Many new medicines are discarded for reasons that have nothing to do with safety and efficacy. Consultants have, for example, where the prospects looked poor, suggested killing drugs for brain cancer, ovarian cancer, melanoma, hemophilia, and other important conditions.11 Even though millions of dollars may have already been spent, these consultants would never recommend that a company knowingly proceed on a path toward losing more money unless some other crucial non-financial objective was being achieved. For more information about the pharmaceutical industry, see the EconTalk podcast episodes Angell on Big Pharma, Robin Feldman on Drug Patents, Generics, and Drug Wars, and Richard Epstein on Property Rights and Drug Patents. See also “Pharmaceuticals: Economics and Regulation” by Charles L. Hooper in the Concise Encyclopedia of Economics. This is where the FDA becomes important: the more stringent the FDA’s requirements, the more drugs cost to develop and the lower their probability of approval becomes, meaning that more of them end up on the cutting room floor. - www.econlib.org