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Health Law: How a New Drug is Approved, Part 2

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This is part 2. Part 1 is here.

How a New Drug is Approved - Part 2

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 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)

In our previous presentation, we examined the early stages of drug development, from preclinical evaluation in animals through the relatively small Phases I and II trials in humans. In this presentation, we will look at the activities in Phase III and beyond that are necessary to bring a new drug to the market.  

Clinical Phase III

Phase III is often referred to as the “pivotal” phase of testing a potential new drug because it is intended to provide the most significant safety and efficacy information to support a drug marketing approval. These trials are conducted in patients that belong to the population for which the therapy is intended. Large numbers, typically in the thousands of patients, are required unless the target disease is rare (and, therefore, larger numbers of potential patients cannot be found) or FDA gives permission to use a smaller sample size in order to complete the trial more rapidly. The trial is carefully designed to provide the maximum possible amount of meaningful data to support the claims that the sponsor wants to make for the drug. The drug itself is manufactured using materials and processes that are the same as those that are going to be used in the final product that will be brought to the market. The sponsor’s representatives may request that the FDA review the protocol with them before it is finalized. FDA experts will provide feedback on the design and may give their opinions on whether a positive outcome might be sufficient to obtain approval (although this is not binding and the data, even if positive, might not be considered adequate to support approval). Since a Phase III trial can costs in the tens of millions of dollars and take years to complete, a sponsor will gratefully accept whatever help they can get to increase the likelihood that they are doing it right. Most drug candidates will be tested in at least two Phase III trials.

New Drug Application

After the Phase III program is concluded, the findings from all investigations, including preclinical and Phase I-III trials, are evaluated. If the sponsor is convinced that the safety and efficacy of the drug are adequately demonstrated, an application may be made to obtain approval to market the drug in selected countries.

The sponsor will collect all of the information that it has on the drug candidate into a massive dossier, called the New Drug Application, or NDA. In addition to final reports on the preclinical and clinical studies and analysis of the safety and efficacy data, the NDA will include “Chemistry, Manufacturing and Controls” (CMC) information: this includes the chemical structure, raw materials, manufacturing process, and tests that will be performed to demonstrate the quality and stability of the form of the drug that will be sold to patients. It will also contain a “sample label” that instructs the patient how to take the drug and describes possible side effects. This becomes part of the “package insert” that is found inside the commercial drug package. The final submission will be thousands of pages long and multiple copies are required. While this document was historically delivered to FDA as a literal truckload of paper copies, as of May, 2017, the agency only accepts NDA submissions in a standard electronic format. This makes it far simpler for the sponsor to send it to the agency and for the reviewers to do their jobs. After a 60-day review period, FDA decides whether the NDA is suitable for review (that is, all sections are there, the format is as required, all text and figures are legible, links work, etc.) after which it is formally filed. A review team is assigned, and the review process begins. At this stage, FDA will also inspect facilities at which the sponsor intends to manufacture the drug.

By law, FDA is required to conduct its review of the NDA within 10 months after filing it and the sponsor is given an expected date for completion (referred to as the PDUFA date). Some drugs may be prioritized and reviewed in 6 months if they are considered significant medical breakthroughs or they offer treatment where no other options exist. FDA makes every effort to meet the PDUFA deadline, but the clock may be stopped if FDA needs additional time to review data or the sponsor requests that amendments be made. Sometimes, the FDA review team will request input from an independent Advisory Committee- composed of scientific experts as well as representatives of the public such as patients- who may make comments regarding various aspects of the NDA and recommendations for or against approval. The final decision, however, is made by the FDA. If the FDA does not consider the data sufficiently compelling to approve the drug, it may issue a “complete response letter” either rejecting the application outright or, more commonly, describing outstanding questions and requests for any additional data that it would require to continue the review and, perhaps, approve the drug. In the best case, however, FDA will notify the sponsor that the drug has been approved in the form and for the indications and patient populations described in the NDA and it may now be manufactured, promoted, and sold in the US. While FDA approval indicates that the agency considers the drug, as described in the NDA, to be safe and effective, this is not the end of the story.

Phase 4/Post-marketing surveillance

Phase I-III clinical trials provide evidence of safety and efficacy in thousands of patients. However, once a drug is on the market, it may be administered to many millions of patients and under circumstances that were not envisioned during testing. In the course of real-world use, side effects may be observed that were not seen in the clinical trials, and the drug may not be as effective in treating the target indication in actual populations. For this reason, the sponsor will continue to collect information about the drug for many years after it goes on the market and must share this with FDA and other regulatory agencies throughout the world where the drug is used. If evidence becomes available that shows that the drug is either unsafe or fails to provide a therapeutic benefit, FDA may require that the drug in circulation be recalled and may withdraw approval entirely.

Off-label use

Physicians, and, at times, patients themselves, may choose to use a drug “off-label”: that is, for a disease or condition, in a dosage, in an age group, or by a route of administration differing from those described on its label and for which it received FDA approval. While companies are forbidden to promote a drug for an “off-label” use, administering a pharmaceutical in an unapproved manner is legal unless it violates ethical guidelines or safety regulations. While off-label use is widespread, and often reveals significant and unanticipated therapeutic benefits, the prescribing physician or self-medicating patient does so at their own risk and should carefully investigate known safety and efficacy characteristics of the drug before experimenting with it. Successful off-label use may encourage the drug sponsor to seek FDA approval for this new use and it may decide to conduct controlled clinical trials under these novel conditions to support submission of a “supplemental NDA”.


New drug candidates must successfully undergo several phases of testing as dictated by the relevant regulatory agencies. Although this is typically a long, expensive, and demanding process, the FDA will work with sponsors to simplify and accelerate the route to approval when it is in the best interests of the patients. For example, a new formulation or a generic form of an already-approved drug might be permitted to skip Phase 1 and only have to go through some minimal Phase 2 or Phase 3 testing to support a supplemental NDA. Research organizations, constrained by limited resources, may be reluctant to invest the extraordinary amount of time and money needed to develop a drug for a small patient population that is likely to generate limited revenues.  Therefore, the requirements may be modified in the cases of drugs for orphan indications or for serious, life-threatening conditions for which the proposed new drug is thought to provide a therapeutic benefit over existing therapies. However, the agency will continue to monitor the drug post-approval and will respond quickly if the treatment fails to live up to its original promises of safety or efficacy. The FDA exists to ensure, as far as possible, that the medicines provided to patients in the U.S. adhere to the highest standards of safety and effectiveness.