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Legal and Ethical Considerations in Drug Development: Module 1 of 5

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Legal and Ethical Considerations in Drug Development: An Overview


The development of safe and effective medicines that prevent or treat diseases or injuries is one of the most significant of human endeavors. Scientific, religious, and social influences have contributed to the evolution of the processes involved in this field, from the ad hoc identification and administration of herbal preparations by stone-age practitioners through today’s complex methods of evidence-based medicine.

In our earliest days, medical treatment was informal and primarily based on individual observations and experiences. The Greek historian Herodotus expressed the opinion that every Babylonian was an amateur physician since it was the custom to lay the sick in the street so that anyone passing by might offer advice [i]. Certain types of vegetation were found, by trial and error, to possess medicinal value and would be provided to patients by family members or by tribal “medicine men”- often supplemented by charms or magical incantations. As time went on, scientists discovered that the effectiveness of herbal treatments could be traced to specific components of these plants and that they could isolate or synthesize these active agents… and the pharmaceutical industry was born.

However, along with their remarkable impacts on healthcare, there arose problems with the use of these treatments that illustrated that medicinal products are very different from other commodities. While a consumer might be able to determine for himself whether a tool or a household appliance can be used safely and effectively for its intended purpose, he cannot typically do so for a drug. Thus, it became clear that the development and production of pharmaceutical products require careful handling by specially trained professionals and oversight by qualified regulators. Over the centuries, controls have been devised for the manufacture and testing of pharmaceuticals and other healthcare-related products and laws have been put in place to standardize the application of these controls. We now have established agencies that regulate the development, manufacture, testing, distribution, marketing, prescribing, labeling and dispensing of drugs and medical devices.

In this course, we will take a brief look at some of the legal and ethical concerns that relate to certain aspects of Drug Development including a few that have been discussed in the news in recent years.

In our first module, we will look at some general aspects of food and drug laws that affect the various stages of development with a focus on one of the newest additions to the compendium of US regulations governing the approval of medicinal products, the 21st Century Cures Act.

Testing Drugs in Animals and Humans

Before a new drug can be brought to the market, it must pass through a series of stages of development and approval. It might be isolated and purified from a plant or animal source or synthesized in a laboratory from different chemical compounds, or it could be an existing drug that is being reformulated, such as a medicine being changed from a form that is given via injection into a pill. Regardless of its origins, it must go through a defined series of steps to generate the data necessary to demonstrate that it can be consistently manufactured to an acceptable level of quality and that it will be safe and effective for its intended use. At each stage, there are controls in place to ensure that the data are reproducibly generated and that the safety of everyone involved- manufacturers, handlers, testing subject, be they animals or humans- is protected. In the US, all phases of development are controlled under the oversight of the Food and Drug Administration (FDA).

Marketing approval for a new drug (or new formulation of an existing drug), is based primarily on data that is generated in animals and humans.

In the pre-clinical (sometimes referred to as “non-clinical”) phase, a drug candidate is evaluated for safety and for indicators of efficacy in appropriate animal models. The rules regulating the use of animals are summarized in the FDA’s Good Laboratory Practices for Nonclinical Laboratory Studies (21CFR Part 58)[ii]. All animal research sites are supervised at the local level by members of an Institutional Animal Care and Use Committee (IACUC) who must ensure that housing conditions for the animals, hiring, training, and oversight of staff, and the designs and implementation of testing protocols fulfill the requirements of relevant federal laws, regulations, and polices. The IACUC may suspend activities involving animals if it determines that violations of animal welfare regulations have occurred. Their mandate is broad and may include actions such as preventing the start of a trial if they do not approve of the protocol, halting a trial that is in progress if there are concerns about the way it is being conducted, requiring retraining or replacement of staff or even closing a facility.

Once the pre-clinical testing has provided sufficient data to obtain FDA approval for an Investigational New Drug application, the Clinical Phase can begin. The regulation of drug testing in humans is subject to controls enumerated in the Code of Federal Regulations, 21CFR 50, “Protection of Human Subjects”, and the International Conference on Harmonization, Good Clinical Practices. These comprehensive documents define the requirements and standards for every aspect of human trial conduct, analysis, and reporting. These regulations are enforced by Institutional Review Boards (also known as Institutional Ethics Committees). An IRB may, like an IACUC, refuse to allow a project to be conducted or terminate an ongoing research project if evidence is found of noncompliance. Regulations also require the creation of other types of groups, such as Data Management Committees or Data and Safety Monitoring Boards, that are composed of independent experts who may review and analyze the results of ongoing trials to ensure that the trial is being conducted appropriately and that the participants’ safety is protected. These groups prepare reports that are shared with FDA.  If their findings are serious, either due to the effects of the treatment, or because of lack of compliance with the protocol or regulations, the committee may recommend modifying or even discontinuing a trial.

Testing drugs is a very expensive and lengthy process. The ability of an oversight committee to interrupt or even terminate a project is a powerful deterrent to sponsors who may be tempted to cut corners either in the design or conduct of their trials.

Government Regulation of Marketed Products

Once a drug has obtained marketing approval, the manufacture and distribution of the product are monitored by various regulatory bodies. In the US, creation and enforcement of health-related regulations are under the supervision of the Food and Drug Administration (FDA) and similar governmental agencies. Comparable entities exist locally in many countries, and international agencies- including the European Medicines Agency (EMA) the World Health Organization (WHO)- work to create and enforce safeguards and penalties to protect patients everywhere against the sale or distribution of unsafe, substandard, or counterfeit drugs.

Substandard medicines are “pharmaceutical products that do not meet their quality standards and specifications”[iii]. Quality standards include criteria for identity, potency, and purity that are necessary to release a drug for commercial use. A drug that fails to meet these standards may be ineffective and/or unsafe. This can occur inadvertently-as a result of negligence, human error, or inadequate resources- or as a result of intentional acts of counterfeiting.

Counterfeit drugs are those that are substandard due to intentionally fraudulent mislabeling regarding their identity or source.  They may also be ineffective or unsafe as they may contain the wrong ingredients, may totally lack active ingredients, or may contain incorrect doses of active ingredients. They might contain the correct ingredients but are produced by an unapproved manufacturer who uses a fake label. These versions of the drug will lack the quality controls that would typically be provided by the approved manufacturer.[iv]

Evolution of FDA regulations: The 21st Century Cures Act

FDA’s responsibilities are executed through laws “requiring that drugs and devices be safe and effective for their intended uses and that food, drugs, and devices be accurately labeled and handled in ways that prevent them from becoming contaminated”[v]. The first regulation to grant authority to FDA to oversee the safety of food, drugs, and cosmetics was the fittingly named Federal Food, Drug, and Cosmetic Act (FFDCA) of 1938. In subsequent decades, numerous amendments have expanded the purview of the FDA and the controls it puts on drug researchers, manufacturers, distributors, and users of pharmaceuticals and medical devices.

In December, 2016, the 21st Century Cures Act was passed and signed into law with the intent “to accelerate the discovery, development, and delivery of 21st century cures and for other purposes”[vi]. It contains provisions for funding research and simplifying requirements and processes for developing new drugs and medical devices as well as addressing the opioid crisis, improving delivery of mental health services, and developing and regulating healthcare-related IT systems[vii]. It also includes measures relating to data use and clinical metrics, emerging technologies, and expediting development and approval of medical breakthroughs.

The following is a sampling of some of the key provisions of the 21st Century Cures Act (“the Act”)[viii] that pertain to drug development:

1.    Expedited drug approval process

The Act requires FDA to provide guidelines on how and under what circumstances certain types of data should be collected and used to inform regulatory decisions. This applies, in particular, when determining whether to grant permission for previously-approved drugs or medical devices to be marketed for new indications. Examples include Real World Evidence and Data Summaries. These types of data are collected from sources other than randomized, controlled clinical trials, and may include, for example, feedback from patients or insurance claims concerning drugs administered in home, hospital or office settings.

2.    Patient-Focused Drug Development
The Act allows, in certain cases, the use of data that are intended to provide information about patients’ experiences with a disease or condition, including

a.    the impact of such disease or condition, or a related therapy, on patients’ lives; or

b.    patient preferences with respect to the treatment of such disease or condition.

3.    Breakthrough Medical Devices
The Act allows for expedited development and review of devices that represent breakthrough technologies for life threatening or irreversibly debilitating diseases or conditions. A breakthrough device can be defined as one that “may have substantial improvement on at least one clinically significant endpoint over available therapy”[ix].

4.    Patient Access to Regenerative Medicine
The Act allows for a simplified review process for drugs that are based on cell therapy, therapeutic tissue engineering, or combinations of such products that have preliminary clinical evidence that the drug has the potential to address unmet needs. The Act provides guidance on improving the efficiency of developing these drugs and enhancing the exchange of information among FDA, researchers, and developers.

The 21st Century Cures Act has been lauded by pharmaceutical companies, researchers, and some patient advocates as a way to accelerate the approval of existing, approved drugs for new indications, to ease the process of introducing new medical technologies, and to gain a greater understanding of the perspectives of the patient. This new law recognizes that patients are in a unique position to provide essential insights into what it is like to live with and fight their disease. It acknowledges that a patient with a life-threatening illness may prefer to accept certain side effects (even some that may have been considered serious) from a new breakthrough therapy if the benefits of the treatment could be valuable to that patient. However, some groups- including the FDA itself- are concerned that this could endanger public health by weakening FDA standards for safety and efficacy of new drugs and devices. By tolerating a more liberal safety profile, and by reducing the requirements for showing clinical efficacy, there is the potential for drugs to be approved based on early data only to later be proved ineffective or unsafe. There are also concerns about the ability of FDA to perform the complex statistical analyses necessary to evaluate real world data. Finally, there is fear that this broadening of approval criteria could weaken protections against product liability and threaten the rights of patients to institute medical malpractice claims.


The regulation of the pharmaceutical industry by the FDA and similar organizations in other countries provides a framework for protecting the health and safety of patients worldwide. However, as is the case for any rules or guidelines, there is the potential for violations or misinterpretations- either in error or deliberately- that can lead to serious consequences. In the case of medical products, these may be life-threatening.

In the following modules in this course, we will consider some of the scientific and commercial features inherent in the pharmaceutical industry that may present legal and/or ethical challenges and the costs of failure to overcome some of those challenges to individuals and to society. In Module 2, we will begin our discussion of improper pharmaceutical promotion and marketing.