Capsules are more expensive and can’t be easily split by patients so pills are generally preferred by manufacturers. Reasons to use capsules:

  - they protect the medicine better from light and moisture and oxygen than tablets
  - powder in capsules dissolves faster, more evenly and thus the dose can be frontloaded instead of spread out
  - beads in capsules can be coated to control dosage rates or deliver one medication before another. I.e. if the active drug irritates the stomach a coating can counteract that or keep it from dissolving until it reaches the intestines. Extended release medications usually use these coatings to slow down absorption
  - capsules can carry multiple physically separated chemicals that are too reactive to be allowed to touch
  - the binders in the pill interfere with the medication
  - capsules can mask the taste better

Different speeds of action, different densities of medicine, shelf lives, etc. Form follows function and all that.

There are many factors that go into that decision.

First and foremost is the way to deliver the _active substance_. Can be immediate (pills are not the best for immediate delivery), delayed (most common) or extended release (e.g. the AS gets released in doses over a period of time).

Capsules IIRC can only deliver immediately but AS on capsules has faster absorption compared to pills.

Cost is another factor: AFAIK pills are usually cheaper - although I don't work at the industry so don't quote on me on this.

So it's the way you want to be delivered, characteristics of the AS, cost, etc.

source: I have a 5-year degree (EU) in Pharmaceutical Sciences.

Sometimes half a pill comes in a capsule!

If you look closely the content of a capsule is lots of tiny pills...