I've known a lot of people who are constantly talking to themselves, I worked with one guy who carried on some pretty bizarre and lengthy discourses. Has this guy been like this the whole time you've known him, or is this a sudden change? If it's something new you are right to be concerned. More than once I've seen severe mental illness come over people extremely rapidly, and seemingly out of the blue, even if in hindsight one could see some underlying causes.
Good luck to you with this. If it's really mental illness that is the worst.
I seriously doubt that he is " on " anything " . The change has been gradual , starting about 6-8 months ago . He did have a very stressful first year here last year which may have contributed to the current problem .