The Basics of How a Drug Gets FDA Approved

Let us start with an interesting question. If you had $500 million dollars and were given the choice of either 1) Buying a professional sports team or 2) Paying for a medication to get through the FDA development process and then owning that drug's rights, which one would you choose? The average person doesn't realize that those two options are of equal value, but they actually are.

Getting a drug approved by the FDA is expensive, time-consuming, and risky. Only one in five medications actually makes it through the process, and the price to do so is daunting. If the drug makes it through and the disease it treats is fairly common, the revenue potential can be tremendous.

So choosing option 2 could pay off much better than the professional sports team. Most sports teams are break-even propositions from year to year, but at least they are appreciating assets that generate revenue.

Once a drug is synthesized in a lab or purified from a natural source, the next step is typically animal testing. Common animals used include mice or rats.

This is called the preclinical phase of testing, and if successful an Investigational New Drug (IND) application is submitted to the Food and Drug Administration (FDA). Within the IND application is the human trial's protocol. The FDA may contest the protocol, but if not after 30 days the manufacturer may start the testing.