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The Drug Development Process Explained

Drug development is crucial for advancing medical care. On average, the FDA approves 25 new drugs or compounds each year. The drug development process may span from 7 to 14 years, and costs range from $1 to $3 billion.

There are five key steps in the drug development process

Discovery and Development

This is how new drugs and medical treatments are discovered. Once a compound has been identified as a potential drug candidate, drug development begins.

Preclinical Studies

Preclinical studies, also known as laboratory research, test the drug using animals and cells to determine its potential usefulness. This step MUST be completed before the FDA approves the drug to be tested in humans. Preclinical studies aim to gather detailed information about drug dosing and safety to determine whether the drug is safe enough for humans.

Investigational New Drug Application (IND)

If the results of preclinical studies demonstrate that the drug is safe for testing in humans, the researchers will submit an Investigational New Drug (IND) application to the FDA for approval to begin testing the drug on humans in clinical trials.

In the IND, the drug developers must include the following:

  • Data from the animal study and all toxicity data (related to side effects)

  • The protocol for the clinical trials to be conducted 

  • Manufacturing information

The FDA will not approve a clinical trial unless there is compelling evidence from laboratory tests and animal studies proving a potential treatment’s safety and efficacy.

Phase I-III Clinical Trials

After the FDA has approved an IND, the drug developer may begin testing the drug in human subjects in Phase I clinical trials. During Phase I-III clinical trials, the drug is tested on humans to gather evidence of its safety and effectiveness for its intended uses.

Phase I:

  • This is the first time the drug is tested on humans.

  • Phase I is crucial for deciding whether or not to proceed with further drug development.

  • This phase aims to determine how the drug works in the body, also known as pharmacodynamics.

Phase II-III:

  • The drug is tested using patient volunteers who have the disease/condition of interest.

FDA Review

If Phase I-III clinical trials provide compelling evidence that a drug is safe and effective for its intended use, a drug developer will submit a New Drug Application (NDA) to the FDA for approval to market the drug. The purpose of an NDA is to provide sufficient data for the FDA to determine the safety and effectiveness of a drug.

In the NDA, the drug developers must include the following:

  • All the results from preclinical studies and phase I-III trials

  • Prescribing information

  • Safety updates

  • Proposed labeling for the drug

Phase IV Clinical Trials

After the FDA approves the drug for marketing, the pharmaceutical company may begin marketing the drug to physicians to treat patients with the target disease or condition. In some cases, the FDA may require additional research on the drug through phase IV post-marketing studies to collect further information on the drug's long-term safety and effectiveness.


If you'd like to learn more about drug development, check out this episode from the Healthcare Triage podcast, sponsored by the Indiana University School of Medicine. In this episode, Dan Skovronsky, President of Lilly Research Laboratories and Chief Scientific Officer for Eli Lilly and Company, provides insights into the drug discovery and development process specifically focused on Alzheimer's detection and research.

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