Drug Development & Approval Process

The fully capitalized cost to develop a new drug, including studies conducted after receiving regulatory approval, averages $1.2 billion, according to an analysis by the Tufts Center for the Study of Drug Development. The Tufts Center study was based on compound-specific costs for a sample of 17 investigational biopharmaceuticals from four firms that first entered clinical testing from 1990 to 2003. Notably, only five in 5,000 compounds that enter preclinical testing make it to human testing, and only one of the five tested in people is approved by the Food & Drug Administration (FDA).

A new biotech product took 97.7 months on average to wend its way through clinical development and regulatory review, about eight percent longer than for pharmaceuticals, according to the Tufts Center study.

Clinical Trials
	Preclinical		Phase I	Phase II	Phase III		FDA		Phase IV
Years	6.5	-	1.5	2	3.5	-	1.5	15 total	-
Test Population	Laboratory & animal studies	-	20 to 80 healthy volunteers	100 to 300 patient volunteers	1,000 to 3,000 patient volunteers	-	-	-	-
Purpose	Assess safety & biological activity	File Investi- gational New Drug (IND) at FDA	Determine safety & dosage	Evaluate effectiveness, look for side efects	Confirm effectiveness, monitor adverse reactions from long-term use	File New Drug Appli- cation  (NDA) at FDA	Review Process/ approval	-	Additional post- market testing
Success Rate	5,000 compounds evaluated	-	-	5 enter clinical trials	-	-	1 approved	-	-

Source: Tufts Center for the Study of Drug Development.