The US government spends an enormous amount of money on medical research, and many medical treatments would simply not exist if it weren't for such Evil Communist behavior.
The market is a tool useful for some problems. It is not the alpha and the omega of society.
About $26.4 billion, that is 28% of the total biomedical research funding in US are money from the government. Its the single largest player in medical research. In areas of core principles, cancer research, and motility effecting illness, they are 80-95% in total funding.
Government is not and has never been an referee in medical research. The drug companies would never allow it. Try removing a $26.4 billion of free R&D and see lobbyist doing everything they can to stop you. Additionally, anyone caring about sick people would join in in stopping that bill. One do not simply remove $26.4 billion of medical research in the name of free market.
The role of government is to protect life, freedom and property. As soon as the government gets involved in microeconomic transactions, the efficiency declines. Comparing the US Postal Servie and Amtrack to Southwest Airlines and FedEx illustrates this perfectly. The government should regulate markets only as much as necessary to ensure that the markets function. They shouldn't be running the markets themselves.
The lack of tort reform is one of the key drivers to the insane cost of drugs and medical care. When a drug company has multi-million dollar exposure for every drug they produce, it's going to raise the cost. OB-GYN docs pay several hundred thousand dollars per year in malpractice insurance because one mistake has them on the hook for multi-million dollar punitive judgements.
Government should be a referee, not a player. It should provide a safety net from complete destitution, but not serve as an insurance policy against failure. The GM bailout is a great example of what government should not be doing.
When the government starts meddling in private business (i.e. pouring money into it,) it distorts the market and makes it much harder for innovative new players to enter the market. The Tucker car from the 1950s is a perfect illustration. The big three in Detroit threw around political muscle to effectively shut down a car company that built safer cars. If government had stayed out, we would have had seat belts and pop-out windshields years earlier.
"I'm from the government and I'm here to help" are still the scariest words one can hear in America.