DP13836 Why So Many Significant Phase III Results in Clinical Trials?

Author(s): Jerome Adda, Christian Decker, Marco Ottaviani
Publication Date: July 2019
Date Revised: November 2019
Keyword(s): Clinical trials, Drug development, Economic incentives in research, p-Hacking, Selective reporting
JEL(s): D8, O3
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13836

Planning and execution of clinical research and publication of results should conform to the highest ethical standards, given that human lives are at stake. However, economic incentives can generate conflicts of interest for investigators, who may be inclined to withhold unfavorable results or even tamper with the data. Analyzing p-values reported to the ClinicalTrials.gov registry with two different methodologies, we find suspicious patterns only for results from trials conducted by smaller industry sponsors, with presumably less reputation at stake. First, a density discontinuity test reveals an upward jump at the classical threshold for statistical significance for phase III results by small industry sponsors, suggesting some selective reporting. Second, we find an excess mass of significant results in phase III compared to phase II. However, once we link trials across phases, we can explain almost completely this excess mass for large industry sponsors by accounting for the incentives to selectively continue from phase II to phase III. In contrast, for trials sponsored by small pharmaceutical companies, selective continuation of trials economizing on research costs only explains less than one third of the increase in the share of significant results from phase II to phase III.