Glossary

505(b)(2) New Drug Application – A new drug application that contains full investigations of safety and effectiveness but where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference. Differs from an ANDA in that it has ability to earn market exclusivity. Named after the section of the Federal, Food, and Cosmetic Act that describes this sort of new drug application.

Abbreviated New Drug Application (ANDA) – Application for a U.S. generic drug approval for an existing licensed medication or approved drug. These application are generally not required to include preclinical (animal) or clinical (human) data to establish safety and efficacy. Applicants must demonstrate, instead, that the product is bioequivalent.

Advisory Committee (AdComm) – A panel of experts used to assist the FDA on potential drug approvals. The likely question at the heart of most panels is whether or not the benefit of the drug is worth the risk. Panel notes are released two days in advance of the panel and outline the exact questions asked of the advisory panel. Trading is halted for affected companies until the panel has ended.

Biologic License Application (BLA) – A request for the permission to introduce a biologic product into interstate commerce. Similar to an NDA but for biologic therapies.

Complete Response Letter (CRL) - When a company is not approvable upon completion of the NDA review. The CRL replaces the terms ‘approvable’ and ‘not approvable’, used prior to 2008. The letter explains why a drug can not be approved at the given time and sometimes outlines what must be done to gain approval. Usually causes a tremendously negative impact on the share price of the company involved depending on the perceived ability of the company to surmount reported issues.


Food and Drug Administration (FDA) – Agency of the Department of Health and Human Services responsible for protecting and promoting public health through the regulation and supervision of food safety, tobacco products, dietary supplements, presciption and over-the-counter pharmaceutical drugs, vaccines, biopharmaceuticals, blood transfusion, medical devices, electromagnetic radiation emitting devices, veterinary products, and cosmetics. All new drugs, biologics, and medical devices must be approved by this agency.

Investigation New Drug (IND) Application – An application to the FDA by the sponsor to obtain permission to initiate in human clinical trials (phase 1). The application must contain animal pharmacology and toxicology studies, manufacturing information, and clinical protocols and investigator information. The application does not require carcinogenicity or teratogenicity data under normal circumstances.

New Drug Application (NDA) - The vehicle with which a drug sponsor formally submits a drug to be approved by the FDA. Upon acceptance of the NDA, a PDUFA date is given by which the FDA will attempt to respond (PDUFA date). New drug application are either of the type 505(b)(1) or 505(b)(2), where 505(b)(1) refers to the more traditional NDA (the application sponsor must do their own clinical and preclinical studies).

Orphan Drug Status – A status given to pharmaceutical agent that treats a disease that affects less than 200,000 people. Allows the drug sponsor to perform phase III trials with as little as 1,000 patients. Also grants sponsor seven years of market exclusivity for the intended indication upon approval.

Phase I trial - Clinical trial that primarily establishes the safety and dosing range of a potential drug in a small group (20-100) of healthy volunteers. Sometimes referred as first in human (FIH) testing.

Phase II trial - Clinical trial on a small patient population (20-300) that is often the first time the efficacy is demonstrated for a particular drug.

Phase III trial – Large scale (300-3,000 patients) clinical trial evaluating safety and efficacy of a particular drug candidate. Upon successful completion of the phase III trial an NDA is submitted to the FDA.

Phase IV trial (aka Post Marketing Surveillance Trial) – Safety surveillance and ongoing technical support after it receives permission to be sold.


Premarket Approval (PMA) – The process by which the FDA approves a medical device that has been deemed sufficiently different than that of devices already on the market.

Premarket Notification (PMN or 510k) – The process by which a maker of a medical device must notify the FDA of their intent to market. If the device is significantly different from a device on the market prior to May 28, 1976, the device must go through a pre-market approval (PMA).

Prescription Drug User Fee Act (PDUFA) – A law passed in 1992 allowing the FDA to collect fees from drug manufacturers to fund the drug approval process. In exchange for fees, the FDA provides a faster turnaround on approvals of NDAs. A PDUFA date refers to the date at which a company can expect a response to its NDA. This date, however, can be pushed back at the FDA’s discretion for any number of reasons.

Risk Evaluation and Mitigation Strategy (REMS) – A strategy often submitted along with an NDA that addresses what the company will do to minimize potential unintended risks (such as misuse and abuse) associated with the marketing of the drug.

Special Protocol Assessment (SPA) – A declaration from the FDA that a phase III trial’s design, clinical endpoints, and statistical analyses are acceptable for FDA approval.

Supplemental New Drug Application (sNDA) – Companies are allowed to make changes to drugs or their labels after they have been approved.  To change a label, market a new dosage or strength of a drug, or change the way it manufactures a drug, a company must submit a supplemental new drug application (sNDA).