Underperforming the Market: Why Researchers are Worse than Professional Stock Pickers and A Way Out

I was reading in the NYT yesterday a story about Warren Buffet and how the Oracle of Omaha has trailed the S&P 500 for four of the last five years.  It was based on an analysis done by a statistician who runs a blog called Statistical Ideas, which has a post on p-values that links to this Nature article a couple of months back that describes how we can be misled by P-values.  And all of this got me thinking.

We have a dual problem in medical research:  a.)  of conceiving alternative hypotheses which cannot be confirmed in large trials free of bias;  and b.) not being able to replicate the findings of positive trials.  What are the reasons for this?

Why Most Clinical Trials Fail: The Case of Eritoran and Immunomodulatory Therapies for Sepsis

The experimenter's view of the trees.

The ACCESS trial of eritoran in the March 20, 2013 issue of JAMA can serve as a springboard to consider why every biological and immunomodulatory therapy for sepsis has failed during the last 30 years.  Why, in spite of extensive efforts spanning several decades have we failed to find a therapy that favorably influences the course of sepsis?  More generally, why do most clinical trials, when free from bias, fail to show benefit of the therapies tested?

For a therapeutic agent to improve outcomes in a given disease, say sepsis, a fundamental and paramount precondition must be met:  the agent/therapy must interfere with part of the causal pathway to the outcome of interest.  Even if this precondition is met, the agent may not influence the outcome favorably for several reasons:

• Causal pathway redundancy:  redundancy in causal pathways may mitigate the agent's effects on the downstream outcome of interest - blocking one intermediary fails because another pathway remains active
• Causal factor redundancy:  the factor affected by the agent has both beneficial and untoward effects in different causal pathways - that is, the agent's toxic effects may outweigh/counteract its beneficial ones through different pathways
• Time dependency of the causal pathway:  the agent interferes with a factor in the causal pathway that is time dependent and thus the timing of administration is crucial for expression of the agent's effects
• Multiplicity of agent effects:  the agent has multiple effects on multiple pathways - e.g., HMG-CoA reductase inhibitors both lower LDL cholesterol and have anti-inflammatory effects.  In this case, the agent may influence the outcome favorably, but it's a trick of nature - it's doing so via a different mechanism than the one you think it is.