What most people are missing here is that government money only gets you as far as the discovery, and that's if you're lucky enough to, you know, discover something. More likely, you run out of money with nothing to show. I have no cites handy, but the success rate of drug R&D is pretty darn low.

Say you do get something. Now you want the government to also be involved in the commercialization of the discovery? I think people would argue they are already involved enough, what with the FDA and all.

Further: the person making the discovery spent half a decade of their lives after college to get a PhD, and very likely many years of post-doc, to be extremely specialized in an extremely narrow area of some field. Now you want them to be product managers and manufacturers and businessmen as well?

This is one problem patents solve: Division of labor. Let those who are good at science and technology do their thing, and let people who are good at commercializing do their thing, and let IP ensure one both sides have means to reap appropriate rewards.