The Graveyard of Innovation: Pharma’s Survivorship Bias

I have a confession to make: I’m fascinated by failure. Not in a morbid, schadenfreude sort of way, but in the way one might study an iceberg—not for the visible peak but for the vast, hidden bulk beneath. And in no industry is that unseen mass more significant than in pharmaceuticals, where failure is the rule rather than the exception.

We love to tell stories of triumph in pharma: billion-dollar drugs, revolutionary therapies, and biotech startups that somehow morph into unicorns. These tales, polished and primed for investor presentations, are inspiring. But they’re also misleading. For every drug that reaches the pharmacy shelf, there are thousands—yes, thousands—that never make it past the lab bench, let alone clinical trials.

This phenomenon, known as survivorship bias, distorts how we perceive success. It’s not just an oversight—it’s a systemic flaw in how we, as humans, process information. And frankly, I think it’s time we started talking about the drugs that didn’t survive.

The Pharma Graveyard

Let’s start with some numbers, because nothing says “let me ruin your optimism” like cold, hard data. The overall likelihood of a drug making it from Phase I trials to FDA approval is about 9.6%. That’s right—over 90% of drugs fail somewhere along the way.

Consider Alzheimer’s disease, the pharmaceutical equivalent of a black hole. Between 2008 and 2019, over 320 clinical trials for Alzheimer’s drugs flopped. And by flopped, I mean they ate up billions of dollars and countless hours of research only to deliver nothing. Except, of course, the occasional insight into what doesn’t work.

And yet, what do we hear about? Biogen’s Aduhelm. The one drug that squeaked through, albeit controversially, on the flimsiest of clinical evidence. It’s a bit like celebrating the one plane that landed safely after losing both wings, ignoring the fact that the rest didn’t make it.

RNAi: Failure’s Favourite Success Story

Ah, RNA interference (RNAi). The darling of molecular biology. These therapies are now celebrated for their potential to treat rare genetic diseases, with Alnylam’s Onpattro leading the charge. But this success was built on a mountain of failed attempts.

Big names like Merck and Novartis poured millions into RNAi programs, only to shut them down when the science proved trickier than anticipated. Their failures paved the way for Alnylam’s eventual success, but you’ll rarely hear about that.

Taleb Would Have a Field Day

If Nassim Nicholas Taleb were here, he’d likely roll his eyes and mutter something about "silent evidence." In Fooled by Randomness and The Black Swan, Taleb argues that we are hopelessly bad at accounting for the things we don’t see—what he calls the "graveyard of silent evidence." And in pharma, that graveyard is vast.

Taleb’s critique is particularly relevant here. We love to attribute success to intelligence, hard work, or visionary leadership. But as Taleb would point out, much of it boils down to randomness. Serendipity. Luck. Fleming discovering penicillin because he left a Petri dish out. Timing a drug’s launch just as a competitor stumbles. Randomness is everywhere, yet we insist on seeing patterns where there are none.

Why Are We Like This?

Part of the problem is psychological. We’re wired to focus on positive stories—they’re easier to process, more uplifting, and let’s face it, they sell better. Nobody wants to fund the guy who says, “Here’s how I failed spectacularly.”

This bias is reinforced by the incentives of the industry. Pharma companies are in the business of making money, and failure doesn’t exactly inspire confidence. Investors? They prefer to hear about the next Moderna, not the nine biotech startups that ran out of cash before their first trial. And the media? Success stories are clickbait. Nobody Googles “ten most catastrophic clinical trial failures.”

The Consequences of Ignoring Failure

The result of all this positivity is a warped perception of the risks and rewards in pharma.

1. Investors Get Misled
   Biotech investment is already risky business. Survivorship bias makes it worse by creating unrealistic expectations. Venture capitalists chasing the next Alnylam or BioNTech often underestimate the high attrition rates in drug development.
2. Science Loses Out
   Failures are rich with data—failed trials can teach us about patient subgroups, off-target effects, and mechanisms of action. But because they’re rarely published, the same mistakes get repeated, wasting time and resources.
3. Public Perception Gets Skewed
   The public sees the success stories—Pfizer’s vaccine, Gilead’s remdesivir—and assumes pharma innovation is rapid and inevitable. They don’t see the years of painstaking research, dead ends, and shattered hopes that precede these breakthroughs.

A Modest Proposal: Embrace the Failures

If you’ve made it this far, you might be thinking, “Alright, so what’s the solution?” Frankly, I’m not here to solve pharma’s PR problem. But I will say this: it’s time we started celebrating failure—not as an end, but as part of the process.

Failure is where the learning happens. It’s where science advances, slowly and painfully, toward the truth. Ignoring it doesn’t just distort our understanding of the industry—it does a disservice to the people doing the work. So next time you hear about a blockbuster drug, spare a thought for the hundreds of candidates that didn’t make it. They’re the real heroes of this story.

To paraphrase Taleb:

“You are looking at the survivors and winners. But the graveyard of failed ideas, failed companies, and failed drugs is what you must understand to see the full picture.”