I don’t have a ton to add to Kevin Drum’s views on pharmaceutical research, except that it’s worth stating clearly that there are good reasons to believe that the market mechanism substantially misallocates R&D dollars away from social optimal purposes because rich people and poor people tend to have divergent medical needs.
The relatively small size of the market for malaria treatments, for example, doesn’t really reflect a lack of consumer demand for such treatments nearly so much as it reflects the very low incomes of people who live in malarial areas. This sort of thing is why we already have substantial public investment in drug R&D and why we should be looking at introducing more reliance on things like prizes into the R&D mix. I think there will always be a room for the private sector, patent-based path since there is a lot of genuine value in the development of so-called “lifestyle” drugs and the public sector probably wouldn’t do a very good job of targeting investment in those kinds of things. Nevertheless, unleashing the public sector has a lot of promise.