The fact that there's a feasible market incentive for drug R&D suggests to me that that an actual competitive approach to health care would stimulate this sort of behavior on a more widespread basis.
Perhaps that market incentive only exists when competition is a small/limited factor (say near monopolistic cases)?
There are a lot of businesses I'd happily set up if I knew I'd have limited to no competition. When competition is more fierce, it disincentivizes me to even try.
If I was guaranteed the lionshare of say, local coffee goers across a large area and didn't have to worry about Starbucks, Peet's, etc. I'm pretty sure I could make it successful and my life would be pretty easy, all things considered.
A lot of rural ISPs can operate this way because it's not viable to compete with their infrastructure foothold in a lot of cases and barriers to entry are high/capital intensive (similar to pharma).
I work in a research environment and there are a lot of funding opportunities/solicitations out there that fit our internal capabilities that we don't even bother writing proposals up for because we know how competitive and unlikely it is to be successful compared to certain other opportunities. Instead, we choose our battles where we suspect we have a higher probability of success: less competitive options. This leads to higher ROI for our time. It works fairly well and I imagine most businesses try to operate under a similar perspective (or more dubiously where they also try to actively stifle their competition).
