Pharyngula has an interesting graph showing the steady improvement in survival rates of childhood leukemia over the last 40 years. A disease that was essentially an automatic death sentence 40 years ago is now over 90% curable. Leukemia is one of the more spectacular cases, but we have seen steady progress in our successful treatment rate for many diseases, especially cancers. In contrast with this success rate, over the last 5-6 years, the success rates for research grant applications have gone steadily down. Part of this is due to a growing, more competitive science community, but in that growing community are some very good ideas that are not being funded. Most colleagues I've discussed this with agree that probably ~65-70% of these grant applications shouldn't be funded (at least not without serious revisions). In the current funding climate though, the success rate is too low, and worthwhile health science research is not being done. This funding squeeze has two particularly bad effects: younger researchers get squeezed out of the profession, which means that when the current crop of senior researchers retires, we'll be short on qualified, experienced people to fill the gap. The other problem is that in a tight funding climate, we start to fund only conservative research projects, and not the really innovative ones that may be more risky, but offer a big payoff. The NIH is trying to fight these problems by specifically focusing more money on young investigators and high-risk projects, but it's doing this with a budget that is not keeping up with the pace of inflation. Can't the private sector take up the slack? In health research, no. Without question, the vast majority of the very best basic research in the biomedical sciences is done by government-funded researchers at universities in the US, Canada, Japan, and Europe. No other funding system even comes close to the success of government-funded university science. This is a good system, not flawless, but very good, and it makes no sense to pull back from our investment in this system just at the point when we're seeing major improvements in almost every field of biomedical science. The private sector is good at taking this science and making breakthrough technologies, but the best science is still done in the curiosity-driven environment of Academia.