The NSF isn't the primary fund granting organization for medical research, the NIH is -- with a funding level (28.7B) that eclipses the NSF (5.9B). In 2003, NIH is estimated to have funded 28% of the overall medical investigation costs:
http://www.medpagetoday.com/PublicHealthPolicy/HealthPolicy/...
Pharmaceutical research in all likelyhood includes the cost of bringing drugs to market, currently around $800M per drug. Because of this high barrier, much of the Pharma energy goes into 'me too' drugs of a higher risk/reward ratio, again inflating the true spending on new research:
http://freakonomics.blogs.nytimes.com/2008/01/24/what-dont-w...
Yes the NIH is a major source of funding for pharma, although not as big as you think, medical investigation includes a lot that is not pharmaceutical research
The me-too phenomena is a problem but only because of two factors, pressure by pharma reps and the fact that the US is the only country I ever heard of that allows advertising of non over-the-counter meds.
Pharmaceutical research in all likelyhood includes the cost of bringing drugs to market, currently around $800M per drug. Because of this high barrier, much of the Pharma energy goes into 'me too' drugs of a higher risk/reward ratio, again inflating the true spending on new research: http://freakonomics.blogs.nytimes.com/2008/01/24/what-dont-w...