Many comments so far seem to try to handwave away the 90 % failure as somehow "optimal" in the system, which seems absurd to me. It is clearly not advantageous for individual companies to keep a drug candidate alive long enough for it to fail in stage III or IV. One obvious question is why they don't and it is very, very tempting to speculate that it's because the problems are getting harder, we are targeting novel m…
Sure, but Pharma A is full of career managers who never kill drugs under development and Upstart B relentlessly culls drugs that don't work early on. Upstart B's failure rate at the final stages is under 50% so they develop 5 times as many drugs, beating the existing company, and indeed all other drug companies. Since this isn't happening, it seems this might not be the explanation.
It is not software development where you can start a project every month see how it goes and drop it or pivot.
I guess they use a lot of computer aided models before they even start serious parts but I believe this discussion is not about failure rates on that stage because then it would be 99%