R&D stays in private sector. All successful drugs are bought by the government at the cost of R&D and a sizable profit. The government, then, distributes it. Government can control the distribution and Pvt. markets can control the invention.
Government can then tie up with other govts. and allow sales of the said medicine in those countries.
It's not an ideal solution, but it has best of both capitalist and socialist ideologies.
Sounds like a nonstarter to me.
We could really screw up an industry that has been phenomenally successful at producing drugs that everyone agrees have provided incomparable and vital life-saving solutions.
We should be extremely sober and careful about messing with it and mindful of our ability to destroy the benefits that we already get today. I've seen too many comments in this thread along the lines of "They make too much money" or "The Government should take over the industry" or "Something radical needs to be done right away because 'lives are at stake'".
Statements and positions like those set off my warning alarms.
Again, I'm inclined to agree with your criticism of that particular proposal. And I'll agree that there are things that are worse than the current state. But the current state is pretty bad, and imperfection is not a disqualifier for "better".