Recently, well-publicized reports by Public Citizen and the Joint Economic Committee (JEC) of the US Congress questioned the role of the drug industry in the discovery and development of therapeutically important drugs. To gain a better understanding of the relative roles of the public and private sectors in pharmaceutic innovation, the Tufts Center for the Study of Drug Development evaluated the underlying National Institutes of Health (NIH) and academic research cited in the Public Citizen and JEC reports and performed its own assessment of the relationship between the private and public sectors in drug discovery and development of 21 "impact" drugs. We found that, ultimately, any attempt to measure the relative contribution of the public and private sectors to the research and development (R&D) of therapeutically important drugs by output alone, such as counting publications or even product approvals, is flawed. Several key factors (eg, degree of uncertainty, expected market value, potential social benefit) affect investment decisions and determine whether public or private sector funds, or both, are most appropriate. Because of the competitiveness and complexity of today's R&D environment, both sectors are increasingly challenged to show returns on their investment and the traditional boundaries separating the roles of the private and public research spheres have become increasingly blurred. What remains clear, however, is that the process still starts with good science and ends with good medicine.