United States / Analyst Insights
Industry Implications of Oregon’s Approval of Proposition 109

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by Dan Spitzer, Lead Analyst
Nov 30 2020

Oregon’s approval of Proposition 109 on November 3, 2020, might not have been a main headline compared with other major events, but its implications regarding the broader healthcare industry in the United States may prove otherwise. Oregonians passed two significant ballot measures, including Proposition 109, which legalized psilocybin therapy; and Proposition 110, which decriminalizing all drugs. These measures passed with a significant margin, enabling Oregon to become an example for a much different approach in controlling overall drug usage.

While the decriminalization of all drugs will likely have a large effect on the legal and criminal system in the United States (IBISWorld report 56121), the legalization of psilocybin therapy may have a more direct effect on the mental health pharmaceutical industry. IBISWorld estimates that the mental health drug market accounts for $25.0 billion in 2020 (32541a, 32541b). Patients who suffer from diseases such as depression and anxiety have a variety of therapeutic options at hand; however, these drugs are typically combined to treat the complexity of each individual’s disease. These drug cocktails are then generally prescribed for an extended period of time and adjusted to meet the patient’s needs. These drugs may be effective at managing the disease, but they typically coincide with a range of side effects, some of which can be as debilitating as the disease itself.

Psilocybin, or the active chemical in “magic mushrooms,” is a schedule 1 drug under the Drug Enforcement Agency (DEA). This designation has made medical research on the drug challenging, as researchers must meet stringent regulations. Despite these challenges, psilocybin treatment under controlled medical supervision has shown to be highly efficacious in the treatment of patients with major depressive disorder. A recent clinical trial conducted at Johns Hopkins found that patients who received psilocybin-assisted therapy demonstrated rapid and sustained antidepressant effects for several weeks after only one session. Still, a substantial amount of research is required to understand more about the mechanism in which the drug works.

Due to the drug’s affordability combined with the sustained therapeutic effects after only one treatment, it poses whether or not psilocybin can disrupt the multibillion-dollar market. Regardless, many eyes will likely be on Oregon and the data it produces as experts anticipate the state to attract many new patients to be treated with this newly available therapy.

 

Edited by Alexandria Valenti