On humans, in stage 1 of a clinical trial the drug (new chemical entity) is given to a minute sample of healthy humans. If the idea survives this initial human investigation, stage 2 administers the drug to people suffering from the malady that the drug should alleviate. If the idea survives this further human investigation, stage 3 is a sizable experiment typically in several countries. If the idea survives this international check, the drug’s sponsor may seek licensing approval. In the European Union, licensing approval is delegated by the European Union Council to individual countries on a rotation basis. If the drug is approved, it still is not licensed until other countries’ government pharmaceutical licensing boards within the European Union have had the opportunity to object. The stages of human experiments are typically conducted in hospitals and clinics in developed countries since in practice stages 2 and 3 are the beginning of the marketing of the potential drug.
Countries compete to have drugs tested within their borders since this generates employment and income in that country. This can generate an attitude of sympathy of national pharmaceutical licensing boards to drug experimenters in order to avert the risk of the experiments shifting to other countries. In the US, from the 1970s, there has been in a dramatic decline in the proportion of independent government initiated and overseen trials, a rise in the proportion of industry-sponsored reports on drug effects in medical journals, and a rise in the proportion of approved drugs later withdrawn due to extreme adverse side-effects. While national pharmaceutical licensing boards compete in reputation to avert costly errors to firms and governments from damaging drugs being licensed, this process of protecting the general consumer operates with long lags and a marked degree of uncertainty relative to governmental desires to entice a large share of clinical trials within their borders.
The paper examines the licensing of new drugs from the viewpoint of both the license applicants and the government pharmaceutical licensing boards. It considers risks and chances that can be generated by distinct cultures and practices of licensing boards, with a focus on those in Europe, the US and Canada. It employs the lens of the Stages of Knowledge Ahead theory of choice under risk and uncertainties to delineate the evolution of these risks through the various experimental stages, and their possible effects.