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Updated: Nov 5, 2025

Inverse Probability of Treatment Weighting Propensity Score using the Military Health System Data Repository and National Death Index
Published on: January 8, 2020
Selection bias, investment decisions and treatment effect distributions
Stig Johan Wiklund1, Carl-Fredrik Burman2
1Captario, Gothenburg, Sweden.
Abstract:
When making decisions regarding the investment and design for a Phase 3 programme in the development of a new drug, the results from preceding Phase 2 trials are an important source of information. However, only projects in which the Phase 2 results show promising treatment effects will typically be considered for a Phase 3 investment decision. This implies that, for those projects where Phase 3 is pursued, the underlying Phase 2 estimates are subject to selection bias. We will in this article investigate the nature of this selection bias based on a selection of distributions for the treatment effect. We illustrate some properties of Bayesian estimates, providing shrinkage of the Phase 2 estimate to counteract the selection bias. We further give some empirical guidance regarding the choice of prior distribution and comment on the consequences for decision-making in investment and planning for Phase 3 programmes.
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