Drug Approval
Definition
The regulatory process by which a pharmaceutical product receives authorisation for commercial sale, granted by agencies such as the FDA (US), EMA (EU), and MHRA (UK). Drug approval requires demonstration of safety, efficacy, and manufacturing quality through preclinical studies and clinical trials. Approval transforms a development-stage intangible asset into a revenue-generating one.
Complementary Terms
Concepts that frequently appear alongside Drug Approval in practice.
A regulatory status granted to drugs developed to treat rare diseases affecting small patient populations, providing incentives such as market exclusivity (7 years in the US, 10 years in the EU), tax credits on clinical trial costs, and reduced regulatory fees. Orphan drug designation significantly enhances the economic value of a pharma intangible asset by creating protected market positions.
A pharmaceutical product that contains the same active ingredient, dosage form, strength, and route of administration as an originator (branded) drug and is demonstrated to be bioequivalent. Generic drugs can be manufactured and marketed after the expiry of the originator's patent protection and regulatory exclusivity periods.
A pharmaceutical product that generates annual revenue exceeding $1 billion, representing a transformational commercial success for its manufacturer. Blockbuster drugs — such as statins, biologics for autoimmune diseases, and oncology treatments — drive the majority of pharmaceutical industry profits and are among the most valuable intangible assets in existence.
The sequential stages of human testing required before a new drug or medical device can receive regulatory approval. Phase I assesses safety in a small group, Phase II evaluates efficacy and dosing, Phase III confirms effectiveness in large populations, and Phase IV involves post-market surveillance.
The portfolio of drug candidates at various stages of research, development, and regulatory approval within a pharmaceutical or biotechnology company. The pharma pipeline is a critical intangible asset, with each compound's value dependent on its probability of regulatory approval, expected market size, patent protection remaining, and development costs to completion.
A biological medicine that is highly similar to an already approved reference biological product, with no clinically meaningful differences in safety, purity, or potency. Unlike generic small-molecule drugs, biosimilars cannot be exact copies due to the complexity of biological manufacturing processes and require their own clinical trials to demonstrate similarity.
The application of biological sciences to develop products, processes, and services across sectors including pharmaceuticals, biotechnology, medical devices, agricultural technology, and environmental science. Biosciences companies are among the most intangible-asset-intensive businesses in the global economy, with value concentrated in patents, regulatory approvals, clinical trial data, proprietary compounds, and specialised human capital.
A mandatory conformity marking for products sold within the European Economic Area, indicating that the product meets EU health, safety, and environmental protection requirements. For medical devices, CE marking under the Medical Device Regulation (MDR 2017/745) requires conformity assessment by a Notified Body, clinical evaluation, and ongoing post-market surveillance.
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