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There are three stages of clinical trials. Phase I trials enroll a limited number of people. They normally center around the correct dosage and relative safety of a particular drug. Phase II trials enroll more people and are used to determine if the new drug actually works against a particular illness. Phase III trials are the final phase before a drug is approved for treating a disease. During Phase III, the new drug is compared against the existing treatment. The goal during Phase III is to prove the new drug is a more effective treatment.

Sources:
http://clinicaltrials.gov/ct2/home

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