The hammer is what is used in auctions. The auctioneer - person conducting the auction - brings down his hammer, or 'gavel' - a special hammer or small mallet for this purpose - to signify that the price is now accepted, and the item is now sold. Hence the use of 'bringing down the hammer' to mean 'to close a deal, or to finalise something.'
When a deal is made it can be harsh but that is not the meaning of this expression, which I believe has been incorrectly explained on both Wictionary and Word Detective.
To bring down the hammer does Not mean 'to treat very harshly'! - it means 'to close a deal' - or to bring the final end to something, once and for all - for once 'the hammer comes down' - in a real auction - that's it! The deal is done, it's irrevocable - finito - no more discussion! End of story. No more offers - the item is sold.
That is why the auctioneer pauses at the end and asks 'are you done?' to the audience - inviting any more offers. If there are none, he/she gives a further warning that the deal is about to happen - 'going once - to the lady in the green hat!' (announcing the proposed buyer) - 'going twice - at 50,000 Euros!' (He announces the price she offered) and then lastly saying 'Gone! To the lady in the green hat!' As the auctioneer bangs the gavel down on the table loudly to show the item is sold.
That, is 'bringing the hammer down'. It means, to close or finalise a deal, or to finally end something.
I am guessing that in this era of Ebay, the original 'manual' form of auctions that take place in an auction hall, with real people, are perhaps less known! They do still exist, for art, such as Sotheby's, and Christies, and for property and more besides.
Here's a link explaining auctioneering terms:
I can't find 'to bring down the hammer on psychiatry's agenda' - please provide a link. It could mean 'to see an end to it, to conclude it, to make it draw to a close' - to - whatever 'psychiatry's agenda' - is, in that context.