The process by which a pharmaceutical company develops a new drug is both time consuming and very expensive. It begins when a unique molecule, usually a natural one derived from a plant, is first investigated. A novel compound is then synthesized based on the structure of the plant compound but different enough to be patented. The compound is then tested on animals to predict its effects.

These results are submitted to the Food and Drug Administration for routine approval, which then allows the drug company to begin testing on humans.

Three phases or trials are required before the FDA can approves the drug. The drug's initial label information is dictated by the results of Phase III trials.

When Phase III studies are completed, the pharmaceutical company submits its report to the FDA in what is known as a New Drug Application (NDA).

The FDA reviews the data in the NDA to determine if the drug is safe and effective for its intended use. Once that determination is made, the drug is approved for use.

However, before granting approval, the FDA asks experts for their opinions on the drug. These opinions, which are often controversial, are expressed during advisory committee meetings. These meetings are usually open to the public and it is the claims of these experts regarding Vioxx, that fueled the very public debate on the value and independence of the FDA.

Once the drug is approved, the pharmaceutical marketing arm then becomes responsible for the success of the drug. Their ability to sell the product to physicians and patients is essential to the profitability of the drug.

This, according to the manufacturers, allows them the resources to discover and develop new unprofitable cures.

Also once a drug is approved, the pharmaceutical company that developed it, holds a patent on its use for seventeen years from the date of its application  Once that period expires, the drug is no longer protected and can be manufactured and sold by other drug companies.

The drug approval process is dependent on a series of events that culminate in four types of clinical trials.


Phase I Trials

Phase I trials or safety studies tests a drug on healthy volunteers to establish safety.  They are used to determine the amount that can safely be given to a human without incurring serious side effects. Typically less than 100 s patients are required for this phase. The study is designed to document a drug’s absorption, metabolism, and excretion.  They also document any side effects that may occur as the drugs dosage levels are increased.

This first phase of testing takes several months. Seventy percent of experimental drugs pass this initial phase of testing.


Phase II Trials

Phase II trials or efficacy studies can take anywhere from several months to two years to complete. Phase II studies involve a larger number of volunteers. Seldom more than 200 patients enter this phase. Most phase II studies are randomized trials.  Random trials consist of one group of patients who receive the experimental drug, while the second control group receives a placebo. These studies are double blinded. That is, neither the patient nor the researcher knows who is receiving the experimental drug. The purpose of phase II trials is to provide the pharmaceutical company and the FDA with comparative information about the effectiveness of the drug and to assess the drug’s safety in patients suffering from a specific disease. This phase determines the  dose range that can safely be given. About one-third of experimental drugs pass both Phase I and Phase II studies.



Phase III Trials

Once a drug has demonstrated that it is safe and effective by passing Phase I and Phase II testing, a drug company must examine its therapeutic value and safety. Phase III trials require much larger number of volunteer patients. These studies range from several hundred to several thousand patients. The higher number of patients provides the FDA and the pharmaceutical company with a better understanding of the drug's effectiveness and possible adverse reactions. Most Phase III studies are random, double blinded trials. Phase III studies last several years. The ability of a drug to gain approval is dictated by the results of these trials.

Seventy to ninety percent of drugs that enter phase III studies successfully complete phase III testing. Since doctors in private practice are reluctant to participate in these clinical trials and the FDA doesn’t independently fund them, the public is protected only by the company who sponsored the test  and  the integrity of its researchers. There is always the possibility of bias in choosing the subjects. Multiple trials of phase III are conducted and presented to the FDA for their approval. The public is protected only by an agency that acts as the marketing arm of the pharmaceutical industry.


Phase IV Trials

Once a drug  is approved to treat a specific condition post-marketing begins.

Phase IV trials are set up to monitor adverse effects, compare drugs with other drugs, and test for new uses.   Phase IV trials educate physicians on the uses of the drug.





Without dramatic evidence of actual harm, the FDA usually follows the advice of the pharmaceutical company that presents the New Drug Application.

This cozy relationship was setup as a courtesy of Congress via the Prescription Drugs User Fee Act (PDUFA) of 1992, which legalized the practice of paying off the regulators.

Congress created this user fee program to help solve the FDA’s chronic resource shortages. The law gave the FDA the authority to collect user fees from pharmaceutical manufacturers seeking drug approval. The law provides that any company that wants to submit a new drug to the FDA for approval, must pay a fee to support the review process. Prior to 1992, taxpayers paid for the drug reviews process through budgets provided by Congress.


Pfizer, Merck, GlaxoSmithKline and other pharmaceutical companies directly fund the FDA through these fees and this act. The FDA uses these funds to hire and staff its team of medical reviewers that study the drugs submitted by the pharmaceutical companies.

The effect of this act was to drop the median time required for approval from almost three years to a little over one.


Not wanting to be cut out of any of the action, a modification of the act (PDUFA II) in 2002 was reauthorized by Congress to extend the FDA’s user fees to include the approval process of medical devices, in addition to the drugs that they’d been collecting on for ten years.

A further revisions is now n the works as a new bill is making its way through the halls of Congress. While not exactly a reauthorization, the FDA Revitalization Act of 2007, which has not yet become law, is expected to double the fees that drug and medical device companies pay for the FDA’s services.

In addition to the enormous amount of money paid for the approval process of drugs, pharmaceutical companies must pay annual fees for each of their prescription drugs on the market.

The FDA collects almost a billion dollars in fees each year  from the companies they regulate. That’s likes putting the terrorists in charge of airline security and the food processing process.

The unwillingness on the part of the FDA to oppose a drug’s approval or delay its removal once its been approved, can be explained by these rules.

Their apologists, lobbyists and defenders on the other hand, argue that Congress actually saved the American taxpayer’s  those dollars, which prior the 1992 they were required to pay.  What’s going on here, is this the Sopranos with Ivy league educations?


Prior to 1992, there wasn’t a Fen-Phen scandal, or a Vioxx on the market, or Avandia or any of the drugs now thought to posse serious risks.

Perhaps if the FDA had listen to its own scientists none of these drugs would have been approved. And perhaps if taxpayers had paid for the approval process, the FDA would have acted in their best interests instead of the pharmaceutical companies.


Transparency in government demands an end to this type of financial synergy.


Congress should scrap these legislated cash payments from Big Pharma to the FDA.  Over one billion dollars has already been paid by the pharmaceutical companies to the FDA to fund the drug review process. During this same time the number of congressional hearings held to evaluate the drug approval process was none. Is it a coincidence that the lack of scrutiny by congress began when this law was enacted?