work of the NDA review process in CDER’s Office of New Drugs (OND) and its offices of drug evaluation which conduct premarket reviews, and in CDER’s Office of Drug Safety (ODS) (which is now called the Office of Surveillance and Epidemiology, OSE, because of a restructuring of CDER in May 20051) and its Division of Drug Risk Evaluation (DDRE), which monitors postmarket risks and undertakes risk assessments. (Other divisions and offices of ODS/OSE address safety issues, such as medication errors and drug names.2) The chapter does not address Abbreviated NDAs for generic drugs that go through CDER’s Office of Generic Drugs. Nor are drugs that are on special tracks, such as accelerated approval or orphan-drug status, specifically addressed in this general description of how a new drug moves through the system.

Economic Impact of Drugs

Prescription drugs play a major role in American health and economy. For example, prescription drugs for controlling blood pressure and blood cholesterol levels were partly responsible for one of the ten great public health achievements of the 20th century: the 5 percent decline in death rates for coronary heart disease since 1972 (CDC, 1999). Prescription drugs are among the innovations that have replaced some highly invasive measures (such as surgery) with less invasive preventive and health maintenance therapies (DHHS, 2002). Prescription drugs also can help reduce health care costs by decreasing hospitalization. National survey data show that 44 percent of Americans take at least one prescription drug in any given month (NCHS, 2004). In economic terms, the investment and return on investment of drug discovery and development are vast. Although methodologies used for estimating the cost of bringing a drug to market are a matter of some controversy, some estimates are provided here as an illustration (Epstein, 2004). The cost of drug development has been estimated at approximately $800 million and at between $500 and $2,000 million (DiMasi et al., 2003; Adams and Brantner, 2006). The Bain report provided the estimated cost of development at $1.7 billion (Gilber et al., 2003). In 2005, the biopharmaceutical industry spent approximately $51.3 billion in drug discovery and development (PhRMA, 2006). A great deal is spent on prescription drugs. Due to cost-containment strategies, the rate of increase of spending on prescription drugs has slowed down, but still totaled $179.2 billion in 2003, and comprised 11 percent of national health spending (Kaiser Family Foundation, 2005; Smith et al., 2005).


For the remainder of this chapter, we will refer to this office as ODS/OSE.


Division of Surveillance, Research and Communication Support and Division of Medication Errors & Technical Support.

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