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Efficacy is the ability to get a job done satisfactorily. The word comes from the same roots as effectiveness, and it has often been used synonymously, although in pharmacology a distinction is now often made between efficacy and effectiveness. The word efficacy is used in pharmacology and medicine to refer both to the maximum response achievable from a pharmaceutical drug in research settings, and to the capacity for sufficient therapeutic effect or beneficial change in clinical settings.
In pharmacology, efficacy (Emax) is the maximum response achievable from an applied or dosed agent, for instance, a small molecule drug. Intrinsic activity is a relative term that describes a drug's efficacy relative to a drug with the highest observed efficacy. It is a purely descriptive term that has little or no mechanistic interpretation.
In order for a drug to have an effect, it needs to bind to its target, and then to affect the function of this target. The target of a drug is commonly referred to as a receptor, but can in general be any chemically sensitive site on any molecule found in the body. The nature of such binding can be quantified by characterising how tightly these molecules, the drug and its receptor, interact: this is known as the affinity. Efficacy, on the other hand, is a measure of the action of a drug once binding has occurred. The maximum response, Emax, will be reduced if efficacy is sufficiently low, but any efficacy greater than 20 or so gives essentially the same maximum response.
The definition of efficacy has been object for discussion.  The only way in which absolute measures of efficacy have been obtained is by single ion channel analysis of ligand gated ion channels. It is still not possible to do this for G protein-linked receptors.
In the case of the glycine receptor and the nicotinic acetylcholine receptor (muscle type), it has been proposed by Sivilotti et al. that opening of the ion channel involves two steps after agonist is bound. Firstly a conformation change to a higher affinity (but still shut) form, followed by the conformation change from shut to open. It was found that partial agonism results from deficiency in the first step, and that the opening and shutting steps are essentially the same for both full and partial agonists. This has been confirmed and extended by Sine and colleagues (2009). The implication of this work is that efficacy has to be defined by at least two equilibrium constants (or, more generally, by four rate constants).
It is the combined influence of both affinity and efficacy which will determine how effectively a drug will produced a biological effect, a property known as potency.
In medicine, efficacy is the capacity for beneficial change (or therapeutic effect) of a given intervention (for example a drug, medical device, surgical procedure, or a public health intervention). Establishment of the efficacy of an intervention is often done relative to other available interventions, with which it will have been compared. Specifically, efficacy refers to "whether a drug demonstrates a health benefit over a placebo or other intervention when tested in an ideal situation, such as a tightly controlled clinical trial." These studies focus to a primary parameter to be shown statistically different changes between placebo and intervention groups. Comparisons of this type are called in 'explanatory' randomized controlled trials, whereas 'pragmatic' trials are used to establish the effectiveness of an intervention regarding also non-specific parameters.
Effectiveness refers "how the drug works in a real-world situation," and is "often lower than efficacy because of interactions with other medications or health conditions of the patient, sufficient dose or duration of use not prescribed by the physician or followed by the patient, or use for an off-label condition that had not been tested."
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