FIGURE 1 | Eroom's Law in pharmaceutical R&D.

a | The number of new drugs approved by the US Food and Drug Administration (FDA) per billion US dollars (inflation-adjusted) spent on research and development (R&D) has halved roughly every 9 years. b | The rate of decline in the approval of new drugs per billion US dollars spent is fairly similar over different 10-year periods. c | The pattern is robust to different assumptions about average delay between R&D spending and drug approval. For details of the data and the main assumptions, see Supplementary information S1 (table) and Refs 24,86,87. Note that R&D costs are based on the Pharmaceutical Research and Manufacturers of America (PhRMA) Annual Survey 2011 (Ref. 86) and Ref. 87. PhRMA is a trade association that does not include all drug and biotechnology companies, so the PhRMA figure understates R&D spending at an industry level. The total industry expenditure since 2004 has been 30–40% higher than the PhRMA members' total expenditure, which formed the basis of this figure. The new drug count, however, is the total number of new molecular entities and new biologics (applying the same definition as Munos24) approved by the US FDA from all sources, not just PhRMA members. We have estimated real-term R&D cost inflation figures from Refs 24,87. The overall picture seems to be fairly robust to the precise details of cost and inflation calculations. Panel a is based on a figure that originally appeared in a Bernstein Research report (The Long View — R&D productivity; 30 Sep 2010). *Adjusted for inflation. PDUFA, Prescription Drug User Fee Act.

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