Is medical research underfunded? If so, why?

Medical research spending in the US is less than 2% of its overall healthcare costs. Considering how much of a difference new drugs and treatments can make (think of Ozempic reducing obesity and its comorbidities, antiretrovirals preventing AIDS patients from needing hospital beds, vaccines, etc), it seems to me like more medical research could wind up massively reducing these costs as well as providing better care.

One example is Alzheimer's research. Alzheimer's costs the US alone $500 billion per year, yet only around $4 billion in NIH funding is spent on finding a cure for it. This seems wildly out of proportion unless there's only a 1/125 chance of finding a cure for it (clearly not the case).

I was wondering what, economically, the reasons for this are. Is it just because whoever invests in it (pharma, biotech, the government) won't be able to capture the full value that their treatments provide?