You are the head of the Food and Drug Administration (F.D.A.), in charge of deci

Question

You are the head of the Food and Drug Administration (F.D.A.), in charge of deciding whether new drugs are effective and should be allowed to be sold to people. A pharmaceutical company trying to win approval for a new drug they manufacture claims that their drug is better than the standard drug at curing a certain disease. The company bases this claim on a study in which they gave their drug to 1000 volunteers with the disease. They compared these volunteers to a group of 1000 hospital patients who were treated with the standard drug and whose information is obtained from existing hospital records. The company found a "statistically significant" difference between the percentage of volunteers who were cured and the percentage of the comparison group who were cured. That is, they did a statistical hypothesis test and rejected the null hypothesis that the percentages are equal. As director of the F.D.A., should you permit the new drug to be sold? Explain your reasoning in three or less sentences.

Explanation / Answer

As per statistical hypotheses we have test the claim that mean number of people getting cure using new drug is higher than the standard drug. Doing the test we get that we reject the null hypothesis of equality hence concluded that mean is really higher which proves that new drugs is effective. Based on this I would permit the new drug to be sold.

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