Journal Club: Revisiting Eroom's Law
With @jorgecondebio @vijaypande and @lr_bio On this special holiday weekend edition of the a16z bio Journal Club we discuss a recent opinion article suggesting the end of Eroom’s Law—the decades long trend in biopharma R&D towards higher and higher costs per new drug—and our take on the big trends in this space.
The a16z Show · Vijay Pande, Jorge Conde, Lauren Richardson
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Show Notes
Eroom’s Law is Moore’s Law spelled backwards. It’s a term that was coined in a Nature Reviews Drug Discovery article by researchers at Sanford Bernstein and describes the exponential decrease in biopharma research and development efficiency between the 1950s and 2010. Whereas Moore’s describes technologies becoming exponentially faster and cheaper over time, Eroom’s Law describes the trend of drug development becoming exponentially more expensive over time.
The article describing Eroom’s Law was published in 2012, and analyzed data up till 2010. That is perhaps ironic as 2010 appears to be an inflection point in the trend. In Breaking Eroom’s Law, the authors analyze the data since 2010 and show that costs appear to have stabilized over the last ten years. But what has contributed to this critical and exciting trend shift? In our conversation, Jorge and Vijay discuss the three causes cited by the authors of the Breaking Eroom’s Law article, their views on what technologies and policies will continue to push costs down, and their opinion on whether Eroom’s Law is broken for good.
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