This pretty much captures the pharmaceutical model. Most drugs in trial never make money. It is the blockbuster drugs that make most of the profit for the pharmaceutical companies.
R&D costs are where the bulk of the price tag comes from. These costs have increased exponentially over time, way ahead of inflation. The lag time for decisions and the resulting impacts is in many cases a decade or more.
Maybe Pharmaceutical companies should be scrutinizing their decisions more wisely, if they plan on recouping their R&D costs for failed drugs from the successful drugs. Fewer drugs will be made, but also more people would be able to afford the true cost of the drug.
Drug development once it's beyond the discovery of the compound, and animal models typically consists of three stages. The first stage is on healthy humans to establish safe dosages, and to collect toxicology data. Stage two is where the drug is given to patients with the intended disease to combat. It includes more people than stage one.
Stage three is where the bulk of the cost comes from, though the probability of the drug progressing from this stage to successful application of a new drug, is roughly the same for stage two to three progression. So, it stands to reason that perhaps the investigators should use far more conservative statistics at this stage to elucidate successful results, especially since the costs of conducting a stage three trial, which includes multiple facilities around the country/continent/world, re so staggeringly high.
Maybe if policy makes the bottom line tougher to swallow, the research teams won't be so gung ho to move onto new trials with marginal results. Of course this has to be weighed against the particular disease that the drug targets.
