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Journal Club: Revisiting Eroom’s Law | a16z

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Key Takeaways

  • 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. 
  • “I think that COVID will have the impact of accelerating the future in terms of modernizing how we think about running the appropriate studies for therapies to patients safely and effectively, but also quickly” – Jorge Conde
  • Even flattening Eroom’s Law would be a major accomplishment for the industry

Intro

  • This conversation includes:
    • Jorge Conde (@JorgeCondeBio) is a General Partner at Andreessen Horowitz where he leads investments at the cross section of biology, computer science and engineering
    • Vijay Pande (@vijaypande) is a general partner at Andreessen Horowitz, where he focuses on investments in biopharma and healthcare
    • Lauren Richardson (@lr_bio) is the host of the a16z bio Journal Club

Eroom’s Law

  • 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

Additional Notes

  • There is now more data and better resolution than ever before
    • We now have the ability to go down to the resolution of a single-cell level
  • Advanced computational abilities mean not only better information but better insights
    • Machine learning and AI will help scientists better understand data and make better decisions
      • This will result in a decrease in the cost of drugs and an increase in our understanding of biology
  • “I think that COVID will have the impact of accelerating the future in terms of modernizing how we think about running the appropriate studies for therapies to patients safely and effectively, but also quickly” – Jorge Conde
  • Even flattening Eroom’s Law would be a major accomplishment for the industry
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Notes By Alex Wiec

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