Why does making a new drug get more expensive even as the tools improve?

Because the problem was never only about technology. Eroom's law is the observation that drug discovery is becoming slower and more expensive over time, despite improvements in technology such as high-throughput screening, biotechnology, combinatorial chemistry and computational drug design. The inflation-adjusted cost of developing a new drug roughly doubles every nine years. The name is Moore's law spelled backwards, chosen to contrast with the exponential progress of technologies such as transistors. It was coined by Jack Scannell and colleagues in 2012.

Scannell and colleagues named four main causes. The first is the "better than the Beatles" problem: new drugs often offer only modest benefit over successful existing ones, so bigger trials are needed to show the same efficacy. Pop music would have the same trouble if every new song had to beat the Beatles. The second is the "cautious regulator", whose lower risk tolerance makes development costlier and harder. The third is the "throw money at it" tendency, which adds resources and may lead to overruns. The fourth is a bias towards basic research and brute force screening: shifting from whole-animal testing to approaches that find drugs binding a target tightly, which still often fail in trials because the complexity of the whole organism was under-appreciated.

Not everyone agrees on the diagnosis. Some suspect that the easy targets are gone, but there may be many decades' worth of new potential drug targets still unexploited. A rival hypothesis is that the pharmaceutical industry has become a bureaucratic oligopoly, with reduced innovation and efficiency.

Whatever the cause, the cost is real. A 2016 review put the capital spent for a drug approved through Phase III at $2.6 billion, rising at 8.5% a year, though cost estimates differ widely by method.