The research process includes both preclinical studies and clinical trials.

The pharmaceutical industry must identify chemical structures for synthesis and subsequently assess the biological effects of these compounds in laboratory and animal models. Compounds that show promising biological effects are selected for further study.

Preclinical studies are usually conducted in the research laboratory of pharmaceutical companies or in university centers. Once a potential compound has been identified, a pharmacological expert analyzes the main biological effects of the drug, its duration of action and the adverse effects of the compound in various animal species. Pharmacokinetic studies performed in animals define the absorption, volume of distribution, metabolism and excretion of the candidate compound. Toxicological studies are performed to identify any possible mutagenic or teratogenic effects of the drug. Compounds that meet the requirements of these early studies are further assessed to determine the optimal dosage and route of administration. From these studies a drug may be selected for further development. These goals usually can be achieved within two to four years. At this time a submission to the regulatory authorities for authorization to administer the potential new drug (IND: investigational new drug) to humans is applied for. The latter process involves a well-defined procedure that may require an additional few months for approval. During this process the preclinical data are reviewed by an appropriate national regulatory body, such as the U.S. Food and Drug Administration (FDA) or the HPB in Canada. These agencies follow similar procedures, and for this reason multicenter studies are often performed using similar protocols in the two countries.

Four phases of clinical drug development are recognized.

These studies are carried out in small numbers of normal, healthy volunteers. The primary objective is to test the compound for safety and tolerability. These studies are done initially with a single dose, then with multiple doses. Pharmacokinetic and pharmacodynamic studies in humans must be performed with close medical surveillance and continuous monitoring of patients for adverse effects. During the time that Phase I studies are underway, animal studies for toxicity and potential carcinogenicity are continued.

At this phase, pilot studies to evaluate the efficacy and safety of a new drug are performed in patients with the specific disease of interest. The studies are usually short-term and may either be placebo-controlled or employ a comparison with a standard therapy. The emphasis in Phase II is on the definition of the most appropriate dose, dosing interval and route of administration. These studies often provide information that is vital for the design of Phase III trials. The latter provide definitive data regarding the efficacy and safety of a new drug.

Animal studies for toxicity and carcinogenicity continue during this phase.

These studies, which are usually conducted in a large number of patients, are designed to demonstrate either short- or long-term efficacy and provide further safety data. A Phase III trial usually compares a fixed dose of the new drug to conventional therapy under conditions that approximate those of usual clinical care. The therapeutic profile of the drug is defined by the results of these studies, which determine the final indications, dosage, route of administration, contraindications, adverse effects and possible drug interactions.

The duration of Phases II and III is often in the range of three to five years. Following accumulation of appropriate Phase II and III data, a submission to regulatory authorities is filed (NDS: New Drug Submission). These data are then scrutinized by the appropriate government experts. In Canada it may require an additional two years before approval to market the product is received.

Following approval for general use, the evaluative process continues. Clinical studies are performed with approved or marketed drugs to gather more information on possible adverse events, to compare them with alternative treatments, and to detect interactions with other drugs. Due to the low prevalence of most serious adverse events, Phase IV observational studies (postmarket surveillance) are often the only means of adequately defining the safety profile of new compounds. During this period, new indications, new formulations or effective combinations of the new drug with existing therapies may be explored. The knowledge of a new pharmaceutical grows gradually through the various phases of clinical research, and it is never 100% complete. All relevant findings must be documented and reported, regardless of the time that has passed since the initial approval of the drug for general use.