> many critics of "Big Bad Pharma" who see the profitable drugs making it to market are unaware of the expensive failures that never make it that far.

But I think this image - that pharmaceutical companies are constantly risking their financial future pouring resources into research for new drugs which will finally cure some disease that has plagued humanity - is also a mischaracterization of reality.

For instance, drug companies also spend a large portion of their research budget developing "novel compounds" which are based on small chemical changes to existing drugs, just for the purpose of extending their patent and increasing the profitability (read: cost to consumer) of an existing treatment. So it's not as if all the resources they put in to research represent some altruistic good.

To be honest, I think the incentive structure for drug companies, like many things in healthcare, is just not ideal for producing the best outcomes. Their ideal business model is to own expensive drugs which sick people have to take for their entire lives. If they produce truly curative treatments, that's actually a net loss for them.

As some people have suggested, it would make a lot of sense to nationalize drug research in the US. The idea is you bring the top pharmaceutical researchers into the NIH, and while this would require a big up-front investment, you might even be able to operate at a profit by licensing the drugs they develop to the rest of the world.

Also, in a single-payer world, you would have the healthcare provider under the same financial umbrella as the people creating the drugs. As a result, the incentive would be to drive treatment costs down.