In 2006, a Nature paper on Alzheimer's changed what the world thought it knew. Quickly it became the most cited Alzheimer's study of the century, redirected $1.6 billion in annual NIH funding, and spawned thousands of clinical trials. Eighteen years later, it was retracted. The images were doctored and the science was in fact, fiction.

The bill? A mere $42 billion in failed drug development. An entire generation of Alzheimer's patients without treatment. Drug giants Pfizer abandoned the space entirely in 2018, not great.

This is the story of a compounding error in a system that moves just too slowly to catch fraud and just too quickly to allocate capital based on it.

Capital follows citations

We talk endlessly about failures, entrepreneurs, companies, even sports teams. We rarely hear about science failures, however. Bad science acts like bad debt, it accumulates, it compounds, and eventually topples. Every citation of fraudulent work spawns new grants, new startups, and sometimes even new clinical trials. The Alzheimer's paper didn't just waste money on its own merits, the paper metastasized into an entire ecosystem of derivative research, all built on sand (or in this case doctored images).

The Schön scandal followed the same pattern, albeit much faster. A physicist published breakthrough semiconductor results every eight days in 2001. Hundreds of labs worldwide dropped everything to replicate his molecular transistors. And when none could, the fraud unraveled in 2002. The real cost wasn't the retractions exactly, it was the hundreds of millions spent chasing ghosts and the decade of legitimate research that got delayed or defunded because everyone was busy chasing fake results.

The trust tax

Francesca Gino's case at Harvard illustrates a different dimension of the problem. She was a tenured professor studying ethics and dishonesty, until it was discovered that she had been manipulating her own data since 2012, 140+ papers, 500+ citations. The irony is almost too perfect to believe.

But strip away the nonsense and we are actually left with a more troubling question: how many decisions (this could be corporate, hiring, product-related), were built on fraudulent findings? How do you claw back deployed capital when the research it was based on evaporates? Short answer, you don’t and the pain reverberates to those most impacted, those doing real research.

The infrastructure we need to fund

Today’s system created an environment where it's more lucrative to publish than to validate, more important to be first than to be right. Perverse incentives remain, and to be fair this is not endemic to Academia… Peer review in some cases has become a rubber stamp. When neuroscientist Matthew Schrag uncovered the Alzheimer’s research fraud, it was purely by accident. He had originally been investigating a failed drug. A random accident should not be our primary fraud detection tool, full stop.

We move forward

To quote a good friend, now, we move forward. The next trillion-dollar industries (plural) will be built on foundations being laid today, scientific foundations being laid today. If those foundations are compromised, we won't know we’ve wasted a decade and maybe hundreds of billions along with it.

Smart investors don't wait for scandals to emerge. They don't wait for breaches to invest in cybersecurity. Research integrity deserves the same treatment: not as a nice-to-have, but as critical infrastructure.

Because in a world where capital moves faster than truth, the cost of bad science isn't just wasted money. It's the innovations that never happen and the breakthroughs that never come that are the biggest travesties.