Drug Development Process : A review

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Manthan D. Janodia

Manthan D. Janodia

Drug development is a precarious pharmaceutical business with risks outweighing benefits. Though risky, many major pharmaceutical companies are involved in drug development process, as it is essential for the survival of pharmaceutical companies and for the betterment of people with newer therapy for treating diseases that afflict millions of people worldwide.

Thus, Leveraging new drug development and registration programs internationally has become a survival imperative for today's pharma industry[1]. Billions of dollars are invested every year by pharma companies worldwide to develop new drugs.

Success Rate Of Developing A New Drug

Not every compound that is tested in lab is marketed. Before a drug is marketed, it has to undergo several stages of development. A company has to screen through many thousand compounds that show promising result before it could take on the task of development of a promising compound. This eventually increases the cost of development of drug as many compounds that are tested are discarded in the preliminary stages of development. For every 1,000 compounds that are identified by a company, only about 30 show promising results. And for every 30 compounds that show promise, three get past the first round of clinical trials and finally, only one hit the market. Sometimes compounds are to be dropped off during regulatory approval process. Thus, to introduce one new drug, a company needs to start with many thousands of compounds [2].

Time Required To Develop A New Drug:

It is very known that drug development is very sluggish process which is scrutinized at every stage of development by the USFDA in the US and respective regulatory agencies in various countries. It may take anywhere between 12 to 15 years to develop a new drug according to PhRMA (Pharmaceutical Research and Manufacturers of America - pharma industry trade group of America). This slowness of drug development is attributed to numerous steps a drug has to go through before it is ultimately launched in the market. Drug development includes about six-and-a-half years of discovery, preclinical testing, and toxicity studies; one-and-a-half years in Phase I trials to assess safety in healthy volunteers; then two years in Phase II trials with a few hundred patients to evaluate the drug's effectiveness and side effects. The development process continues with three-and-a-half years in Phase III trials involving thousands of patients and scores of research centers to confirm effectiveness and evaluate long-term effects, then one-and-a-half years of Food & Drug Administration review, where all the clinical trial data are presented. Even after the drug is approved, it may undergo further Phase IV testing so more safety and efficacy data can be collected[3]. The drug development stages explained above can be shown in figure 1.

Cost Of Developing New Drug:

Drug development in addition to taking longer time for marketing approval (12 to 15 years as discussed above) requires mammoth investment from pharmaceutical companies. It is estimated, according to various sources, that cost of developing a single new drug including commercialization varies from US $ 800 million to US $ 1.7 billion[3,4]. Thus, in addition to increasing approval time for a single drug, cost of development is also escalating. This is partly attributed to scrutiny by regulatory agencies and lengthening time for review of applications. It is quite possible that during the stage of development, a drug under review may not make to next stage due to reasons like quality, safety, toxicity or efficacy and thereby increasing the cost of development. The money invested by the company for such unsuccessful molecules is sunk cost and cannot be recovered.


Fig.1, Source: USFDA website

Various Stages Of Development Of A New Drug:

Preclinical stage:

This stage comprises of study on animals to find out various parameters for a drug under development. During preclinical drug development, a sponsor evaluates the drug's toxic and pharmacological effects through in vitro and in vivo laboratory animal testing. Genotoxicity screening is performed, as well as investigations on drug absorption and metabolism, the toxicity of the drug's metabolites, and the speed with which the drug and its metabolites are excreted from the body. At the preclinical stage, the FDA will generally ask, at a minimum, that sponsors: (1) develop a pharmacological profile of the drug; (2) determine the acute toxicity of the drug in at least two species of animals, and (3) conduct short-term toxicity studies ranging from 2 weeks to 3 months, depending on the proposed duration of use of the substance in the proposed clinical studies[5].

Clinical Stages:

Phase I: Phase I studies are carried out in healthy volunteers, which are small in number – usually 20 to 100. The purpose of phase I studies is to identify metabolic and pharmacological effects of drug in humans and to determine the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness. During Phase 1, sufficient information about the drug's pharmacokinetics and pharmacological effects is required. The purpose of phase I studies is to mainly determine safety profile.

Phase II: Phase 2 includes the early controlled clinical studies conducted to obtain some preliminary data on the effectiveness of the drug for a particular indication or indications in patients with the disease or condition. This phase of testing also helps determine the common short-term side effects and risks associated with the drug. Phase 2 studies are typically well-controlled, closely monitored, and conducted in a relatively small number of patients, usually involving several hundred people.

Phase III: Phase 3 studies are expanded controlled and uncontrolled trials. They are performed after preliminary evidence suggesting effectiveness of the drug has been obtained in Phase 2, and are intended to gather the additional information about effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of the drug. Phase 3 studies also provide an adequate basis for extrapolating the results to the general population and transmitting that information in the physician labeling. Phase 3 studies usually include several hundred to several thousand people [6].

Phase IV: In addition to these three phases, Phase IV, also known as Post Marketing Surveillance is also carried out once the drug is approved and marketed. The aim of Phase IV is to find out safety profile in large patient pool across the world and to establish the safety profile of the drug. It is estimated that success rate of drugs making to market from lab is very less. One drug, from among the thousands tested, makes it to the market.

Various stages of preclinical and clinical testing with purpose and success rate at each stage can be shown in table 1.

Testing in Humans


Number of Patients



Percent of Drugs Successfully Tested*

Phase 1


Several months

Mainly safety

70 percent

Phase 2

Up to several hundred

Several months to 2 years

Some short-term safety but mainly effectiveness

33 percent

Phase 3

Several hundred to several thousand

1-4 years

Safety, dosage, effectiveness

25-30 percent

* For example, of 100 drugs for which investigational new drug applications are submitted to FDA, about 70 will successfully complete phase 1 trials and go on to phase 2; about 33 of the original 100 will complete phase 2 and go to phase 3; and 25 to 30 of the original 100 will clear phase 3 (and, on average, about 20 of the original 100 will ultimately be approved for marketing).

Table 1: Various stages of Preclinical and Clinical testing with purpose and success rate

Source: FDA website

Getting Regulatory Approval At Each Stage Of Drug Development:

Investigational New Drug (IND):

Once the compound is tested in animals (preclinical testing), a company files IND with FDA for getting approval for testing drug in humans. The IND shows results of previous experiments, how, where and by whom the new studies will be conducted; the chemical structure of the compound; how it is thought to work in the body; any toxic effects found in the animal studies; and how the compound is manufactured. In addition, the IND must be reviewed and approved by the Institutional Review Board where the studies are to be conducted, and progress reports on clinical trials is required to be submitted to FDA periodically[7].

IND application contains information in three broad areas [8]:

1.Animal Pharmacology and Toxicology Studies

2.Manufacturing Information of drug including manufacturer, composition, stability and controls

3.Clinical Protocols and Investigator Information

New Drug Application (NDA):

The NDA application is the vehicle through which drug sponsors formally propose that the FDA approve a new pharmaceutical for sale and marketing in the U.S. The goals of the NDA are to provide enough information to permit FDA reviewer to reach the following key decisions:

·Whether the drug is safe and effective in its proposed use(s), and whether the benefits of the drug outweigh the risks.

·Whether the drug's proposed labeling (package insert) is appropriate, and what it should contain.

·Whether the methods used in manufacturing the drug and the controls used to maintain the drug's quality are adequate to preserve the drug's identity, strength, quality, and purity. [9]

The documentation required in an NDA is supposed to tell the drug's whole story, including what happened during the clinical tests. After completion of all phases of clinical trials as mentioned above, a company files NDA with FDA if the data demonstrates safety and efficacy of the compound. NDA mentions all the relevant scientific information pertaining to drug that is gathered during the investigation period. As NDA runs in several thousands pages, FDA requires time to review each and every detail of the information submitted[7,9]. The relation of each stage of drug development and getting regulatory approval at each stage is explained in table 2.


Drug development is a costly and risky affair and involves lot of money and time. Many compounds that are screened initially fail to make it to next stage of development. If FDA decides, after review of applications filed at each stage of drug development, that the benefits of drug outweigh the risks associated with it, a drug is given marketing approval. But the road to success is painstaking and companies have to take the risk associated with drug development.

Clinical Trials


Preclinical Testing

File IND at FDA

Phase I

Phase II

Phase III

File NDA at FDA



Phase IV







12 Total

Additional Post marketing testing required by FDA

Test Population

Laboratory and animal studies

20 to 80 healthy volunteers

100 to 300 patient volunteers

1000 to 3000 patient volunteers

Review process / Approval



Assess safety and biological activity

Determine safety and dosage

Evaluate effectiveness, look for side effects

Verify effectiveness, monitor adverse reactions from long-term use

Success Rate

5,000 compounds evaluated

5 enter trials

1 approved

Table 2: Source: http:// www.allp.com/drug_dev.htm


  1. http://www.mindbranch.com/products/R198-014 (accessed 30-09-2005)
  2. http://www.businessworldindia.com/ (accessed 15-06-06)
  3. http://www.pubs.acs.org/cen/coverstory/8004/8004pharmaceuticals.html (accessed 30-08-2005)
  4. http://www.pharmaquality.com/Cover%20Story5.htm (accessed 11-05-06)
  5. CDER handbook, published by Department of Health and Human Services, Food and Drug Administration, pg. 5, accessed at  http://www.fda.gov/cder/handbook/index.htm (accessed 24-11-2005)
  6. Ibid, pg 8-9
  7. http://www.allp.com/drug_dev.htm (accessed 15-06-06)
  8. http://www.fda.gov/cder/regulatory/applications/ind_page_1.htm (accessed 19-05-06)
  9. http://www.fda.gov/cder/regulatory/applications/NDA.htm (accessed 19-05-06)

About Authors:

Manthan D. Janodia

Manthan D. Janodia
Department of Pharmacy Management, Manipal College of Pharmaceutical Sciences, Manipal Academy of Higher Education, Manipal 576 104


Department of Pharmacy Management, Manipal College of Pharmaceutical Sciences, Manipal Academy of Higher Education, Manipal 576 104

Virendra Ligade

Virendra Ligade
Department of Pharmacy Management, Manipal College of Pharmaceutical Sciences, Manipal Academy of Higher Education, Manipal 576 104

Ajay Pise

Ajay Pise
Department of Pharmacy Management, Manipal College of Pharmaceutical Sciences, Manipal Academy of Higher Education, Manipal 576 104


Department of Pharmacy Management, Manipal College of Pharmaceutical Sciences, Manipal Academy of Higher Education, Manipal 576 104

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