Phase I: tests the drug on healthy human volunteers to test for side effects, rates of passage (half-life, toxicity), dosage, etc.
Phase II: to test its effectiveness on people with the particular disease.
Phase III: conducted on a large number of people to include both sexes, many age groups and ethnicities, and people with more than one health condition. From here, the FDA can approve the drug for sale.
Phase IV: tests other applications for the drug