A Look at the FDA Approval Process

Pharmaceutical companies say the cost of taking one drug through the U.S. Food and Drug Administration (FDA) development and approval process, including costs associated with medicines that fail, is $1.2 billion.

The regulatory process starts with an investigational new drug application (IND). This is filed with the FDA once a pharmaceutical company or sponsor completes pre-clinical testing, often animal studies, on a new compound. Compounds sometimes come out of the academic research sphere and are sold or licensed to a drug company for development.


Following the IND, three phases of clinical trials begin. Phase I trials are run on small groups of healthy adult volunteers, generally between 20 and 80 people, strictly to test safety and “tolerability.” Initial work is conducted to determine dosing and ferret out side effects.

Next come larger Phase II trials, typically encompassing 100 to 300 volunteers and used to evaluate effectiveness, further fine-tune dosing, and determine short-term safety.

The final Phase III trials are conducted with large, more diverse groups of volunteers, often many thousands of people in multiple sites around the world. These trials are designed to generate statistical evidence for both the safety and effectiveness of the drug.

At any one time, as many as 200 active clinical trials in various phases are testing diabetes medications in the U.S.

At the completion of all clinical trials, the sponsor files either a new drug application (NDA) or a biologic license application (BLA) with the FDA for approval. Applications include the data from all clinical studies and can encompass 100,000 pages. The FDA then reviews all the data and approves or rejects the new medication. In some cases, the FDA mandates an additional trial, called a Phase IV trial, to evaluate long-term effects.

The total time commitment can be as much as 15 years.

Following approval, the FDA’s job is not done, since it also is responsible for post-market surveillance. Changes in labeling often occur once a medication is on the market. And in rare cases, medications are removed from the market after approval.