The research part of research and development is primarily done by publicly funded researchers. The development part is primarily done by private ones, who expend huge sums of money on trying many different candidate therapies and shepherding them through safety and efficacy trials, which almost all of them fail, at huge expense.

If we want to increase the rate of return on investment the big, easy win would be dropping the efficacy test. If we want to reform the system of funding altogether buy out patents for their market value or give massive prizes and then have the drugs freely available for anyone to manufacture.