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Pharmaceutical Industry Overview - Industry Terms


"This document is not an official pronouncement of the law or the position of the Service and cannot be used, or cited, or relied upon as such."

3. Industry Terms


Industry Term

Definition or Explanation


Abbreviated New Drug Application, this is a simplified submission of an already approved drug. ANDA’s are for products with the same or very closely related active ingredients, dosage, strength etc.

Accelerated Approval

A highly specialized mechanism intended to speed approval of drugs promising significant benefit over existing therapy for serious or life threatening illnesses.

Action Letter

An official communication from the FDA to an NDA sponsor that informs of a decision by the agency.

Adverse Event

Unwanted effects that occur and are detected in populations.

Advisory Committee

A panel of outside experts convened periodically to advise on safety and efficacy issues about drugs.

Amendment to an NDA

A submission to change or add information to an NDA or supplement not yet approved.


Rate and extent to which a drug is absorbed or is otherwise available to the treatment site in the body.


Scientific basis on which generic and name brand drugs are compared.

Clinical Trials

Human studies designed to distinguish a drug’s effect from other influences. Such studies conducted in the U.S. must be under an approved IND and in accord with FDA rules on human studies.


A chemical synthesized or prepared from natural sources that is evaluated for its biological activities in preclinical tests.

Dosage Form

The delivery system for a drug, such as a tablet, IV solution or cream.


The amount of drug administered to a patient or test subject at a single time.

Drug Products

The finished dosage form that contains a drug substance – generally but not necessarily in association with other active or inactive ingredients.

Drug Substance

The active ingredient to diagnose, treat, cure, or prevent disease or affect the structure or function of the body.


The desired measure of a drug’s influence on a disease condition.


Food and Drug Administration


Good Laboratory Practices, FDA guidelines governing the conduct of Non Clinical studies from which data will be used to support applications for research or marketing permits.

Incidence Rate

The rate at which new cases of disease, adverse reactions, or other events occur per unit of time in a given population at risk.

Informed Consent

The voluntary consent given by a patient to participate in a study after being informed of its purpose, method of treatment, procedures etc.



Investigational New Drug, An application that a drug sponsor must submit to the FDA before beginning tests of a new drug on humans.

New Drug

A drug first investigated or proposed for marketing after 1938 – that is, a drug that was not generally recognized as safe and effective.


New Drug Application, An application requesting FDA approval to market a new drug for human use in interstate commerce.


New Molecular Entity, A compound that can be patented, which has not been previously approved.

Parallel Track Mechanism

Policy that makes promising investigational drugs for AIDS and other HIV related diseases more widely available under parallel track protocols, while the controlled trials essential to establish the safety and effectiveness of new drugs are conducted.


The science that deals with the effect of drugs on living organisms.

Phase 1

The first trials in humans that test a compound for safety, tolerance and pharmacokinetics.

Phase 2

Pilot studies to define efficacy and safety in selected populations of patients with the disease or condition to be treated, diagnosed, or prevented.

Phase 3

Expanded clinical trials intended to gather additional evidence of effectiveness for specific indications and to better understand safety and drug related adverse effects.

Phase 4

Studies performed after a drug is approved for marketing.


Pharmaceutical Manufacturers Association

Postmarketing Surveillance

FDA’s ongoing safety monitoring of marketed drugs.

Preclinical studies

Studies that test a drug on animals and other non human test systems.

Priority Drugs

A drug that appears to represent an advance over available therapy.

Raw Data

Researchers’ records of patients, charts, x-rays, hospital notes etc.


The probability of an event occurring during a specified period of time.


Before a drug may be approved for marketing, the law requires the submission of test results adequate to show the drug is safe under the conditions of use in the proposed labeling.

Safety Update Report

Reports that an NDA sponsor must submit to CDER about the safety information that may affect the use for which the drug will be approved.

Side Effect

Any effect other than the primary intended effect resulting from drug or non-drug treatment or intervention.


The drug products resistance to change of its physical and chemical properties.


A marketing application submitted for changes in a product that already has an approved NDA.

Surrogate Endpoint

A laboratory finding or physical sign that may not, in itself, be a direct measurement of how a patient feels, functions or survives.

Treatment IND

A mechanism that allows investigational drugs to be used in expanded access protocols.

User Fees

Charges to drug firms for certain NDA’s, drug products, and manufacturing establishments.  FDA uses these fees to hire application reviewers, and to accelerate reviews using computer technology.


Chapter 2 | Table of Contents | Chapters 4, 5, & 6

Page Last Reviewed or Updated: 15-Apr-2015