Prescription drugs play a big role in modern healthcare, accounting for a sizable share of spending, and offering important opportunities for new treatments. The systems that regulate and manage them, play an important role in the healthcare system. Let's talk for a few minutes about prescription drugs and the drug approval process. This is a pretty complex area with lots of regulations, so this will have to be a fairly basic overview. If this is an area that you're particularly interested in or plan to work in, there'll be plenty more you can dig into more deeply. But hopefully, this is enough to get us going. Where do new drugs come from, and how did they get on the market? We can imagine the process starting with research and science, leading to the discovery of things that seem promising. But now, in order to prevent problems, we have rules that say one can't just start bottling up new compounds and selling them as drugs, you need regulatory approval. In the US, the Food and Drug Administration, the FDA, is tasked with overseeing prescription drugs. Their specific mandate is to see that the prescription drugs are safe and efficacious, that they work. To sell a prescription drug in the US, one needs to get FDA approval. Getting FDA approval involves a number of steps. We think of companies here more than individuals because this process takes a lot of effort. When a company has something they think is promising, they'll usually do a bunch of laboratory testing, generally, including testing in animals and other things, to see that it really does seem promising. If it does, they can start the normal approval process with the filing of something called an investigational new drug application, an IND for short. The FDA looks this over, and if approved, the company is allowed to begin the process of testing the new drug in humans. This involves a series of three different types of trials called Phase I, Phase II, and Phase III trials. Phase I trials are smaller first steps designed to test basic things about the drug, including its safety in humans and dosages. These would commonly use small groups of healthy volunteers. If Phase I trials are successful, then Phase II trials can be conducted with more people, dozens or a few 100, and tests for effectiveness and side effects can be conducted in people with the condition of interest. If the Phase II trials are successful, then the company can move to Phase III trials with even more people, generally, thousands, and more data on effectiveness and longer-term reactions or outcomes can be assessed. Now, quite a few things that start this process don't make it all the way through. But if all this goes well, then the company can file a new drug application or an NDA. The FDA reviews this, and if approved, then the company is finally able to begin marketing the drug. Doctors can prescribe it, and patients can buy it, and so on. This whole process has a lot of moving parts, and even in a bit more detail than I was able to fit in here. It takes a long time. Nine years is one general estimate number that you'll hear around, but, of course, it can vary from one case to another. It can be pretty expensive for the companies to do this work, many millions or even billions of dollars. That's a bit about the approval process for new prescription drugs. I'll note two additional points as we finish up. First, that's the main part, but it's only part of the relevant FDA oversight process for prescription drugs. The FDA may continue to monitor drugs once they're on the market to assess their performance. Sometimes people refer to these as Phase IV trials. The FDA can regulate other things like labeling, or manufacturing processes, or other aspects of making and selling the drugs. Second, this was a description of the situation in the US. Regulatory processes in other countries can be similar but have their own nuances. In Europe, for example, the European Medicines Agency, or EMA, is the regulatory body that grants approval for drugs to be used, and individual country governments can play a role in some aspects of drug testing as well. Outside of Europe, many countries also have their own drug approval processes. That can take some specific investigation if that's an area of focus for you. Overall, the prescription drug approval process plays an important role in healthcare and is well worth some attention.
