[belorn]

1/3 is the number, and while they do spend some on clinical trials, the vast majority goes to applied and basic research (their wording). That means 2/3 of the total R&D of medical innovation (US) need to go somewhere which is the drug development you are talking about.

Some people have argued that maybe those 2/3 should be tax money too. Its a bit weird situation where the state already pays for 1/3 of the R&D, and then on top of that give state enforced monopoly in 20 years periods for those who invest in the other 2/3 (additional monopoly period is also granted by the FDA after an successful drug trial). State enforced monopoly is often describe as tax raised outside congress control, and has its history and name (letters patent = royal decree) from that purpose.

One question we should ask is what the industry brings to the table if we took away all state funded involvement. Is it more efficient to bring competition through patent grants rather than direct research and development grants? Do we get larger and more spread out pool of investment that could not happen without a few blockbuster drugs to get gambling money? We should ask for data which prove that the current method (1/3 of the funding and granted state monopolies) is the best use of tax money. Maybe at least demand some kind of high standard when a company take research supported by the 1/3, and claim a new invention based on already known and disclosed techniques. The India model is to demand an increased efficiency, beyond showing that the modification of the old drug is novel.