Letter from the Founder
No one objects to Compass manufacturing and distributing psilocybin for medical uses, and certainly not me. On the other hand, Compass has used their resources to try to prevent anyone but themselves from manufacturing and distributing psilocybin. That’s the rub. The most misleading quote in the recent well written Vice article: “The question has been raised many times, whether we would stop researchers from doing research and [the answer is] absolutely not,” Wilde said. This statement avoids the key question and adds nothing to the discussion. Under the law, no one can stop researchers, there is no regulatory or patent legal mechanism for a commercial party to do that. The question is, do they intend to stop others from manufacturing and distributing psilocybin to the public? Based on Compass’s patent filings, it seems the answer is yes.
There are three levels to the Pharma trade. On the top level, regulations encourage the formation of capital pools to employ in the risky and expensive search for novel cures for debilitating illnesses. They encourage that by awarding exclusivity for a limited number of years to firms that succeed. No harm and no foul there. There is some tension around cost, and we don’t want to have to go to Canada or Mexico to get our meds. Hence the second level comes ten or so years later when that award for a novel invention runs out of monopoly protection, and generic firms compete to be the high-quality low-cost provider. Those firms can also be billion dollar publicly traded companies. Again, no harm and no foul. The third level is represented by for instance the Gates Foundation. In the 1950’s a vaccine for polio was invented. Polio was eradicated in the developed world. Fifty years later the Gates Foundation recognizes that there are still pockets of polio in Pakistan and Africa, and they begin giving the vaccine away free. Psilocybin should be somewhere between levels two and three – firms can aspire to be a generic provider, or like Usona give it away free.
But Compass is trying to be the exclusive provider. A generic supplier would require supply chains, manufacturing facilities, established distribution channels, in short assets Compass doesn’t have, and a competitive environment much more difficult to be successful in. I assume they realize investors’ rational unwillingness to fund such a strategy by an inexperienced beginner. But the point of patents is to reward making a new contribution. Trying to patent old IP (such as synthetic psilocybin to treat depression) is simply sand in the gears of pharmaceutical development of prescription medication. No one is upset that Big Pharma invested billions of dollars and found a vaccine for Covid and is now selling the vaccine. We are better not to allow ourselves to be baited into taking on the way the world works, as it mostly works well; let’s focus on the actual problem; which is just the questionable business plan of a small group of founders with little background in the business they are entering. They are what economists call a “negative marginal product” actor. Their nonparticipation would add value. Their participation subtracts it.
To that end they are not making good faith use of capitalism or pharma regulations, institutions that are largely for the public good. Instead, they are attempting to patent things they should know they did not invent. Patents are not a systemic fault of the system; bad patents that attempt to appropriate pre-existing knowledge from the public commons and then ransom it back to the human race are a misuse of that system. If someone decided to patent insulin, its current distributors would immediately file to invalidate the patent. Psilocybin has no such interested party at the moment. Compass’s strategy in that regard has similarity to the business of patent trolls, who patent existing unpatented inventions and then greenmail them back to their manufacturers.
The line of demarcation IMO is not profit vs non-profit. It’s never compromising the mission for personal gain. I know Compass says, “we have to do it this way” or “this is the way it is done in this industry”. But that’s not true. Observe MAPS which is a nonprofit. More generally, word search “successful nonprofit pharmaceutical companies”, or simply reflect on the American Cancer Society for examples. But having told their investors that they will achieve the right to be the exclusive psilocybin supplier to the world, and prohibit anyone else from supplying or distributing it, they cannot simply back down. So Compass is forced to try to do two incompatible things: try to achieve exclusivity on something they did not invent and try at the same time to appear like swell guys to the rest of the world. Hence there is the attempt to frame the conversation with questions like “what’s wrong with raising money as a for-profit” (perhaps nothing); instead of “what’s wrong with our patenting Albert Hoffman’s method of making psilocybin and known crystal forms of psilocybin and then using that patent to prohibit anyone else from manufacturing psilocybin for public sale” (perhaps something).
Quoted from Compass’s pitch sheet to investors:
Page 2, Introductory overview Executive Summary:
Pivotal studies following current PhIIb trial could grant data exclusivity for 10-11 years in EU, an additional US-based trial could grant 5-7.5 years of data exclusivity in US.
Page 8, Psilocybin presents significant scientific and commercial opportunity
Strong IP position: Never registered as new chemical entity (NCE) and strong protection from four independent sets of patent claims filed in UK/PCT*/US in Oct2018; market protection from generics for 8-11 years in EU, 5-7.5 years in US.
To date, the observations critical of Compass’s patents filed in patent offices by a nonprofit that I recently formed and funded, Freedom to Operate, have been largely successful, and have a likelihood of continuing to be. Compass has withdrawn, narrowed, and amended previous broad and specious claims to the work of Albert Hofmann, Roland Griffiths, Steve Ross, and others. Where the Patent Office has not agreed with FTO’s submissions, FTO is undertaking further research in order to establish what I know to be true: there can be no patent on psilocybin as a substance, nor on the known methods for making it or using it medically. There is an almost infinite number of novel contributions to be made to the future of psychedelic science. That there is a molecule named psilocybin and that it can be useful in treating depression is not one of them. It is already well documented. The latest patent filing written about in the Vice article continues that clumsy and disingenuous pattern. Freedom to Operate is named after a term of art of intellectual property law: do awards of patent exclusivity inhibit the public’s freedom to operate in a particular field. The money I have invested in FTO to fight Compass’s bad patents is an example of a “negative marginal product”: the time and cost defending psilocybin are not trivial and could better be employed developing psychedelic medicines.
While I am on the boards of both Heffter and Usona, I do not represent them here.
Founder and Director
Freedom to Operate