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I'm interested to hear more. Cherry picking of data for which drugs to pursue, I had always assumed was focused on trying to push the most viable drug through to see if the benefits could outweigh the risks, costs, etc. For example, many cancer drugs come with insane side effects but they also offered the best benefits. The side effects could have disqualified the drug early in the process, but it was still worthwhile to see that there is something there that helps. My understanding is it goes like this: we found a drug that can cure cancer 40% of the time, but there's a 50% risk of liver failure. These are fake numbers, but they likely know most of this before sending it through clinical trials, but they also know that someone literally in agony and about to die from this particular cancer would be glad to take those odds. From there, it should open up the door to more focus on the positive results as more are cured from the disease even if it causes liver failure in the select few that were about to die and took the risk.
I'm not sure I follow your conclusion that there's more incentive to almost pass than to have nothing? That's generally the expectation everywhere: show you're doing something. What leads you to say this is different in biotech and what is it harming?
The fudging numbers part is really the most alarming, but that would only go so far. The FDAs needs to approve it, and I was under the impression that's done independently. So if a drug company wants to waste money trialing things that won't get approved, that's just a loss of money to run the program and trials and would have no net gain unless they're looking to uncover problems they can work out on a new drug.
I don't work in biotech, so I'm hoping you can elaborate a bit more if my trust is misplaced.