It is not an exaggeration to say that modern medicine is one of the highest achievements of human evolution. The control of our own physiology and its malfunction is a manifestation of our consciousness equivalent in importance to the highest cultural achievements of humanity in music and literature.

But, unlike culture, which still depends to a large extent on individual genius even in its manifestation, the invention of modern medicines requires a complex interaction between many elements of human society. These elements strive for their own destiny, but must be meshed together if the whole is to be successful. The system is now out of gear. Progress has flattened, resources are being wasted. There is no clear vision as to how to maintain progress in increasing human happiness by decreasing suffering from disease. Modern medicine in all its guises, whether a new vaccine to prevent cancer or a stem-cell treatment to rebuild a damaged heart, needs the component parts of discovery to work together. This makes coordination essential between the pharmaceutical and biotechnology industries, universities and research institutes and healthcare delivery systems (in particular in the UK, the NHS). And the whole needs appropriate funding.

The great advance started 50 years ago in bringing evidence-based treatment to those who needed it. The prime example is the discovery of beta blocker drugs by Sir James Black, who died last year. He received a Nobel prize for his original idea. He worked in a small laboratory in the research department of Imperial Chemical Industries near Manchester. Profit from the company was invested in his research, which made a small molecule that blocked a receptor for adrenaline in the body. Simple yet elegant experiments in animals and human volunteers showed that blocking the receptor did have an effect on the heart and blood vessels. But the effect on blood pressure was more difficult to demonstrate (a modern pharmaceutical company might have thrown the invention away upon hitting this obstacle). But Black, working with one university clinician, Brian Pritchard, discovered the conditions under which the discovery could reduce high blood pressure. The research was inexpensive but intellectually intensive, involving primarily two thinkers - both scientists, both clinically trained. When Black received his Nobel prize, he had published 25 papers, none of them in a high-impact journal. His research had a profound effect on the treatment of heart disease, and beta blockers are now routinely used in the treatment and prevention of a variety of conditions.

Black loved opera, debated man's moral purpose and was philosophically challenging. He had a mind that was educated in more than science.

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Supporting the open-minded investigations of their employees, pharmaceutical companies made discoveries that changed the lives of people. Among many examples, early death from heart attack has decreased because of the invention of statins. Then a great change occurred. Before, Black had been able to use capitalism to good effect. Now, the worst of capitalism has brought about the fall of the pharmaceutical industry.

The success of pharmaceuticals brought large amounts of cash and expansion of ambition, which demanded the generation of more cash. To do this, scientific discovery was industrialised. This has been a failure. Pharmaceutical companies have invested billions of dollars a year in research over the past five years. Given the levels of expenditure, their record on significant medical breakthroughs is poor. This level of inefficiency would not be tolerated in other industries. It is absurd to put a thousand people in a new glass building, order them to discover valuable things and expect lucrative breakthroughs to follow. The spectacular failure of the pharmaceutical industry is based on a lack of understanding of the nature of discovery, as exemplified by Black.

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The discovery of new medicines is based on an understanding of biology, which is almost infinitely complex. Engineering research can be industrialised (for example, to produce a better motor car), as can, to some extent, discovery in physics (for example, the Large Hadron Collider at Cern). But the complexity of biology applied to human disease can be comprehended only through a creative cognitive process of insight tied to intellectual invention, not through quantitative industrial processing. And how does novel intellectual insight and invention of quality arise?

For the past thousand years, the ideas on which most aspects of Western society have been built have come from the European university. Today, the UK academy still has the ability to produce intellectual insight and invention of quality. This comes from an environment in which different disciplines can interact together in an atmosphere of intellectual freedom fostered by a leadership that maintains sufficient discipline while encouraging challenge. (In industrialised discovery, researchers followed algorithmic protocols given to them by managers seeking promotion on the basis of fulfilling short-term objectives. Those managers reported to senior managers whose main concern was the short-term value of the company's share price.)

Intellectual insight and invention in biological science comes from the ability to fantasise a hypothesis, to connect knowledge in a series of knight's moves within the mind, not at the laboratory bench, to design an experiment that is a qualitative leap, not a quantitative extension. Such experiments are of high risk, but also potentially of high reward to society. They bring new medicines and Nobel prizes.

It is probable that early specialisation at school has also diminished the ability of students to have creative thought. From young teenage years, students who wish to be biological scientists are taught molecular biology, with its emphasis on smaller and smaller molecular interactions, as opposed to systems of physiology, which give rise to wide interconnected thinking.

Also, the decrease in exposure to the humanities at school has diminished students' experience of fantasy through literature and history; and of knight's-move thinking through mathematics and language. Consider the fulfilment gained in mastering the use of the subjunctive in Latin, or distinguishing the gerund and gerundive, or comprehending the importance of Latin syntax in solving the Arian heresy or the descent of Proto-Indo-European into modern European languages analogous to the evolution of a gene. Lacking such experiences, entrants to university and to the pharmaceutical industry may have been already conditioned to think linearly and quantitatively, where a unit of measurement is the goal.

If the university has a fundamental role in intellectual creativity in biology, then this role may be important for the success of the pharmaceutical industry. Perhaps that industry should concentrate on what it does well - the clinical development of new discoveries, and the university should be the generator of those new discoveries. However, over the past 15 years, the discovery role of the university in biological science has been diminished. Academics have had to compete for a relatively decreasing pot of funding through an anonymous peer-review system that has led researchers to undertake small, risk-averse experiments that are often only a fractional extension of their last funded study. Risk-taking discovery has almost disappeared. The government's research assessment exercise also channelled academics to produce quanta of research output to a deadline. Black would not have fared well. A radically new approach to funding university biological science, which encourages long-term risk taking, is needed.

Also, the relationship between the university and the pharmaceutical industry has produced a situation in which academics seek contract research from the industry. These contracts are won if the academic can do what the industry wants. This diminishes the creativity of the university. The relationship between university and industry needs reversing so that the creativity of the university can be fertilised and later used for the benefit of the pharmaceutical industry. In North America, pharmaceutical companies are now scrambling to include university research in their research strategies. But the process is being driven by the pharmaceutical industry. Universities should have the courage to drive the process intellectually, and the industry should have the insight to respond. The academic clinician scientist understands the future market for new medicines; the industry often relies on historical data.

The pharmaceutical industry is not alone in having failed to make progress in the past 15 years. The British biotechnology industry has similarly disappointed. Many companies that were spun out from universities were not successful because strategic decisions were made about science by venture capitalists with very short-term financial goals. The funding of the translation of biological discovery into new medicines cannot be treated like investment in industrial cleaning. It requires investors who believe not only in the importance of capitalism as a means of generating wealth for the good of society, but who also have a belief in their self-fulfilment through aiding the introduction of new ways of treating human disease. (One might ask if the venture capitalist might not have made different decisions if he - or, more rarely, she - had had deep exposure to the humanities in education.)

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The university, the pharmaceutical industry and the biotechnology industry have all failed to achieve their potential in research. Sadly, there is yet another to be added to that list of failures - the fourth component of what we might call "UK Life Sciences", the NHS. This, like the university, is a national resource with an infrastructure funded by public money. The NHS is probably the most outstanding healthcare system in the world if judged by the care it gives to the whole population. However, as doctors moved away from leadership roles within the NHS more than 30 years ago, an industrial style of management emerged within which research has not been a priority. Quantifiable targets for patient care, determined centrally, have directed the activity of the service. These targets have been driven by the political goal of short-term quantifiable achievement. The potential for the NHS to be used as a system for understanding disease, for testing new treatments, for generating new ideas for therapy has been lost. In the NHS, every patient should be a research patient. As it moves forward, the NHS should be researching within itself constantly as a primary function. The NHS, which is unique in the world, gives UK life sciences an advantage over US life sciences. If connected organically to discovery in the university, proof of principle that a university invention does work in the clinical situation would add value to inventions that might otherwise have been sold cheaply to the pharmaceutical industry.

Each of the four elements of UK life sciences is dysfunctional in its individual performance towards making new medicines and generating wealth and jobs for the country. Also, the four parts are not connected in a way that amplifies the output of the whole and enhances each component. To achieve this coordination, some central leadership is needed. If the government were looking for a noble purpose, what better could there be than to lead the renaissance of UK life sciences? What is needed is a plan that looks at the whole rather than tinkers with the detail of the component parts. But, of course, reform of the constituent elements would also be necessary.

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Novel funding is essential for a new productive system of discovery. The short-term selfishness of the traditional venture capitalist should not be considered. However, there are sovereign funds that are looking to invest large amounts over the long term in high-risk, high-yield endeavours. UK life sciences could be the subject of such funding. However, an original, radical plan would be needed.

An encompassing vision would be that inventions from the university could be demonstrated to have a therapeutic effect in patients in the NHS; this would increase vastly the value of the invention before it is sold on for development to pharmaceutical companies, which would compete with each other to buy the best therapeutics or devices. Thus, the state-funded elements of UK life sciences would maximise the value of investment. The university would drive intellectually the process of discovery. The NHS would fulfil its role in research. (There is a danger that a discovery-failed pharmaceutical industry would try to pick off the best elements of university research cheaply, abetted by an unconfident, subservient administration.) A visionary plan might be attractive to sovereign fund investors. Such investment would be the fuel that made the university-NHS relationship work.

If projects were funded within the university, they would have a greater chance of success than the discovery process of Big Pharma or biotech spin-offs because of the involvement of the discovery team, including clinical scientists, up to proof of principle. They would be cheaper because the basic research would have been funded from research councils and would have used government-funded university equipment. Time from patent to proof of principle should be shorter owing to the continuous involvement of the same team. And failure rates would shrink because the academic inventors would be on hand to solve problems.

National growth could be achieved from UK life sciences by non-governmental investment in projects in biomedicine within the university and demonstration of effect in the NHS. (This might be in novel ways, eg the imaging of disease-receptor occupancy of a small molecule associated with change in receptor signalling in a circulating blood cell.) The projects would be large, taking patented idea to proof of concept in humans in the NHS by clinician scientists who were involved in the project from basic science discovery.

Patentable discoveries from science grants would be the starting point. Therefore, generating intellectual property of value in UK universities is key to this plan. A high-profile campaign from government to educate academics and NHS staff about the nature and process of patents would be needed. At present, immense potential income is being lost to UK life sciences because few academics really understand the nature of a patent.

The involvement of chemists, structural biologists and even engineers with biomedical scientists would be important. The output would be new small-molecule treatments for diseases, gene therapies, stem-cell therapies and a new era of biological therapy - device combinations.

The selection of which candidates to patent and enter the project would be made by a board of clinical scientists, regulatory experts, basic scientists and controllers of resources using a set of rules agreed with an investment fund (such as size of new market, time to proof of concept, value, competition, feasibility).

A project would take typically five years from patenting to proof of principle, with necessary toxicology being contracted out. Every project would have an aim of producing a therapeutic that would stimulate competition between Big Pharma companies interested in buying it. A project might be funded to a level of ?10 million, which would allow the academics involved to pursue high-quality research and publish results. There are some 30 UK medical schools. If each one produced 10 projects over 10 years, ?3 billion would be needed. However, this plan might be more successful if a group of 10 "Ivy League" medical schools embedded in universities where high-quality science is pursued could interact with a group of "Ivy League" NHS Foundation Trusts. Such a scheme would need ?1 billion of funding. However, it would take only 10 per cent of projects to be successful to give an unprecedented return on investment (see related file, right).

The sovereign funds that are seeking to invest in high-risk, high-return projects are looking for a big, bold, new idea that can generate growth. All funders agree that refreshing ideas are needed.

It may be argued that to establish large projects in biomedicine within universities that are directed to a therapeutic target runs counter to the ethos of academic freedom. The American Association of University Professors has argued that academic freedom is justified only if it is for the public good. It's a good point. However, academic freedom itself is for the good of society if undirected research in biology or Latin is pursued for its own sake. For example, astronomy produces very little that generates growth in the economy, but it stimulates rumination among the public about human origin and destiny. But such unbounded academic exploration requires resources. Within a biomedical project funded to the level of ?10 million, there is sufficient funding for high-quality free research to be performed within the project.

UK universities are powerful engines of discovery in medicine, the sciences and the humanities. What is lacking is funding to fuel the engine. Education brings in relatively small amounts of income that could not seriously be used to fund non-translational research. The only source of large amounts of wealth is the exploitation of patentable science within universities. The plan described here could provide such wealth.

Perhaps also there is a duty of science to provide the income to fund humanities research in our universities. And further, if sufficient wealth were generated, then independence from government might be achieved. Yale University has an endowment of about $20 billion (?12.3 billion). UK universities could never amass such a resource from philanthropy, but they might from exploitation of science. In Yale, there is no restriction to entry for poor applicants: their fees are paid from the Yale endowment. Perhaps science-generated wealth could do the same in the UK.

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So, a fragmented, dysfunctional system could be repaired and organised to bring about qualitative change in the economy, the health service and the university. What is needed is long-term vision combined with leadership skill and courage from the government.