The Case for Large-Scale Government-Funded Medical Research and Development

If delicate brain surgery is required, should a person seek out the surgeon who offers the lowest price?

Should a pharmaceutical company choose to develop a cosmetic with high earning potential over developing a drug that could save lives but because of limited usage would not be financially attractive?

In a purely market-based economy, the answer to both questions is "yes." But is this in the best interests of society?

Imagine a large-scale government-funded facility that researches and develops pharmaceuticals according to priorities determined by the American Medical Association and leading health organizations. Products that were found to be useful and deemed worth marketing would then be manufactured by pharmaceutical manufacturers on a competitive bidding basis. Ownership and patent rights would remain the property of the Government.

The Government might choose to impose a sales fee on the end product in order to recoup some of the research and development costs, but would have an incentive not to do so. Keeping sales prices low would encourage wider use of the products, which in turn would result in a healthier population with more earning power and more economic growth.