Clinical trials generally consist of three phases (see Figure 10.1). During Phase I, healthy volunteers take the drug to confirm that it is safe for human use and to determine dosage. In Phase II a small group of patients who have the condition intended for treatment with the experimental drug test the compound to evaluate its safety and its potential for causing side effects. If the drug passes the first two phases successfully, it proceeds to Phase III trials in larger groups of patients. These tests are designed to confirm that the drug is effective and to monitor any adverse reactions that might occur during long-term use.

Progress through all three phases takes an average of five years to complete, but a variety of factors can impede this process. Most important, researchers must be able to find enough volunteers to participate in trials; this is often difficult for the second and third phases since the pool of available patients may be small. In addition, several factors related to the specific compound can slow its passage through clinical trials. Generally, the more complex the experimental medicine or the disease or symptom being treated, the lengthier the clinical trial process. Drugs that produce multiple effects and those intended for long-term use—for example, to treat symptoms of chronic conditions such as AIDS or glaucoma—demand extra time in the clinic. But even a relatively straightforward passage through clinical testing consumes most of the $200 million to $600 million spent to develop the average drug.* And since only about one in five drugs that begin Phase I eventually secures FDA approval, clinical trials represent a significant financial risk.

Once a compound has passed all three phases of clinical testing, its manufacturer submits a request to market the drug, called a New Drug Application (NDA), to the FDA. An NDA is a massive document that includes not only the results of clinical testing but also of experiments designed to characterize the drug's chemistry and physiological activity as well as a detailed description of the process that will be used to manufacture it. In the case of a cannabinoid drug the NDA would probably also include the re-


How best to estimate the cost of developing a drug is subject to debate. Different methods produce different estimates, but the general range is from $200 million to $600 million.

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