Orange Book: also known as the Approved Drug Products with Therapeutic Equivalence Evaluations, the Orange Book contains detailed information on all approved drugs and must list all extant patents.

Orphan Drug: a drug that treats a disease that affects less than 200,000 Americans or for which there is no reasonable expectation that the cost of research and development will be recovered from sales in the United States. The Orphan Drug Act provides special incentives for producers of orphan drugs.

Phase I: clinical trial designed primarily to determine the safety of an experimental drug.

Phase II: clinical trial that evaluates an experimental drug’s safety, assesses side effects, and establishes dosage guidelines.

Phase III: clinical trial designed to verify the safety and effectiveness of an experimental drug. Success in Phase III trials can lead to marketing approval.

Phase IV: post-approval clinical trials used to monitor safety and efficacy or examine additional applications of drugs.

Pioneer (brand-name) drug: the patented version of a drug. Contrast with generic drugs, the competing versions produced when pioneer patents expire.

Preclinical studies: studies that test a drug on animals and nonhuman test systems. Safety information from such studies is used to support an investigational new drug application (IND).

Salami slicing: filing for multiple orphan drug designations on the same drug.

Small-molecule drug: a drug produced using defined chemical synthesis or extraction. Contrast with biologics, drugs produced by biological processes.

Surrogate marker: an indirect measure of effectiveness, such as a laboratory test or tumor shrinkage, used to show a strong potential for effectiveness in accelerated drug approval.


Alliance: agreement between two or more companies to cooperate in some way.

Angel investor: wealthy individual who personally provides startup capital to very young companies to help them grow.

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