An indication for a drug is really an administrative approval by a regulatory authority (in the United States, the FDA) for a company to market and sell a product for a specific clinical need. To establish efficacy in treating psychiatric illness, the FDA has generally required statistically significant results in trials. Generally the requirement has been for more than one statistically significant study outcome, although there have been exceptions to this rule. Historically, indications have revolved around syndromes (e.g., treatment of major depression or schizophrenia). More recently, the FDA has shown greater flexibility with approvals for drugs to treat symptom dimensions—e.g., agitation—that transcend underlying syndromes.

The population to be sampled is a matter of some importance because one cannot generalize the result beyond the population the sample actually represents. Thus, for example, a study that samples alcoholic patients but excludes those with comorbidities will generate a sample that represents a small fraction of the population with that disorder (Humphreys and Weisner 2000; Humphreys et al. 2005). Whether or not some advantage is found for T over C in such a nonrepresentative subpopulation gives little insight as to whether that same advantage pertains in the majority of people with the disorder.

The choice of population to be sampled is also crucial to differentiating efficacy from effectiveness. Efficacy refers to the extent to which T produces a beneficial result under ideal conditions; effectiveness refers to the extent to which T produces a beneficial result when used as it would be in actual clinical practice (Hoagwood et al. 1995). Both issues are best addressed with RCTs. One crucial difference between RCTs geared toward establishing efficacy and those geared toward establishing effectiveness is the population that the RCT researchers choose to sample. RCTs directed more toward establishing efficacy usually set very narrow inclusion/exclusion criteria, focusing on the subpopulation of patients with the disorder who are most likely to comply and to respond well. In contrast, RCTs directed more toward effectiveness try to use patients who are representative of all those with the disorder who might benefit from that treatment for their disorder. The primary reason for exclusion from effectiveness RCTs is usually that there is some reason to believe that either T or C is contraindicated (e.g., pregnancy excludes women in many drug studies) or the patient is unwilling to sign an informed consent form. Because the sample in an efficacy study is chosen to be more compliant and responsive, and is typically more homogeneous than that in an effectiveness study, sample sizes are likely to be much smaller than those in an effectiveness study, and effect sizes much larger.

The earliest studies of a particular drug are likely to be efficacy studies in order to establish that the drug works at least under optimal conditions. For pivotal studies, hypotheses are stated a priori. Generally, these take the form that a tested treatment will be superior to a comparator in reducing a given set of symptoms over a specific duration of treatment. A statistical analysis plan is developed to test the a priori hypothesis. The most influential studies on clinical practice, however, are likely to be effectiveness studies, for they inform clinicians about which treatments might benefit the patients they are likely to see.

Clinical development of psychiatric agents is such that approval for indications are usually for adults (i.e., over the age of 18 years) and for both sexes. Specific additional approvals can be sought for children and the elderly. Obviously, in disorders that occur primarily in childhood (e.g., attention-deficit/hyperactivity disorder), studies may begin with youths.

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