In order to get a medication approved for the treatment of a condition, there is a need for the company to show that it is both effective and safe. Prior to this requirement medications were often released onto the market that were neither. Although the examples of medications lacking safety such as thalidomide are what most people remember, an ineffective medication can be just as dangerous. Many people have died due to ineffective medication for conditions such as heart disease, diabetes and cancers. Many more have suffered side effects for medications that were of no benefit.
To prevent this, pharmaceutical companies must now produce ample evidence of their medications safety and effectiveness before the Australian government will allow it to be prescribed by a doctor. They of course do laboratory and animal testing initially to determine if the medication appears safe but this is not always a good predictor of how medication will work in humans
As such they must move on to the clinical trial phase where they determine if the medication is safe and effective in humans. This is a long process that starts with a small group of highly monitored subjects and then moves to larger groups of subjects who are checked less regularly as the medication is proven to be safe and effective. An ethics and regulatory committee assures that subjects participating in clinical trials are safe.
The clinical trial phase usually takes years to be completed and may continue even after the drug is available for prescription. By the time it is finished we know that the medication is effective, how effective it is in comparison to other medications that are available, if there are any groups that should not be taking it and what the side effects of the medication are.