Here's a related idea, proposed by MIT Finance professor Andrew Lo: http://www.technologyreview.com/news/506916/economist-proposes-a-30-billion-megafund-for-ne

Here's a related idea, proposed by MIT Finance professor Andrew Lo: http://www.technologyreview.com/news/506916/economist-proposes-a-30-billion-megafund-for-new-cancer-drugs/ http://www.technologyreview.com/news/506916/economist-propos... It's basically a fund that would develop drugs in a portfolio-based fashion, to take some of the uncertainty out of drug development by aggregating risk over a set of efforts. This scheme might preserve some of the benefits of the market-based system we have now, but promote development of a class of drugs that is hard for the market to develop.