Article at a glance:

Why drugs fall short in late-stage trials

• The third and last stage of clinical testing is meant to confirm that medications under development are safe and effective. However, McKinsey research finds that 42 percent of drug candidates do not surmount this hurdle. Worse, fully half of the failures were caused by a lack of efficacy.
• Two factors were tied to these failures: the novelty of the biological pathways involved and the way the researchers defined their clinical results.
• Pharmaceutical companies should rethink their approach to the development of drugs, segment those in their pipelines by risk, and eliminate poorly designed incentives that reward bad decisions.