In my last blog I mentioned there has been a dramatic upswing in the use of risk analysis and Monte Carlo software in clinical trials for new drugs.  A new unpublished paper by Todd Clark of VOI Consulting makes clear some of the reasons more people in the pharmaceutical industry are turning to operational risk software to guide them in setting up trials.   

 

First of all, a clinical trial is probably not one trial but a process involving a series of trials, each of which takes a number of years and millions of dollars to complete.  This process takes place before the company even presents the drug to the FDA for approval.  Then, as the U.S. Government Accountability Office, points out, the FDA eventually approves only 1 in 10,000 compounds a safe and effective.  No wonder–again according to the GAO–"the number of new drugs being produced has generally declined while research and development expenses have been steadily increasing."

 

Although there are enormous profits to be made if a drug developed for a large number of patients is approved, there are great sums of money to be lost and many tricky decisions to be evaluated along the way to successful product strategies.  As Clark points out, even the planning of a single clinical trial is itself fraught with uncertainty: How many subjects?  What kind of subjects?  What kinds of physicians?  Where to hold the trials?  And the answer to each of these questions is in turn a balancing out of numerous variables.

 

So there’s plenty of risk to go around.  But potentially plenty of reward.  Just made for risk assessment with Monte Carlo.