> Government is often quite efficient. For example, public health insurance has smaller overhead (like five fold less) than equivalent private products. I don'

> Government is often quite efficient. For example, public health insurance has smaller overhead (like five fold less) than equivalent private products. I don't have the numbers so I can't speak to the overhead, but I can point at the VA health care system as a counter to your statements about government health care being efficient. > The entire NIH budget produces prodigious amounts of research, from the basic to the translational, for less than what the entire pharma industry spends just to refine their drug development. The private sector sucks at research spending. There are a number of problems with this argument. First, the NIH can afford to take a shotgun approach to research funding which pharma can't take because the risks of loss are so much lower. The NIH can give out large numbers of grants per year, have a large number of them fail to produce meaningful results, and call their work a success as long as some good work is being done. That model is untenable at the major clinical trial level because the losses would be astronomical. It's the same reason why the Y combinator investment strategy wouldn't work if you wanted to apply it to big private equity deals: You can't fail massively more than a few times before you're in trouble. Second, the standards for "success" are completely different for drug development and basic / translational research. Most basic research is looking for (at best) proof of concept in an in vitro or in silico model; most translational research is looking for efficacy in an animal model using small populations. A pharma research project has to consider statistically significant efficacy, formulation, dosing, acute and chronic direct toxicity, delivery, off target effects, drug-drug interactions, manufacturing, storage, population differences etc and are held to much higher standards at every stage than your average research lab. By the way, even with these differences in requirements, it is well known that a lot of published, NIH funded research coming out of academia is not reproducible: http://www.nature.com/nrd/journal/v10/n9/full/nrd3439-c1.html http://www.nature.com/nrd/journal/v10/n9/full/nrd3439-c1.htm..., http://www.nature.com/news/announcement-reducing-our-irreproducibility-1.12852 http://www.nature.com/news/announcement-reducing-our-irrepro... If this were to happen in pharma, you would have deaths and lawsuits.