The FDA Drug Approval Process Explained
Let’s begin with an interesting proposal. Say you had half a billion dollars and had 2 choices: 1) Buy a pro sports team or 2) Pay for a drug to get through FDA approval fully and then own that drug’s rights – which would you go for? The typical person doesn’t understand that these two proposals cost the same.
Getting a drug through the FDA approval process is time consuming, risky, and expensive. Only 1 in 5 medications makes it through, and the cost is very very large. If the medication succeeds and the disease is a common one, like diabetes, the sales potential may be significant. So option 2 may provide much more revenue than a pro sports team ever could. Most sports franchises break even from year to year, but they do actually generate revenue and usually appreciate over time.
The step prior to animal testing includes either synthesizing the drug in a laboratory or purifying the drug from a natural source. Then common testing animals include rats or mice. This is termed preclinical phase. If success is achieved with animals, an Investigational New Drug (IND) application is submitted to the FDA. The application includes the protocol for the specifics of the human trials. The Food and Drug Administration may contest or approve the protocol, but if after 30 days no reply is received the manufacturer may commence human testing.
Clinical trials in the FDA occur in 3 phases. The first phase involves giving the drug to healthy individuals looking for safety and determining safe dosage. Once that phase is finished, Phase 2 entails administering the drug to people with the disease looking for side effect profiles. The numbers here are small.
Phase Three is when the real testing happens. Large numbers of patients who have the disease process in question are given the drug. All 3 phases on average takes 5 years. It may be longer if the drug is complicated or if the disease being tested is not very prominent so filling the requisite numbers may take a while. It can cost upwards of six hundred million to complete all of the phases. Only 20% of all drugs make it all the way through.
After successfully getting through Phase 3, the manufacturer submits a New Drug Application (NDA) to the FDA. This is comprehensive and contains all of the study results. On average it takes the FDA 15 months to review an NDA. If approved, the FDA will give the drug an “On-Label Indication.” The drug can be marketed for the given indication that is on the label, and if physicians deem it appropriate for other indications they may prescribe it “Off-Label”. An example of this would be gabapentin, with a brand name of Neurontin. Gabapentin was approved for epilepsy “on-label” but is commonly used “off-label” for pain management in patients with peripheral neuropathy.
A supplemental application needs to be submitted for an additional on-label indication for the drug. This supplemental paperwork and process with the FDA may cost anywhere from 10 to 40 million dollars.
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