All You Need To Know About Pharmaceutical Development

What Is Pharmaceutical Drug Development?

Drug development is the process of introducing a novel pharmaceutical drug to market when a lead molecule has been discovered. It comprises preclinical research on microbes and animals, applying for regulatory status with the FDA for a novel experimental medicine to begin human clinical trials, and getting regulatory approval with a new drug application to sell the drug. From idea to authorized vaccination or medicine, the whole process often takes over a decade.

New Chemical Entity Development

The drug development process may be broadly separated into preclinical and clinical activity.


Drug development yields new chemical entities. These show promise against a disease-causing biological target. This NCE’s human safety, toxicology, pharmacokinetics, and metabolism are unknown. Before human clinical trials, medication development evaluates all these aspects. Drug development also suggests the initial dosage and timetable for human clinical trials.

Drug development must determine the NCE’s chemical composition, stability, and solubility. Manufacturers must improve their chemical-making process to scale from milligrams to kilograms and tons. They analyze the product’s appropriateness for capsules, tablets, aerosol, intramuscular, subcutaneous, or intravenous forms. Preclinical and clinical development call these procedures chemistry, manufacturing, and control (CMC).

Many components of medication development depend on meeting regulatory standards. These tests identify a new compound’s primary toxicity before human usage. Legally, a drug’s primary organ toxicity and other bodily effects must be assessed. Such early experiments are done in vitro, but many tests must utilize animals to highlight the complicated interaction of metabolism and drug exposure on toxicity.

Preclinical testing and CMC data are submitted to regulatory bodies as an Investigational New Drug (IND) application. IND approval leads to clinical development.

Clinical Phase

Clinical trials are comprised of three or four steps:

  • Phase I trials, usually done on healthy volunteers, find out if the drug is safe and how much to give.
  • Phase II trials are done on a small number of patients with the disease that the NCE is trying to treat to get an initial idea of how well the treatment works and to find out more about how safe it is.
  • Phase III trials are big, important tests that look at how safe and effective treatment is in many people with the disease being studied. If safety and effectiveness are good enough at this step, clinical testing may end, and the NCE moves on to the new drug application (NDA) stage.
  • Phase IV trials are studies that happen after a drug has been approved and are sometimes a requirement from the FDA. They are also called “post-market surveillance studies.”

Once an NCE enters human clinical trials, determining its properties continues. In addition to the testing necessary to introduce a new vaccine or antiviral medicine to the clinic, producers must specify any long-term or chronic toxicities, including effects on unmonitored systems.

After these tests, a vaccine candidate or antiviral drug is approved for use in clinical trials, and its NCE portfolio of evidence may be presented for marketing approval in all countries where the producer intends to sell it. This is termed a “new drug application” (NDA) in the US.

Most innovative medication candidates fail in Phase II–III clinical trials due to unacceptable toxicity or lack of effectiveness on the targeted illness. Phase II–III clinical trials fail to owe to undiscovered harmful side effects, low funding, trial design flaws, or poor trial execution, according to drug development program assessments.

A study from the 1980s–90s indicated that just 21.5 percent of Phase I medication candidates were subsequently authorized for the market. In 2006–15, the approval rate from Phase I through Phase III studies was around 10% and 16% for vaccines. The high failure rate in pharmaceutical research is called “attrition,” necessitating early choices to “kill” programs to prevent expensive failures.


High attrition, substantial capital costs, and protracted timescales characterize drug development projects. This makes valuing such initiatives and businesses difficult. Some valuation systems can’t handle these details. Popular valuation methodologies are risk-adjusted net present value, decision trees, real options, and comparables.

It is also crucial to include phase parameters such as length, success rates, costs, and expected sales, including the cost of goods (COGS) and marketing and sales expenditures. The cash flow estimate should represent the quality of management and technological innovation.

Success Rate

Theoretically, 5,000 to 10,000 chemical molecules might be therapeutic candidates. About 250 show enough promise for lab testing, mice and other animals. Around five of these are suitable for human testing. In the 1980s and 1990s, the Tufts Center for the Study of Drug Development reported that only 21.5 percent of medications that began Phase I trials made it to market. 2006-2015: 9.6% success rate. “Attrition rate” refers to significant failure rates in pharmaceutical development. During medication development, careful decision-making prevents expensive failures. Smart software and clinical trial design may reduce false negatives. Well-designed dose-finding studies and comparisons to a placebo and gold standard help get accurate findings.