No, the National Institutes of Health are not going up against Merck, GlaxoSmithKline and the other companies of Big Pharma.  They are going to start drug development research on so-called “neglected” diseases (H/T ScienceInsider).  The $24 million program (less than .1 percent of the total NIH budget) to establish a drug development pipeline will trigger a new initiative called Therapeutics for Rare and Neglected Diseases (TRND) coordinated through the NIH Office of Rare Disease Research.  The NIH defines a rare disease as one that affects fewer than 200,000 Americans (less than .067 percent of the population), and estimates there are 6800 rare diseases affecting 25 million Americans (nearly 1 in 10 of us).

I think this is a perfectly reasonable thing for government to take on – fill in the gaps in biomedical development that are not currenlty being addressed by the private sector.  Given the costs of pharmaceutical research, companies often focus on diseases or conditions that affect millions of people.  Government can also make any drugs developed for these diseases available relatively cheaply, as they are not motivated by profit in these endeavors.