Public interest in approaches that might provide prescription 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. The government traditionally funds R&D to meet the mission requirements of the federal departments and agencies. It also supports work in areas where there is an identified need for research, primarily basic research, not being performed in the private sector. Congressional initiatives have expanded to include the promotion of technological innovation to meet other national needs, particularly the economic growth that flows from the use of new and improved goods and services. Various laws facilitate commercialization of federally funded R&D through technology transfer, cooperative R&D, and intellectual property rights. Contents of this report: Overview; Government Support for R&D; Industrial R&D; Patents; Legislative Initiatives; NIH-University-Industry Collaboration; Pricing Decisions and Recoupment; Research Tools; Government Rights: Royalty Free Licenses and Reporting Requirements; Conclusion. Figures. This is a print on demand report.