Governments worldwide have made significant contributions to incentivize the discovery of medicines, both financially and non-financially.

The public sector has made a wide range of contributions towards the R&D of medicines, spanning from providing direct funding for undertaking basic-science research and clinical trials to building physical research infrastructure to supporting the operation of institutions (e.g. cancer registries). Governments’ contributions also include building generations of medical research workforce through education programmes.

It could be argued that many of the drug discovery efforts in the private sector would not be possible without the concurrent contributions from governments, and by extension tax-payers. Funding from the United States National Institutes of Health (NIH) of US$ >100 billion over more than 200 000 grant-years has contributed to every one of the 210 new medicines approved by the US FDA in 2010–2016. 

In addition to providing direct contribution towards the discovery of medical research, governments in many countries have also implemented a range of indirect measures to incentivize R&D. These include allowing private drug manufacturers to claim high-level tax credits or deductions for activities related to R&D.