"Recoup their costs" - the same way we recoup them by providing welfare. Human capital. If we don't believe that keeping people alive and healthy is worth investing in, what, exactly, are we bothering to spend any money on in the first place?

The reward/loss proposition is "does this drug help people and would have it existed otherwise", not "did we turn a monetary profit"

NPR recently aired an opinion by someone who claimed that the US federal government could save money in the long run by buying the (publicly traded) inventor of a Hepatitis C drug on the open market (for about $500M) and then manufacturing and giving the drug gratis to all diagnosed Hep-C patients. The large up-front expenditure is recouped on the back end by reducing the expensive liver transplants that would likely be required, and then paid for by Medicare.

It is an argument-in-miniature for reforming health care in the US.

In all likelihood, the US should be operating its own generic pharmaceutical manufacturing facility, for all clinically relevant patent-expired drugs, that would, at minimum, serve all VA, Medicare, and Medicaid patients. If you can pay from an effectively unlimited purse, that just encourages the generics manufacturers that you buy from to raise their prices to just beyond the limit of what is reasonable.

Curing disease is usually less expensive than continuously treating them until the patient dies (or runs out of money). The patent system encourages research into the latter. A public health system would prefer the former.

The quest for (economic) profits in an industry is by definition the quest to make it more expensive relative to other industries. You can't get better than average returns from companies in it unless their customers are paying more money into it relative to other industries. Granted monopolies allow firms to achieve economic profits. Health care is expensive in the US because it is protected from commoditization. That is by design, so that health care businesses can be (economically) profitable!

It stands to reason that you cannot achieve lower costs without destroying opportunities to realize economic profits. That is why this administration and all previous administrations fail at "fixing healthcare". They are already committed to preserving the profits. Health care company shares make it easier for those that own them to live at the expense of those who do not. The noise about insurance plans and coverage is distracting everyone from the root cause: for-profit businesses with protected monopolies.

Drug research can be done with the goal of improving quality of life rather than the goal of making more money than can be earned by investing on the no-risk baseline.

Patents make an industry more expensive for everyone else to buy from. That is their purpose. The original intent was to make otherwise untenable investments in R&D pay off. But in mature, non-nascent industries, they are a drag on the economy.