The document discusses the highly regulated process for approving pharmaceutical drugs in the United States. It describes the 12 step process overseen by the FDA to test drugs and review safety and efficacy data from animal and human trials before a drug can be approved. While ensuring drug safety is important, the process could be improved by addressing issues like the opioid epidemic, high drug prices, and more treatment options for chronic pain patients. More regulation and government funding may be needed for drug research, pricing controls, and alternative therapies to improve access and affordability of prescription drugs.

1. Pharmaceutical Regulation
MMHA 6135 Week 5 Application
Danielle Tate

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Introduction
The Pharmaceutical industry is a highly regulated submarket in terms of what
drugs get approved for national, safe, and legal consumption. This submarket is managed
by a branch of the government called the U.S. Food and Drug Administration (FDA).
“The mission of FDA's Center for Drug Evaluation and Research (CDER) is to ensure
that drugs marketed in this country are safe and effective. CDER does not test drugs,
although the Center's Office of Testing and Research does conduct limited research in the
areas of drug quality, safety, and effectiveness” (U.S Food and Drug Administration
(FDA), 2014). The FDA is responsible for approving drugs for use, performance drug
reviews, and post-marketing risk assessments for prescription drugs and nonprescription
drugs or over-the-counter (OTC) drugs (FDA, 2014). In 1992, the Prescription Drug User
Fee Act (PSUFA) was passed. PDUFA has enabled the Food and Drug Administration to
bring access to new drugs as fast or faster than anywhere in the world, all while
maintaining the same thorough review process. Under PDUFA, drug companies agree to
pay fees that boost FDA resources, and FDA agree to timeframes for its review of new
drug applications” (FDA, 2015).
Regulatory Process
According to the FDA website there are twelve, highly regulated, steps that make
up the pre-clinical process and clinical process that must be followed to get a drug
approved. First the drug must be developed and it is tested on animals for toxicity and
efficacy. Secondly, the sponsor submits an Investigational New Drug (IND) application
to the FDA based on results from animal testing and includes a proposal for human

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testing. Thirdly, human testing begins to determine side effects and how the drug is
metabolized in the body. Fourthly, more human testing is done to determine the
effectiveness of the drug on certain diseases or conditions. In the fifth step, safety and
effectiveness are still evaluated, along with different populations, dosages, and the
combination of this drug with other drugs. The sixth step involves the FDA meeting with
the drug sponsor before an application is submitted. The seventh steps is the formal NDA
application where the sponsor asks for official approval of the drug. The sponsor must
include how the drug is manufactured and all the findings in the animal and human
testing. In the eighth and ninth step the FDA has 60 days to decide if the NDA
Application will be submitted to be reviewed by the FDA team and evaluate the research.
In the tenth step, the FDA reviews the drug’s labeling and assures the right information is
present to health care professionals and consumers. In the eleventh step, the FDA
inspects the facility where the drug is manufactured. And lastly, the twelfth step is drug
approval or a denial/response letter. Periodic post-approval risk assessments are done by
the FDA to ensure the drug’s continued safety and report any serious side effects that
should be put on the label or to pull the drug from consumption (FDA, 2015).
Extent of Regulation
The pharmaceutical industry should be highly regulated due to the safety of the
American people and the high risk of injury or death that could occur if medications are
not evaluated and administered properly. Horn (2011) discusses Daniel Carpenter’s view
of the FDA in his book and explains that the FDA does an incredible job at regulating the
pharmaceutical industry, “focusing on the stellar reputation and its ability to wield power

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as a regulatory body…Specifically, Carpenter complicates the notion that modern
bureaucracy is either ‘captured’ by interests it is assigned to regulate, or that it stands as a
defender of the ‘public interest’”. This suggests that the FDA has pure intentions and
holds the interest of the American people in high esteem (Horn, 2011).
Although the process is highly regulated, there is still room for improvement, due
to the high amount of misuse of prescription drugs. The escalating misuse of long-acting
opioids has prompted efforts to formulate safer therapies for patients suffering from pain
while also taking steps to limit inappropriate prescribing and illegal use. “The US Food
and Drug Administration agreed to tighter controls on widely used combination
hydrocodone therapies. FDA earlier called for labeling changes on long-acting opioids to
heighten awareness of risks and to limit prescribing” (Wechsler, 2013).
Another area of the pharmaceutical industry that requires more regulation, is the
realm of pricing. It is considered a free market place where pharmaceutical companies
can charge what they want, especially if the drug is in high demand and there’s a lack of
biosimilars, a lack of generics, and patents that prevent other companies from duplicating
the medication. Some legislation is being proposed to control drug costs. An example of
legislation that is being proposed to improve drug transparency for the purpose of
lowering costs is The Oregon House Bill (H.B.) 3486. This H.B. “requires drug
companies to provide a breakdown on costs associated with research and development,
clinical trials, manufacturing and distribution, as well as government grants and a number
of other items, on any therapy with a wholesale acquisition cost that exceeds $10,000
either annually or over the course of one treatment” (Connole, 2015). This H.B. could
allow consumers and even pharmacies to make more educated decisions. The better-

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educated consumers are regarding the origin of price inflation, could lower their
willingness to pay (Connole, 2015). Also, Obamacare has increased access to care which
should result in the market price falling (Martin, 2015).
With the aforementioned issues, it is clear that the U.S. Government’s and the
FDA’s involvement needs to have a stronger presence in the regulation of drugs and
healthcare as a whole. The Government could fund research for safer, less addicting
biosimilars that could help chronic patients. The Government funded insurances could
cover better substance abuse treatment programs and more alternative treatments to pain
medication, such as acupuncture, biofeedback training, and massage training. More
research could be focused on biosimilars, which could reduce drug prices. Capitations
could be put on drug prices. More drugs could be included on formularies and preferred
drug lists to give patients more options, which could also reduce price. These
propositions could make prescription drugs more of a public good.
Conclusion
The FDA has a diligent process for approving drugs and ensuring the safety of
patients. There is room for improvement regarding options for chronic pain patients and
lowering drug costs. The above suggestions could bring about positive externalities for
patients. Possible negative externalities that could occur are lower incomes for
pharmaceutical representatives and more debt for the U.S. Government. Something to
consider regarding drug price regulation is, “price constraints affect the profitability,
stock returns, and R&D of EU and U.S. firms...Had the U.S. used controls similar to

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those used in the EU, we estimate it would have led to 117 fewer new medicines and
4368 fewer research jobs in the U.S.” (Golec & Vernon, 2010).
References:
Connole, P. (2015). States target prescription drugs in ‘cap the copay’ bills; analysts warn
of offsets. Health Plan Week, 25 (13). Retrieved from:
http://aishealth.com/archive/nhpw042015-02
Golec, J., & Vernon, J. (2010). Financial effects of pharmaceutical price regulation on
R&D spending by EU versus U.S. firms. PharmacoEconomics, 28 (8). 615-628.
Retrieved from:
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45200F742EBPQ/2?accountid=14872
Horn, S. (2011). Reputation and power: organizational image and pharmaceutical
regulation at the FDA. Choice, 48 (6), 1170. Retrieved from:
http://search.proquest.com.ezp.waldenulibrary.org/pqcentral/docview/862161883/fulltext
/24055696427B4401PQ/1?accountid=14872
Martin, E. (2015). Healthcare policy legislation and administration: patient protection and
Affordable Care Act of 2010. Journal of Health & Human Services Administration, 37

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(4), 407-411. Retrieved from:
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U.S. Food and Drug Administration. (2014, November 11). How drugs are developed and
approved. Retrieved from the Food and Drug Administration website:
http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandAp
proved/
U.S Food and Drug Administration. (Accessed: 2015, June 6). Drug approval process.
Retrieved from the Food and Drug Administration website:
http://www.fda.gov/downloads/Drugs/ResourcesForYou/Consumers/UCM284393.pdf
Wechsler, J. (2013). Opioid regulation challenges FDA and manufacturers.
Pharmaceutical Technology Europe, 25 (12), 18-19. Retrieved from:
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