If the knowledge was not restricted by IP law, then any drug company could use it, and compete for new drugs based on it. As such, it would not provide any of them with a competitive advantage, and so would not be reflected in what they could charge.
What universities typically produce is not a chemical that can serve as an actual drug, but is only a starting point for a long and expensive process of producing such a chemical. And then, it's often found that the target of the class of potential drugs isn't actually a good one. One can't determine that until drug candidates are available to test on real patients.
Remember you need to include all the failed attempts at finding useful things at university labs to see how much governments spend on research (just like you did failed pharma attempts), and if you add that up you see governments actually contribute a massive part of the cost to bring medicines to market.
What they produce is necessary to even begin the work pharma does, currently it is basically a gift from the people to the pharma industry.
The pharma industry COULD do their own foundational research, but the university system cannot bring a drug to market.
You can't use an "in theory" argument for one side but not the other.
In theory governments could bring medicine to market, in practice they don't/can't.
In theory pharma industry could do foundational research, but in practice they don't/can't.
You act like the solution would be “oh well, no meds for anyone then!” and not “let’s expand university programs to meet that need”.
Citation neeeded - have they ever done so? Would the shareholders accept it? Would they be able to manage borderline autistic PHD types detached from reality, and would these scientists want to work there?
What companies don’t have is PhD students. They are numerous, smart, very cheap, and work very hard.
> They are numerous, smart, very cheap, and work very hard.
Yeah, this is a good reason to hire such people, but they generally don't do foundational research work at companies, and if they do it is extremely narrow.
Just like government work the problem is the environment, Governments hires management and planning types just like companies do, but that doesn't mean they can scale up like a company can. Same with foundational research, private companies aren't a good place to do that.
I'm not quite sure why pharma is the exception.
In other fields, either there's some tangible hope of profit down the road, or at least you can attract talent and prestige. Not so much here.
Academics focus on drug discovery because it's better aligned with academic incentives and timelines (see this commentary for a brief description [0]). Drug development costs (including clinical trials, extensive and repeated med chem, etc) are borne mostly by drug companies.
Fair data on this is hard to come by because the two main sources have clear conflicts of interest (academics and pharma industry publications). One study Derek covered before (data from 1995-2007) shows only 24% of drug scaffolds were first found at a university and transferred to a biotech or pharma for development [1]. You can break this down further to highlight any story you want to support ('university ID'd drugs more innovative' vs. 'pharma ID'd drugs help more people') but they key point is that combining all the US research leads to only 24% of drug scaffolds that make it to market.
I think everyone acknowledges that outside of finding the scaffolds and the basic biology, pharma is paying the vast majority of clinical trial costs. [2] gives a figure of total NIH funding of clinical trials at 10% of overall (e.g. pharma covers 90%).
I think an argument could be made that the NIH training grants (which pay grad students in the biomedical sciences) subsidize the work force substantially, and might have a higher impact than direct research grants. I couldn't find quantitative data on this with a quick search, but I think this is often overlooked in the discussion.
Finally, a less quantitative pieces make me think the impact of the NIH/government funding is overstated even given the above numbers. In my own field (microbiome), academic research has been almost inimical to the production of quality drugs. For every disease there exists a paper suggesting that a certain gut microbe changes the likelihood/severity/X about that disease. Academic labs have incentives to publish significant results fast, and in the microbiome this has led to a) abysmal signal to noise ratio with very high likelihood of failure to replicate, and b) an epistemic closure about what types of microbiome data matter and how they should be pursued as drugs that is totally divorced from the reality of how drugs are developed. Much of the knowledge base is polluted by low-quality research that has been done for the purpose of publishing. While the NIH spends ~40 billion a year on external research grants [3], I think you have to heavily discount this for the amount of just pure "grad student needs to graduate gotta publish" material that gets produced.
[0] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10812233/ [1] https://www.science.org/content/blog-post/where-drugs-come-n... [2] https://www.fiercebiotech.com/research/report-industry-not-n... [3] https://www.nih.gov/about-nih/what-we-do/budget