The government funds a lot of early stage preclinical research. These are the inexpensive stages of the pipeline.
As soon as you move into humans you can add another 2 or 3 zeros to your burn rate.
It is not politically feasible for the public sector to fund later stages. The numbers are just too big. Just think of the campaign ads that would run around $200M late stage failure funded by the government.
The reason why mega giant pharma companies exist is because they make enough money and are capitalized enough to withstand multiple $100M failures without going belly up.
The public gets access to a life-saving drug that otherwise would not exist, which is exactly what the government is paying for. You can reasonably argue they they should get more, but arguing that they should get some ROI is moot; they're already getting a tremendous ROI
The public gets the privilege to be price gouged for stuff their taxes paid for. Doesn't sound like a good deal. Many will not have access at higher costs. Price gouging restricts access.
Are you saying the public would prefer that the drug not exist over the drug being expensive? If not, the public is getting a return. Like I said, it is reasonable to argue that the public deserves more return, ie. that it's a bad deal. But the argument that it's paid for by taxes and therefore should provide value to the public falls short of disagreeing with the status quo.
I'm saying it may as well not exist for people who can't afford it. You might say it's worse than not existing when it does exist but they can't have it because you would rather people die than receive treatment, due to your weird ideas about people making money and how justified that is.
Your bend over backwards justification of greed over human life is rather insane.
If the R&D cost (including amortised failures and whatever) for some hypothetical drug is $1B and the manufacturing cost is $100M for 100M doses. The drug should cost about $11 + a reasonable markup in a fully private system.
If the R&D costs are fully funded by taxpayers, it should cost $1 + a reasonable markup.
The public doesn't "get" anything if it still costs $11 (+markup) and a company is allowed to take a 1000% profit margin because they're only risking the $100M for the manufacturing.
There is a limited amount of money we can spend on medicine. Every overpriced life-saving treatment kills someone who is in turn denied resources for another life saving treatment.
The outcome for taxpayer ROI should be about the benefit to the public at large regardless of who commercialized it. Commercialization should eventually lead to better and cheaper version of the technology, which increases benefit to the public.
Of course, the people who worked to commercialize it deserve pay for their work, so the question is exactly how much.
As soon as you move into humans you can add another 2 or 3 zeros to your burn rate.
It is not politically feasible for the public sector to fund later stages. The numbers are just too big. Just think of the campaign ads that would run around $200M late stage failure funded by the government.
The reason why mega giant pharma companies exist is because they make enough money and are capitalized enough to withstand multiple $100M failures without going belly up.