Food And Drug Administration - FDA


DEFINITION of 'Food And Drug Administration - FDA'

A government agency established in 1906 with the passage of the Federal Food and Drugs Act. The agency is currently separated into five centers, which oversee a majority of the organization's obligations involving food, drugs, cosmetics, animal food, dietary supplements, medical devices, biological goods and blood products.

BREAKING DOWN 'Food And Drug Administration - FDA'

The FDA is renowned for its work in regulating the development of new drugs. The FDA has developed rules regarding the clinical trials that must be done on all new drugs. Currently, pharmaceutical companies must test drugs through four phases of clinical trials before they can be marketed to individuals. Every year the FDA monitors the testing of 3,000 new drugs on nearly 200 million people to determine their effects. In 2006, the proposed budget for the FDA was approximately $1.8 billion. The FDA is relevant for investors specifically in regards to biotech and pharmaceutical companies. FDA approval can literally make or break the stock of a small company involved in developing new drugs. It is very common to see the stock of these companies skyrocket (or plummet) as test data is released.

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  1. How does the profit margin compare for a generic drug versus a brand name drug?

    Profit margins are higher for generic drugs compared to brand-name drugs. However, total profits on brand-name drugs are ... Read Full Answer >>
  2. What countries comprise the majority of the global drugs sector?

    The legal trade in pharmaceutical drugs, or the drugs sector or pharmaceutical sector, is highly concentrated in North America ... Read Full Answer >>
  3. What process does a company need to follow to bring a new drug to market?

    Bringing a new drug to market is a lengthy process that follows several stages. The first step, pre-clinical testing, involves ... Read Full Answer >>
  4. What are the primary risks associated with investing in the drugs sector?

    Investors in the drug sector must be aware of the regulatory challenges, competition and financial concerns associated with ... Read Full Answer >>
  5. What is the drugs sector?

    The drugs sector is the portion of industry that develops and produces pharmaceuticals. This sector includes both major corporations ... Read Full Answer >>
  6. What does it mean when a drug is in clinical trials and how long does it take to ...

    Clinical trials are research studies designed to determine the safety and effectiveness of new drugs in humans. All products ... Read Full Answer >>
  7. How does government regulation impact the drugs sector?

    Government regulation lengthens the process for bringing new pharmaceuticals to market and restricts the drugs sector to ... Read Full Answer >>
  8. Why did the Department of Justice launch an inquiry into the sale of ImClone shares ...

    On December 28, 2001, the FDA announced that it was rejecting ImClone's new cancer drug, Erbitux. The drug represented a ... Read Full Answer >>
  9. What does it mean to have orphan drug status?

    In 1982, The U.S. Food and Drug Administration (FDA) recognized the lack of incentive for pharmaceutical companies to develop ... Read Full Answer >>

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