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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.

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