I think Curly misread his book. Or he read a piece of propaganda.
It's true that most basic drug research is done in university research centers and with federal money. But it is NOT true that they develop "drugs."
What they develop is chemicals that show some promise, given further development and extensive testing. That's when Big Pharma buys in, and spends a gazillion bucks developing the chemical into something that doesn't kill an unacceptable portion of the people taking it.
The last drug I worked with had over $300 million of Sanofi-Aventis's money into it, and it still didn't get approved by the FDA. It may never be approved. Meantime, S-A is out $300 million. It was based on a drug discovered through university research with rats. Good for rats, not so good for people.
And that's the way most of it is done.
-- Ed Huntress