A number of folks, including myself but more prominently Megan McArdle, have argued that a big problem with nationalized health care schemes is that these plans threaten drug innovation in the US (which is really the last remaining source of drug innovation in the whole world).
The argument is that nationalization schemes will likely hammer drug prices through price controls down to marginal cost, eliminating any profit motive for expensive drug development. Further, new drugs will be hampered by having to convince government health care czars that the drug should be allowed under proposed proscriptive, top-down systems of allowed medical procedures. Risk-adverse beauracrats faced with inevitable budget overruns are unlikely to take the chances with new procedures that the private world takes every day. (And if you don't believe that budgets will be immediately overrun, look at cash-for clunkers, where 5 months of funds were used up in 5 days -- people may not like the government, but they will take free money and services in near infinite amounts).
Well, I had thought that the response to this argument from health care "reform" supporters would have been something like "private incentives to develop drugs will still exist because of X or Y." But apparently, they have given up on that argument and jumped all the way to the argument that even without any private drug companies, Dr. Robert Stadler and the State Science Institute will do all the drug development we need.
Megan McArdle responds in depth here. I think there is a simpler argument. Look at something like computers or machine tools. Innovation in these free markets occurs all over the world, and new inventions and products are as likely to come from Korea or Japan or Germany than from the US. But in the world of pharmaceuticals and new medical devices, a wildly disproportionate share come in the US, the last semi-free health care market in the world. And even those new products developped in other countries are funded and capitalized based on their profit potential in the US.