At one time, the drug development process had three phases. Then, Phase IV, post-marketing surveillance, became part of the picture. But that has done nothing to prevent late-stage Phase III failures and recent high-profile, postrelease Phase IV failures of drugs such as Vioxx because of adverse side effects. "It is well known that the approval rate for innovative new drugs is declining," says Dr. David Jacobson-Kram, associate director for Pharmacology and Toxicology at the Food and Drug Administration's Center for Drug Evaluation and Research (CDER) in Silver Spring, Md. "Additionally, development costs for new drugs are rising dramatically. A large factor in the increased costs is that many drugs are failing late in development [Phase III trials]."