Question

The most important step in the development of prescription drugs is obtaining approval for the drug to be prescribed by physicians nationwide. In the U.S., the Food and Drug Administration (FDA) requires pharmaceutical companies to perform statistical testing on a number of factors related to safety and effectiveness of drugs. Recently, a pharmaceutical company submitted their findings of the possible side effects (e.g., dizziness, stomach upset) for an arthritis drug using a sample of 1500 patients. Based on the analysis, FDA officials concluded that the drug was generally safe for use in the general population of arthritis patients. This conclusion is an example of

a) cost-volume-profit analysis

b) cost/benefit analysis

c) SWOT (strengths, weaknesses, opportunities, threats) analysis

d) inferential statistics

e) descriptive statistics

Answer 1

This conclusion is an example of inferential statistics. Inferential statistics uses a random sample from the data to make inferences about the population using statistical tests like hypothesis testing, correlation analysis etc.The random sample should still be of a sufficient Quantity to make sure that our results from the test can be considered valid for the whole population. Here we can see that the company submitted their findings for an arthritis drug using a sample of 1500 people. Based on their sample analysis, FDA officials concluded that the drug was generally safe for use.

This is not an example of descriptive statistics because descriptive statistics is only summarising our data. Obtaining approval of a drug is an extremely important step and fda will not conclude it to be safe just based on desriptive statistics (graphs), they look at inferential statistics to deem it to be safe for use.