sessions, including dedicated therapy rooms and extended monitoring capabilities. Private clinics like Clerkenwell Health in the UK are pioneering the integration of these treatments, while established healthcare institutions are beginning to develop protocols for future implementation.

Medical societies and professional associations shape standards and guidelines for clinical practice. Organisations like the Royal College of Psychiatrists in the UK and the Dutch Psychiatric Association (NVvP) influence how their members approach new therapies. These bodies play crucial roles in developing training requirements, ethical guidelines, and best practices for implementing psychedelic therapy. Their endorsement and guidance significantly impact the acceptance of these treatments within the medical community.

Patient advocacy groups and other multistakeholder alliances represent the interests of those who might benefit from psychedelic therapies. Organisations like the Psychedelic Access and Research European Alliance (PAREA) and Psychedelic Participant Advocacy Network (PsyPAN) advocate for patient access and safety. Mental health advocacy groups representing patients in health systems currently have limited engagement with psychedelic therapies but might become important allies when implemented.

Patients themselves, particularly those with treatment-resistant conditions, form the final and arguably the most important stakeholder group. They include individuals with depression, PTSD, addiction, and other mental health conditions who have not found adequate relief through conventional treatments. Their experiences, needs, and concerns directly influence the development and implementation of psychedelic therapies. Many patients actively seek information about these treatments, some participate in clinical trials, while others express concerns about safety, accessibility, and affordability.

Please refer to Appendix 14.3 for a detailed analysis of the stakeholder landscape. This appendix includes comprehensive profiles of key organisations within each stakeholder group and their specific concerns regarding the implementation of psychedelic therapies in European healthcare systems. It explores each stakeholder group's roles, interactions, and individual stakeholders, providing deeper insight into the ecosystem supporting the development and delivery of psychedelic therapies.