There's an alternative that is slowly emerging. Many clinical trials "fail" but the drug candidate in question works really well for identifiable subsets of the participants. Right now pharma companies won't bother pursuing those drugs because they can't market it broadly. But it's still possible these drugs could help people in the future.

Not really an alternative if you can't predict who those candidates are prior to spending a hundred million dollars putting the drug into a broader group of people and then retroactively saying "oh wait now we can 'identify' who it works in."

If they could do that today, they would. Trial criteria are already incredibly narrow specifically to try to encode as much of this knowledge as the company has prior to starting the trial. But it empirically turns out they don't have nearly enough to matter.

It's really not a problem that pre-filtering to that responders group produces too small a market. There are plenty of drug programs going after way-too-small markets because of all these wacky perverse incentives created by insurers and regulators to incentivize the creation of billion-dollar++ drugs for diseases virtually no one has.