Many of our recommended charities treat or prevent debilitating diseases. However, there is always the possibility that there could be a more cost-effective treatment or prevention method which research has not yet uncovered. If a certain investment in medical research could uncover it, then that investment could potentially lead to enormous health benefits in the future - far more so than direct interventions performed in the present.
In 2015, a Giving What We Can intern conducted an in-depth investigation into the cost-effectiveness and potential impact of medical research with a focus on neglected tropical diseases, or NTDs (which are dealt with by at least half of our recommended charities, depending on the definition of NTDs). You can find the full report below (or, for a shorter discussion, see this blog post).
It was found that it is indeed plausible that medical research is extremely cost-effective on a $/DALY basis (quite possibly less than $100/DALY averted for many NTDs), however there is such a high level of uncertainty and it could also easily be a great deal less cost-effective than the interventions carried out by our current recommended charities. Indeed, due to this uncertainty we are unable to conclude strongly in favour of or against funding medical research as a cause area. In addition, we have not yet identified any specific opportunities for individual funders to cost-effectively have a large impact on medical research through donations. There is, however, a case to be made against exclusively targeting donations at additional research into diseases for which highly cost-effective interventions have already been found. For instance, which schistosomiasis treatable through mass drug administration for less than $1 per child, funding for research into schistosomiasis seems unlikely to have as great a marginal impact on human well being as simply carrying out the treatment already available to us. On the other hand, it is still very much possible that research into schistosomiasis vaccines and gene drives would drive the price 'per person treated' down by so much that investments into research would still make sense even on the margin.
This is all extremely uncertain, however, and we certainly believe that additional research is highly valuable. It may potentially be even more valuable than those other interventions, but this is extremely uncertain and the most promising opportunities to contribute to NTD research are far more difficult to identify.