This is the second of a two-part series on drug development inefficiencies: Part I | Part II

In Part I of this article, we discussed the magnitude of drug development inefficiency. With the cumulative, mind-boggling amount of money and resources dedicated to drug development, it is hard to believe that fewer than 50 new drugs get approved every year. So why is drug development so inefficient?

Sure, FDA requirements for establishing definitive statistical proof of efficacy and safety play a role. The complexity of the diseases and patient-to-patient physiologic variability don’t help.

But there is an even more insidious reason for drug development inefficiency. It is hard to prove and the only data available are those related to the poor performance as stated in the previous post. So what am I talking about?

Drug company "pipeline promises" that provide talking points for company executives and help rationalize investment (artificially bolster stock price) also disguise the inherent conflicts of interest that preserve otherwise unnecessary high-paying jobs.

In other words, more compounds in clinical trials rationalizes more investment (higher stock price) and justifies the need for specialized employment (drug development expertise) for a lot of people. Pipeline promises fund projects and people working on the "winners" but also disproportionately increase the need to support the 90 percent of compounds that will never make it.

Think about it. How do pharma and biotech executives get investors excited about their companies? Pipeline promises. And despite some companies professing to kill losers quicker (mostly in early preclinical development), how do executives keep investors interested and how do clinical drug development teams stay employed? By keeping clinical development programs and projects alive.

By the way, this is not just a Big Pharma or Big Biotech issue. Cash- and investment-starved smaller biotech companies may actually be more vulnerable to pushing drugs into the clinic faster and keeping low-probability-of-success compounds in development as long as possible.

My bottom line is that somebody working on the 90 percent of compounds destined to fail must have some insight into the fact that the compound has a low probability of success and won't be safe and effective enough to warrant approval.

It is just hard to believe that with all the scientific expertise and horsepower dedicated to these failing compounds, nobody involved can or has determined they have a compound that shouldn't be in or remain in clinical trials. Drug development inefficiencies keep a lot of people employed in well-paying jobs.

So, here's my take on this: Many drug development inefficiencies are inevitable, especially when jobs and compensation are at risk. This includes the CEO and executive team (not just R&D leadership) compensation, which are at risk when projects fail and pipelines thin. If we kill this project, our stock price will tank, we won't get our bonuses, my leadership will be questioned, my team will be labeled "failures," and we won’t have jobs for long.

Nobody is talking about this or would ever admit it, but it is hard to explain the incredible numerically-documented inefficiencies of drug development. How many compounds do you think are in drug company development pipelines that research teams know have little or no chance for approval?