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FDA Approval

The process by which the U.S. Food and Drug Administration evaluates a drug's safety and efficacy through clinical trial data before allowing it to be marketed.

How It Works

FDA drug approval follows a multi-decade legal framework: the Food, Drug, and Cosmetic Act (1938), the Kefauver-Harris Amendments (1962) requiring proof of efficacy, the Hatch-Waxman Act (1984) creating generic and patent-challenge pathways, the Prescription Drug User Fee Act (PDUFA, 1992, reauthorized every 5 years, most recently PDUFA VII in 2022) funding FDA review with industry fees, and the Biologics Price Competition and Innovation Act (BPCIA, 2010) creating the biosimilar pathway. New small-molecule drugs require a New Drug Application (NDA) under 21 CFR 314; biologics require a Biologics License Application (BLA) under 21 CFR 601. Applications must include Phase 1 safety (typically 20-100 volunteers), Phase 2 efficacy/dose-finding (100-500 patients), and Phase 3 confirmatory (often 1,000-10,000 patients) clinical trial data, plus Chemistry Manufacturing and Controls (CMC) documentation, proposed labeling, and Risk Evaluation and Mitigation Strategies (REMS) where warranted. PDUFA VII performance goals are 10 months for standard review and 6 months for priority review (drugs offering significant improvement). Accelerated approval under Subpart H allows conditional approval based on surrogate endpoints, with mandatory post-market confirmatory studies. Breakthrough Therapy and Fast Track designations provide enhanced FDA engagement. In 2023 FDA approved 55 novel drugs (CDER), roughly the recent historical average. Each approval is documented in the Orange Book (small molecules) or Purple Book (biologics) with associated patents and exclusivity terms.

Related Terms

  • Generic Drug, A medication that contains the same active ingredient, dosage, and form as a brand-name drug, approved after the original's patent expires, typically costing 80-95% less.
  • Biologic Drug, A complex medication derived from living cells, including monoclonal antibodies, vaccines, and cell therapies, that treats serious conditions like cancer and autoimmune diseases.
  • Abbreviated New Drug Application (ANDA), The FDA application pathway for generic drugs, which requires proving bioequivalence to the brand-name drug rather than repeating full clinical trials.
  • Orange Book Listing, The FDA's publication of approved drug products with therapeutic equivalence ratings and associated patent and exclusivity information, used to determine generic substitution.
  • Exclusivity Period, A period of market protection granted by the FDA (separate from patents) during which generic competitors cannot be approved, even if no patent exists.

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About This Definition

This definition is part of the DrugPrice Drug Pricing Glossary, 49 terms explaining how prescription drug pricing works in the United States. All definitions are written in plain language for patients, caregivers, journalists, and healthcare professionals.

this entity is one of the U.S. Medicare prescription-drug pricing concepts that recurs across this site. The definition above is the technical answer; the paragraphs below add the practical context for how the concept connects to the CMS Medicare Part D Drug Spending data data behind every per-entity page on the site.

In the CMS Medicare Part D Drug Spending data data, this concept shapes one or more of the fields that drive the per-entity grades and rankings on this site. The methodology page describes which fields feed into which output; this glossary entry documents the underlying term.

Source: CMS Medicare Part D Spending, 2026.