For decades, no industry has been a more reliable moneymaker than pharmaceuticals. Immune to recession, drug companies regularly score 15 percent profit margins year after year. There is no danger of market saturation and, in the U.S., little prospect of government restraint of prices. Nearly all regulatory submissions win approval, and turnaround times are steadily decreasing. If you are an investor, what’s not to like?

But all dominant and expanding industries are fueled by resources of one type or another. Some of these are tangible and obvious, like gold deposits. Their exploitation follows a familiar arc. There is an initial rush to simply pick nuggets up off the ground. When the nuggets have been picked, miners must search for pebbles, then sand, then dust. There are still fortunes to be made, but more and more capital investment is needed to separate the gold from the dross.

If you are a drug company, drug targets are your resource. Our conception of disease has progressed through many understandings — as demonic possession, humoral imbalance, blockage of chi, disordering of machinery — and has now landed on the notion that it is either an invasion by microscopic creatures or bad behavior by large protein molecules. Health is restored by poisoning the invaders or correcting the proteins.

Drugs are the agents that accomplish these goals. To a first approximation, drugs are small molecules that bind to specific large molecules. This is the one-disease, one-protein, one-drug paradigm, and it is the essential value proposition of the pharmaceutical industry. Companies identify protein targets and make drugs that alter target behavior. They are very, very good at this. So good that the supply of new drugs largely depends on the supply of new drug targets.

The number of protein molecules that are plausible drug targets is large, but far from infinite. Each of these proteins is encoded by a gene; one of the surprises of human genomics is just how few protein-coding genes there are. Pre-genome estimates assumed that creatures as complicated and exquisite as humans could not possibly be specified by less than a hundred thousand genes. The true number is closer to 19,000, a bit fewer than small worms that live in the soil.

The number of proteins encoded by these genes that have anything to do with disease is much smaller, amounting to perhaps a thousand in total. Of these, more than half have already been “mined” by pharma: a current estimate is that our pharmacopeia targets 555 proteins in total. If we knew nothing else about drug discovery and development, we would know that the pace of new drug introduction is bound to decline.

But we do know a good deal more. We know that the rate of new drug approval (about 27 per year) has held steady for the past two decades, with no sign of a bump from genomics. And we know that the clinical value of these new drugs is shrinking, even as the search and exploitation of new targets intensifies.

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We know that the cost of bringing each of these new drugs to market increases at an exponential rate. Indeed this rate, 9 percent per year, is so steady, persisting unchanged through different regulatory regimes and new technological advances, that it has been given a name: “Eroom’s Law” (Moore’s law in reverse). Nine percent may not sound like much, but it means that costs double every 8 years. In less than a decade, the cost of a new drug approval, now $2.6 billion, will be at $5 billion. In 16 years, it will be $10 billion.

The dynamics of this decline are precisely those of a gold mine. The fist-sized nuggets have all been found, the gravel and sand is getting more expensive to recover, and soon there will be nothing but dust.

Knowing this, you don’t have to have a degree in economics to figure out that the day will come when the average new drug candidate is a money loser. That day has already arrived for some drugs. Britain’s Office of Health Economics calculates that the value of new antibiotic candidates is negative $45 million. Pharmaceutical companies figured this out several years ago and most have eliminated their antibiotic R&D programs. Other R&D programs are on the chopping block.

Increasingly, the new drugs that are approved share two characteristics: (1) they are “orphan” drugs that treat limited patient populations and (2) they are obscenely expensive. Prior to the Orphan Drug Act of 1983, U.S. drug companies introduced about one orphan drug (defined as treating fewer than 200,000 patients) per year. Orphans — which include “personalized” medicines — now constitute about 40 percent of all new drug approvals and will soon be a majority. Their median price? A cool $83,000 per patient per year.

Get used to this. Moderately-priced mass-market drugs will disappear. Or rather, they will go off-patent and become generics. With no R&D expenses to recoup, they will become cheap commodities, costing a few dozen or hundred dollars per treatment. New drugs, especially those protected from competition by the Orphan Drug Act, will cost hundreds of thousands of dollars per year. Don’t be surprised when the first million-dollar treatment hits the market.

These developments are no kind of tragedy — drugs cannot do much more to lengthen human lifespan. Nor are these developments the result of a conspiracy or of unusual levels of greed. They are just the end-stage of the depletion of a resource.

The one-disease, one-protein, one-drug paradigm has served us well, but is approaching the limit of its usefulness. We have already found most of the safe and effective drugs that we will ever find. In time, we will no longer look for salvation in a pill, but will learn to engineer our internal environments — particularly our immune systems and microbiomes — and detoxify our external environments. Some drug companies will adapt and thrive, others will die. None of them will reliably continue to make money by cranking out small molecules that bind to big molecules. I’m not alone in thinking that we may have reached peak pharma, and there is nowhere to go but down.

Drew Smith is a molecular biologist and long-distance hiker who has held positions at several biotech and medical technology startups, most recently MicroPhage, Inc., which declared bankruptcy in 2012. He now writes about science and hiking at drewsmithblog.com.