Interest in methods to provide drugs at lower cost, particularly for the elderly, has rekindled discussion over the role the federal government plays in facilitating the creation of new pharmaceuticals for the marketplace. This report explores the issue of whether or not the substantial federal investment in health-related research and development (R&D) entitles the public to commensurate consideration in prices charged for any resulting drugs. It is intended to provide the reader with an understanding of the rationale for government support of R&D and subsequent efforts to facilitate private sector commercialization of new technologies generated from such work. Concerns surrounding innovation in pharmaceuticals and biotechnology are discussed within the broader context of the federal role in facilitating technological progress.