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Here's a related idea, proposed by MIT Finance professor Andrew Lo:

http://www.technologyreview.com/news/506916/economist-propos...

It's basically a fund that would develop drugs in a portfolio-based fashion, to take some of the uncertainty out of drug development by aggregating risk over a set of efforts.

This scheme might preserve some of the benefits of the market-based system we have now, but promote development of a class of drugs that is hard for the market to develop.



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