In recent years the scope and application of intellectual property rights has been expanded remarkably in the area of medical research and development. This has strengthened the role of the private sector in developing and producing new medicinal drugs. However, medical research is usually close to a pure public good and thus not efficiently produced by private firms. One rationale for the role of the public sector in financing medical research and development involves market failures such as imperfect competition among suppliers and externalities. Another justification for government intervention is inequality--a private market for medical research could be Pareto efficient, providing or even developing no medicines to members of the population who are too poor to pay for them. The main objective of this article is to analyse and compare the effects of private and public innovation systems in medical research and development on global health levels using the theory of (global) public goods as a tool of the analysis. (Contains 5 notes.)