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Health Law: How a New Drug is Approved, Part 1

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This is Part 1. Part 2 is here.

How a New Drug is Approved - Part 1

According to current estimates, developing and approving a new drug can take 10 or more years and the cost can be north of $2.5 billion[1].  These statistics will vary depending on many factors including the chemical structure of the drug, how it is manufactured, its medical uses, the complexity of the clinical trials that will be required, and marketing considerations such as the availability of alternative treatments. However, there are certain scientific and regulatory requirements that any new drug candidate must satisfy to bring it from early development to market approval.

The US Food and Drug Administration, commonly known as the FDA, is responsible for ensuring the safety and effectiveness of all pharmaceuticals produced, sold, or used in the United States. This presentation will focus on the steps involved in the approval of new drugs, although the model is similar for medical devices and other entities that fall under the purview of the FDA.  

Legislation and FDA Guidances

There are two types of rules that govern the activities of the FDA: the laws that define the agency’s mandate, and “guidances” that describe the techniques FDA uses or recommends to others to successfully traverse the drug development process.

Some of the key pieces of legislation that defined the role and authority of the FDA are[2]:

·         The Federal Food, Drug, and Cosmetic Act of 1938 which was passed after a legally marketed elixir killed 107 people, including many children. The FD&C Act completely overhauled the public health system. Among other provisions, the law authorized the FDA to demand evidence of safety for new drugs, issue standards for food, and conduct factory inspections.

·                 The Kefauver-Harris Amendments of 1962, which were inspired by the thalidomide tragedy in Europe, strengthened the rules for drug safety and required manufacturers to prove their drugs' effectiveness.

·                 The Medical Device Amendments of 1976 followed a U.S. Senate finding that faulty medical devices had caused 10,000 injuries, including 731 deaths. The law applied safety and effectiveness safeguards to new devices.


FDA issues regulations to implement its statutory authority. These create binding obligations and have the rule of law. Guidance documents are descriptions of FDA’s current thinking on a topic. They are not binding, but are a valuable resource for those wishing to understand the FDA perspective on the best ways to comply with relevant regulations. Alternative practices that adhere to the regulations are acceptable, but following the FDA guidances is the best way to improve your chances of successfully completing the required activities and securing FDA approval. According to the FDA website, there are currently over 4000 guidance documents that pertain to virtually every interaction one would have with the agency, including everything from Advertising to User Fees (that are paid by applicants to defray costs associated with FDA document reviews).

Drug Development and Approval Process

The process for development and approval of a new drug consists of the following stages:

·         Pre-clinical testing and lead compound identification

·         Investigational New Drug (IND) application

·         Clinical

o   Phase 1

o   Phase 2

o   Phase 3

·         New Drug Application (NDA) filing and approval

·         Post-marketing surveillance (also referred to as Phase 4)

We will now take a closer look at each of these stages.

Pre-clinical Development

In the course of what is known as the “Discovery Phase” of Drug Development, laboratory or literature investigations may suggest to a researcher that a particular chemical compound could demonstrate biological activity in the treatment of a particular type of disease. This may be due to its structural similarity to other, proven drugs, and the researcher may propose modifications to make it more effective. Alternatively, the new compound may have a structure that could, theoretically, allow it to interact with an organ in the human body that has been affected by disease, or with a pathogen, such as a virus or bacterium, to prevent it from infecting a person. This compound, referred to as a New Chemical Entity, or NCE, will then go through a range of experiments that investigate this potential therapeutic effect, while evaluating whether it might cause harm to the patient. Using a variety of “Toxicology” (or, more optimistically, “safety”) tests, the investigator will monitor the reactions in animals to varying amounts of the NCE. The designs for these tests are first submitted to a review board (known as the Institutional Animal Care and Use Committee, or IACUC) for the laboratory at which they would be performed.

The IACUC will only allow the testing to proceed if it is deemed to be truly necessary to provide the information that the sponsor needs, and if it will be conducted in an ethical manner, under humane conditions and in the smallest reasonable number of animals. Toxicology testing must typically be conducted in at least two types of animals: small animals, such as mice or rats, and larger animals such as dogs or primates. The drug is given in an escalating range of doses until it reaches a dose at which some animals die. The dose just below this lethal dose is referred to as the Maximum Tolerated Dose, or MTD. This procedure enables the investigator to begin to determine how high a dose could be safely given to humans- typically a fraction of the MTD in animals. Additional safety studies will be performed to examine the potential for the NCE to cause cancer or genetic abnormalities in animals. There will also be some experiments that can indicate the amount of the drug that is absorbed by the animal and how rapidly it is cleared from the body. The Preclinical Phase will take several years depending on the types of studies that are needed. A large percentage of potential drug candidates are eliminated due to the findings in these tests.

The Maximum Tolerated Dose and its relationship to the doses that are expected to be therapeutic in humans will be investigated in Phase 1 clinical trials, but only after the sponsor convinces the FDA that the potential benefits of the drug outweigh the risks.

Investigational New Drug (IND) application

About one in a thousand compounds that are tested in the laboratory progress to the point of submitting an IND, or Investigational New Drug application. This document contains all of the information gathered in preclinical tests, a description of the proposed tests in humans, and preliminary plans for how the NCE will be manufactured and tested for purity and potency. The sponsor waits for 30 days after the IND is submitted and, unless FDA responds to the contrary (in a classic instance of “no news is good news”), it may begin the “clinical” phase in which the drug will be tested for the first time in humans. If FDA has any concerns during the 30-day review period, it will notify the sponsor that the program is on “clinical hold” until these issues are resolved.

Clinical Phase I

The designs and procedures used in clinical trials must adhere to the principles in the Declaration of Helsinki which set the ethical guidelines for human experimentation. Some of the rules in this declaration include the requirement for pre-approval of research protocols by Institutional Review Boards, the need to base the design of human studies on the results of investigations in animals, and the concept of informed consent. Informed consent requires that subjects in a clinical study must be volunteers who understand the risks associated with receiving the drug and undergoing the testing.

This first stage of clinical testing consists of “dose finding” or “dose ranging” studies aimed at determining the drug doses that will be safe in humans. The test subjects are typically healthy adults. In certain instances, however, some Phase 1 subjects may actually suffer from the disease or condition for which the drug would be used, and the dose ranging studies may also provide insight into the amount of drug that would be needed to be therapeutically effective. These are small studies, usually using less than a few dozen subjects, and take only a few days. The sponsor will analyze the data and determine whether the drug candidate is ready to proceed to the next stage of testing, or if additional Phase 1 or even preclinical tests are needed. This phase typically takes about one year.

Clinical Phase II

Participants in Phase 2 trials are referred to as “patients”, rather than “subjects”, because they have the disease or condition targeted by the drug under investigation. Trials in this phase continue to optimize dosages and begin to examine the effectiveness of the drug. Here, again, the studies are small (usually 100-300 patients) and of relatively short duration. Measurements are taken, within hours or days of dosing, of the amount of the drug that is absorbed in the patient’s blood or of the concentration of some chemical that is indicative of the disease (such as glucose or the protein HbA1C in body fluids of a patient with Diabetes). The second phase of clinical testing and data analysis generally takes about 2 years.

During the course of the development of a new drug, it may be necessary to perform additional preclinical testing to further explore the characteristics of the NCE. More Phase 2 studies could also be conducted to further examine dosages and other parameters in small populations. In the next presentation in this series, we will see what happens when the sponsor believes that enough safety and efficacy information is available to support administering the drug to much larger groups of patients and to justify the potential expenditure of millions of dollars and years of effort in Phase III clinical testing and beyond.