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Drug development and Clinical Trials Hub

This information should not serve as medical advice or instruction. Please always consult your healthcare professional in the first instance.

Overview of the development, pricing, licensing, and appraisal process for new drugs

  • Drug Discovery
    • Pharmaceutical companies (and other, including research institutes) screen molecules or develop and test new complex molecules to find those that might have a positive effect for a disease.
  • Animal testing and clinical trials
    • Pharmaceutical companies test drugs in labs, first in animals and then in humans to ensure safety and access their therapeutic effects. In England, the Medicines and Healthcare products Regulatory Agency (MHRA) oversees this.
  • Phase 1
    • The first step in testing a new drug is to determine the safety of single doses in a small number of healthy volunteers. This stage helps researchers understand some aspects of how it works and establishes the likely dose required.
  • Phase 2
    • If the treatment proves to be safe, studies begin to determine the effectiveness of the drug in people with the condition to be treated. These studies may last several months or years and involve larger numbers of people, perhaps one or two hundred. The study may be: controlled - the drug is compared with the standard treatment or placebo (dummy treatment) double-blind - neither the investigators nor the participants know which treatment they are receiving randomised - participants will be randomly allocated to receive active treatment or placebo.
  • Phase 3
    • If a drug shows effectiveness, a larger study is conducted in hundreds of people. These clinical trials take place at different locations (multi-centre) and across several countries and may last several years. These studies allow researchers to more accurately assess the potential of the new drug in a wider range of people and compare it to existing treatments.
  • Marketing authorisation
    • For England, two licensing authorities, the MHRA and European Medicines Agency (EMA) assess safety, manufacturing quality and efficacy before deciding if a drug can be sold in the country.
  • Health technology appraisal
    • In England and Wales, NICE (National Institute for Health and Care Excellence) and SMC (Scottish Medicines Consortium) for Scotland assess the drug's clinical and cost effectiveness given the price set by the manufacturer and evidence of its impact. At this stage, there may be negotiations on the price of the drug for the NHS.
  • Funding decision
    • NICE decides whether the NHS should pay for the drug and in what circumstances. eg. severity of illness. For drugs with a high budget impact, there is scope for further price negotiations on the price. The NHS is legally obliged to fund medicines recommended by NICE or SMC. The reverse also holds true - if NICE or SMC do not approve a new medicine, then local health authorities are not required to provide funding for it.
  • Drug available for NHS patients
    • Once a drug has received marketing authorisation, has been recommended by NICE, and there is an agreed price, it is then available to prescribe to patients. In general, the NHS should make the drug availabale within three months after NICE's funding decision.
The development of new drugs is a long and difficult process. Only one or two compounds in 10,000 tested actually make it through to being licensed treatments. A potential new medicine may be rejected at any point in the development process on safety, effectiveness or quality grounds. Overall, it may take 10-15 years for a new compound to get from the test tube to the medicine cabinet.
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