Jason, I have always enjoyed your thought provoking and off the beaten path blog posts - thank you for sharing this one.
There is a constant tussle between patent holders and generics (in Canada the courts are after Shoppers Drug Mart for selling generics), and what Andrew Lo suggests seems to be a simple solution to two problems - the financial incentive to produce a targeted drug for a small population and the opportunity to participate in one or more potentially rewarding pooled fund for retirees at low cost (I think $3000 was just a number - it can just as easily be $3, or the cost of a lottery ticket) in the absence of defined benefit pension plans.
Kudos to both you for sharing this and Andrew Lo for presenting his idea - I think we need more imaginative ideas like this if we are to cope both physically and financially with longer lives.