What are 'Clinical Trials'

Clinical trials are studies of human volunteers for the purpose of evaluating the safety and efficacy of a medical treatment.

BREAKING DOWN 'Clinical Trials'

Clinical trials evaluate drugs, devices, procedures or behavior modifications to see if they are helpful or harmful and if they are more effective, less effective or equally as effective as existing treatments or when compared with a placebo. Drugs usually undergo three phases of clinical trials. The first phase tests a drug’s delivery, dosage and safety on a small group of people. The second phase uses a larger test group. Most drugs fail in one of these phases, but if they reach phase 3, they are tested on an even larger group and compared with a placebo or with the currently accepted treatment. Only about 5 percent of drugs pass all three phases of clinical trials and are approved for sale. There are several types of clinical trials. A single arm trial has no comparison group. A randomized, controlled trial has two groups of patients that are randomly assigned to receive either the test treatment or the placebo. If the trial is double blind, neither the patients nor the doctors know which group is which until the study is over. This type of study helps eliminate bias. The knowledge gained from a clinical study can help to treat, diagnose or prevent medical problems.

Drug approval process

Statistical analysis is a key component of evaluating the results of a clinical trial to determine whether the treatment was effective or whether the results were as likely as a chance outcome. Despite extensive testing, it can be difficult to determine drug effectiveness. While clinical trials may demonstrate that a drug does or does not work, they don’t necessarily indicate the reasons. Another shortcoming of clinical trials is that the test subjects may be healthier than the patients who would actually use the treatment being tested.

A New Drug Application (NDA) is the formal final step taken by a drug sponsor, which involves applying to the Food and Drug Administration (FDA) to get approval required to market a new drug in the U.S. An NDA is a comprehensive document with 15 sections that includes data and analyses on animal and human studies, the drug’s pharmacology, toxicology and dosage, and the process to manufacture it. Once a drug reaches the NDA stage, the probability of it receiving FDA approval and being marketed in the U.S. exceeds 80 percent. Filing of an NDA typically does not result in a substantial increase in the share price of a publicly held sponsor company, as most of the stock appreciation is likely to have occurred as the investigational drug progressed through successive phases of earlier clinical trials.

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