The Drug Development Journey

The Life Cycle of a Drug: Development, Introduction, Growth, Maturity, and Decline

• The life cycle of a drug consists of five phases: development, introduction, growth, maturity, and decline.
• Sales typically begin during the introduction stage, and companies aim to keep sales at a high level throughout the life cycle.
• The development stage involves finding candidate molecules, testing on animals and healthy volunteers (Phase I), limited patient groups (Phase II), and large patient groups (Phase III).
• If successful, the drug is filed for registration with the FDA in the USA or the EMA in Europe, which takes 10-15 years plus administrative procedures.
• Pre-approval clinical tests occur in four phases: Phase I for safety (20-100 healthy volunteers), Phase II for efficacy (100-500 patients), Phase III for confirming efficacy (1000-5000 patients), and Phase IV for post-marketing surveillance.
• Patents incentivize innovation and allow companies to recoup R&D, manufacturing, and distribution costs, but they also create temporary monopolies.
• It is difficult to estimate the cost of drug development, with estimates ranging from $161 million to $4.54 billion, and costs generally increase over time.
• Heterogeneity in development costs can depend on the therapeutic class, whether the drug is an orphan drug, the size of the pharmaceutical company, and whether the drug is a new chemical entity, a new biological entity, or a next-in-class drug.
• All medicinal products require market authorization to ensure the availability of high-quality, safe, and effective medicines.
• The EMA is responsible for market authorization in Europe and includes all national medicines regulatory authorities from member states in the EU and the European Economic Area.
• Pharmaceutical companies cannot easily obtain loans due to the risky nature of their business, so profits maximization and a high return on investment are necessary to attract private investors.
• Almost half of the R&D costs are spent on the first three phases of clinical trials.