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FDA Drug Approval Process

Medically reviewed by Leigh Ann Anderson, PharmD. Last updated on May 28, 2022.

How do you get a drug to market in the U.S?

FDA approval process

What is the FDA approval process?

The U.S. Food and Drug Administration's (FDA's) Center for Drug Evaluation and Research (CDER) is a science-led organization in charge of overseeing the drug approval process before a drug is marketed. CDER ensures that both brand and generic drugs work correctly and that the health benefits outweigh the known risks. They review each drug closely using an independent team of clinicians and scientists who evaluate safety, efficacy and labeling of the drug product. After approval, FDA follow-up continues to make sure new drugs continue to be safe and effective.

The four phases of a drug approval process includes:

  • Pre-clinical, INDA
  • Clinical
  • New Drug Application (NDA) Review
  • Post-marketing risk assessments

The full research, development and approval process can last from 12 to 15 years. What happens during this time period to be sure that the drug you pick up at the pharmacy is safe and effective?

In the manufacturer's early phases of drug discovery (preclinical research) they are synthesizing and screening a drug candidate for toxicity in animals before the medicine moves on to human trials. The sponsor files an Investigational New Drug (IND) Application that details specifics such as chemistry, manufacturing and the initial plans for human testing. The IND is reviewed by the FDA to ensure that clinical trials will be safe for humans and that adequate informed consent is included to protect humans subjects.

Human drug studies can begin only after the IND is reviewed by the FDA and a local institutional review board (IRB). The board is a panel of scientists and non-scientists in hospitals and research institutions that oversees clinical research.

Once a company develops a drug, it undergoes several years of laboratory testing before a New Drug Application (NDA) is made to the FDA to begin testing the drug in humans. Only 1 in 1000 of the compounds that enter laboratory testing will ever make it to human testing.

Once a drug is approved and on the market, Phase 4, which is post-marketing review, takes place to be sure the new medicine remains safe now that it is for public use. Pediatric studies, or special safety studies may be completed during this time frame. Phase 4 post-marketing studies and a public safety program called Medwatch helps to monitor side effects after drug approval.

What are the 4 phases of drug approval?

If the FDA gives the green light, the investigational drug will enter several phases of clinical trials and post-marketing approval:

  • Phase 1: Phase 1 focuses on safety. About 20 to 80 healthy volunteers to establish a drug's safety and profile, and takes about 1 year. Safety, metabolism and excretion of the drug are also emphasized.
  • Phase 2: Phase 2 focuses on effectiveness. Roughly 100 to 300 patient volunteers to assess the drug's effectiveness in those with a specific condition or disease. This phase runs about 2 years. Groups of similar patients may receive the actual drug compared to a placebo (inactive pill) or other active drug to determine if the drug has an effect. Safety and side effects are reviewed.
  • Phase 3: Phase 3 studies begin if evidence of effectiveness is shown in Phase 2. Typically, several hundred to 3,000 patients are monitored in clinics and hospitals to carefully determine effectiveness and identify further side effects. Very rare diseases may have fewer study patients. Different types and age ranges of patients are evaluated. The manufacturer may look at different doses as well as the experimental drug in combination with other treatments. This phase runs about about 3 years on average.
  • Phase 4: Phase 4 studies gather additional information about a product's safety, efficacy, or optimal use after approval. Post-marketing studies may take place in groups of patients who are using the drug in a real-world setting. These studies may identify additional uses, long-term effectiveness, and previously undetected side effects. Rare side effects that occur in fewer than 1 in 5,000 patients are unlikely to be seen in Phase 1 to 3 studies before approval, but groups of patients this large are not usually studied. These rare side effects are more likely to be found when large numbers of patients use a drug after it has been approved and marketed.

What is a New Drug Application (NDA)?

The New Drug Application (NDA) is the formal step the manufacturer takes to ask that the FDA to approve their drug for US marketing.

For an NDA, the company writes and submits an application which includes thousands of pages to the FDA for review and approval. The NDA includes all animal and human data, plus side effects, dosing, and effectiveness. Other information, such as pharmacokinetics (how the drug moves through the body), and specifics of manufacturing are also addressed. The FDA team has 60 days to review the NDA and determine if it will be filed for further review.

CDER expects to review and act on at least 90% of NDAs for standard drugs no later than 10 months after the applications are received. The review goal is six months for priority drugs.

Once an NDA is filed, the FDA reviews the product label (package insert) to be sure the clinical information needed to safely use this drug is outlined. The FDA also takes action to inspect manufacturing plants where the drug will be made.

  • PDUFA: Some companies will pay for an expedited review with the FDA through a process known as an PDUFA (Prescription Drug User Fee Act), originally enacted in 1992. PDUFA allows the FDA to access more resources to quicken the drug approval process. Many important drugs have been approved through PDUFA, including medicines for cancer, AIDS and heart disease.

Drugs that may be the first available treatment for an illness or with a significant benefit over existing drugs may receive one or more special designations:

  • Orphan drug program: Gives financial incentives to sponsors for manufacturing drugs that treat rare (orphan) diseases. In the US, an orphan disease is defined as one that affects fewer than 200,000 individuals. One example is Rubraca (rucaparib), designated an orphan drug in 2016 for treatment for ovarian cancer. Learn more: What is an orphan drug?
  • Accelerated Approval: The Accelerated approval process began in 1992 to allow promising therapies for serious or life-threatening conditions to come to market more quickly. This method uses a "surrogate endpoint" that predicts a reasonable clinical benefit of the drug. However, standard endpoints must still be proven after a drug is approved under post-marketing clinical trials to prove it's benefit. If further post-marketing studies fail to verify the predicted clinical outcome, the FDA may withdraw accelerated approval of the new use or drug. One example of a drug that received accelerated approval is Gleevec (imatinib mesylate), an oral treatment for patients with a life-threatening form of cancer called chronic myeloid leukemia (CML).
  • Fast Track: Drugs that treat serious medical condition and fill unmet medical needs may receive fast-track designation based on positive human or animal data. This FDA process, requested by the manufacturer, can get new drugs to patients who need them more quickly. For example, Xywav (calcium, magnesium, potassium, and sodium oxybates) received Fast Track designation by the FDA in September 2020 for treatment of idiopathic hypersomnia. In August 2021, it was fully approved for this use.
  • Breakthrough Therapy: Preliminary clinical research demonstrates that a drug candidate for a serious condition may provide substantial improvement over available therapy. A drug designated for Breakthrough Therapy is also eligible for the Fast Track process. The sponsor must request this designation from the FDA. For example, in Feb. 2018 Pfizer received Breakthrough Therapy designation for Cibinqo (abrocitinib), a Janus kinase (JAK) 1 inhibitor for the treatment of patients with moderate-to-severe atopic dermatitis (AD). In Jan. 2022, the FDA fully approved Cibinqo for atopic dermatitis in adults.
  • Priority Review: During Priority Review, the FDA takes action on a new drug application within six months, compared to 10 months under standard review. These drugs receive higher priority because they can significantly improve the treatment, diagnosis, or prevention of serious conditions. An one example, in Feb 2017, the FDA granted Priority Review to AbbVie for Mavyret (glecaprevir / pibrentasvir) for the treatment of chronic hepatitis C in all major genotypes. It was also granted Breakthrough Therapy designation. In August 2017, Mavyret received final FDA approval for this use.

Who is on an FDA Advisory Board?

A group of independent physicians and other clinicians, called an FDA Advisory Board, meets to discuss the NDA with the FDA reviewers and manufacturer of the product. This advisory team includes physicians, pharmacists, chemists, pharmacologists, statisticians, and even patient representatives. These meetings often take one or two days.

After the meeting, the Advisory Board will make a recommendation for new drug approval, or not, to the FDA, usually through a vote. The FDA often follows the advice of the Board, but is not obligated to do so.

How much does it cost to get a drug to market?

It can take billions of dollars for a manufacturer to get a new drug from the laboratory onto the pharmacy shelf. In a study from the London School of Economics, the median cost was determined to be $985 million. But other studies have estimated up to $2.6 billion. For example, differences can occur due to therapeutic class; for example, cancer and immunomodulators have a median cost up to $2.7 billion.

What happens after final drug approval?

After final approval, the drug becomes available for physicians to prescribe. However, drugs may not come to the market immediately because of patents disputes, manufacturing issues, or controlled substance designation from the DEA.

Pricing is usually revealed after approval, but the FDA does not consider drug pricing or economics as part of the FDA approval process. This is in contrast with many other countries that do consider the economic impact of new drugs in their society.

What is the Medwatch safety program?

Once on the market, the drug company will continue to report cases of adverse reactions (side effects) and other clinical data to the FDA. Patients and healthcare providers can also report side effects or other concerns through the MedWatch Program run by the FDA. When a new risk of a drug is identified, the FDA will update the product label to inform everyone.

Related: See New FDA Drug Approvals and New Indications


Further information

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