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How do pharmaceutical companies organize clinical trials?

purity muriuki



pharmaceutical companies

There has been a lot of talk about pharmaceutical companies in recent years, especially in the United States, but there has also been a lot of disinformation about the kind of work that they do.

In this article, we’ll explore how pharmaceutical companies fund clinical trials, how these clinical trials actually work, and who pharmaceutical companies work with – including universities such as UCL, organizations such as the FDA, and facilitators such as Clinical Ink.

What is the core purpose of the clinical trial process?

The main point of a clinical trial is to explore whether a new medical treatment is safe and fit for purpose. This process usually begins with preclinical trials in which the treatment is tested on samples and then on animals. If the treatment appears to be safe and effective, the process can then move on to human clinical trials.

Human focussed clinical trials are operated in the following three phases:

  • In Phase 1 trials, a small sample group of people is given the new treatment to see if it is safe.
  • In Phase 2 trials, a bigger group of people is given the new treatment to see if it is effective.
  • In Phase 3 trials, a final, even larger group of people is given the new treatment to confirm how safe and effective it is.

What is involved in a clinical trial?

Before a new drug can be made available to the public, it must first go through a series of clinical trials. Clinical trials are intended to see how effective and safe new drugs are before they are released to patients. They are conducted by independent research organizations such as universities, hospitals, and third parties.

The first stage of clinical trials is known as Phase 1. In this phase, the new drug is given to a small group of healthy volunteers to see if it is safe.

If the drug is found to be safe in Phase 1, it will move on to Phase 2. In this phase, the drug is given to patients who have the condition that the medication is intended to treat. The goal in Phase 2 is to see if the drug effectively treats the condition.

If the drug is found to be effective in Phase 2, it will move on to Phase 3. In this phase, the drug is given to a large group of patients to confirm its effectiveness and assess any side effects.

Once a drug has successfully completed all three phases of clinical trials, it can be approved for use by the general public.

What are the finances involved in clinical trials?


The first thing to understand is that pharmaceutical companies do not operate clinical trials themselves. Pharmaceutical companies will work with outside agents to run these trials on their behalf. They usually partner with third-party organizations called Contract Research Organizations, though we’ll refer to them moving forward as CROs.

The second thing to understand is that pharmaceutical companies do not pay for clinical trials directly; instead, the funding for these trials is provided through grants and other incentives. The CROs that they work with are responsible for conducting the trials and are imbursed, or repaid, via these grants and other means of funding.

The third thing to understand is that clinical trials are not just conducted by pharmaceutical companies. Universities, hospitals, and other research bodies also conduct clinical trials. In fact, most clinical trials are conducted by research institutions rather than by pharmaceutical companies.

The fourth thing to understand is that pharmaceutical companies are not the only ones who can benefit from clinical trials. Patients who participate in clinical trials can also benefit from the knowledge gained from these studies, as well as the generous compensation packages offered to the volunteers who apply to join the project.

The fifth thing to understand is that clinical trials do not always work in the way companies hope they will. In fact, many clinical trials fail to produce the desired results. That being said, even when a trial fails, it can still provide valuable information about a particular disease or condition, and this can sometimes be just as beneficial.

On the whole, it’s key to remember that pharmaceutical companies play a very significant role in the development of new drugs and treatments. Without their participation, many life saving treatments would never be developed, and as a result, many people would be unable to access these sometimes life-changing treatments.

How do pharmaceutical companies fund these clinical trials?


Pharmaceutical companies fund the vast majority of clinical trials; they will often fund both Phase 1 and Phase 2 trials, but they will almost always fund Phase 3 trials.

Pharmaceutical companies fund clinical trials because they stand to make a lot of money if their new drug is approved for use by the general public. Therefore, it is in their best interest to ensure that their new drug goes through all three phases of clinical trials successfully and is then rolled out on a national or global scale.

Pharmaceutical companies do not usually conduct their own clinical trials because it would be very expensive for them to do so. It costs millions of dollars to conduct a single clinical trial. Most pharmaceutical companies have multiple new treatments in the trial phase at any given point, meaning that the costs can add up substantially.


I'm a passionate full-time blogger. I love writing about startups, how they can access key resources, avoid legal mistakes, respond to questions from angel investors as well as the reality check for startups. Continue reading my articles for more insight.

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