1. The time horizons involved don't work well with government. The US can't get anything done over a 20 year time horizon, and the highly delayed ROI means projects would always be first on the chopping block when it came to cost cutting. As a side note, currently we can't even agree to adequately fund basic research in the country, let alone drug development.

2. R&D would inevitably be politicized. Some senator would want disease X researched because their kid has it etc. Some tax payers won't want to fund disease Y.

3. It places R&D and regulatory in the same high level entity. That sets up all sorts of conflicts of interest.

4. It complicates international trade. What if the US develops most drugs. What should Europe be charged for them? Surely products can't be open sourced because one group of tax payers paid for them and would want ROI etc.

5. Similarly, who decides pricing for all the US buyers? Get ready for massively complicated procurement based on tons of different rules.