In pharma, project teams are often reluctant to recommend termination of their projects.
The reluctance to terminate the development of a potentially successful product may be exacerbated by a number of cognitive biases:
- Decisions to terminate projects are often viewed as losses and project teams tend to be loss averse.
- Teams may commit the sunk costs fallacy in arguing that a project is close to completion and terminating the project would mean the loss of investment already lost.
- Teams may find it difficult to take into account prior information – such as the low probabilities of success – when making decisions.