Manzi explains the danger of government funded pharmaceutical research:

Ezra Klein has an interesting post up in which he correctly points out the conflict of interest inherent in having pharmaceutical companies that develop new drugs execute the clinical trials that test for their safety and efficacy... Klein recommends a paper that presents a simple solution: the government should fund contract research directly. 

But the obvious point that this misses is that a government bureaucracy has its own conflicts of interest. Most directly, bureaucrats and politicians tend to have enormous career risk from an unsafe drug introduction, but almost none from a rejected drug that would have been effective had it been introduced. Publication and study design bias can be pointed in both directions.

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