It is a commonly held myth that IT IS A GOOD THING TO HELP PHARMACEUTICAL COMPANIES EARN A 'REASONABLE' RETURN AND PROFIT. The dogma upon which this myth is based is that WITHOUT THE TEMPTATION OF PROFITS, PHARMACEUTICAL COMPANIES WOULD NOT INNOVATE, and consequently WE WOULD HAVE FEW MEDICAL ADVANCES.
In fact, it might be the OPPOSITE. In the UK, the government foots the bill for medical expenses. Hence, when the NHS pays for patented medication, they pay for R&D, production, and PROFIT. Take away the PROFIT, and, by definition, health care costs go down.
Where, then, would our innovations come from? There are many answers to this question. First, however consider the other advantage of taking profit out of the mix. As Neal correctly pointed out, is that patient-relevant (rather than profit-relevant) interventions are investigated more vigorously. This, in turn, would increase the quality of medical care and also likely reduce the cost.
Perhaps the most fruitful alternative to patent-driven research would be to reward fruitful research groups within Universities with more PhD and postdoctoral studentships.
It is also relevant, because this is often misunderstood, that patents are NOT fundamentally capitalist tools. In fact, they are government conferred MONOPOLIES on public knowledge (sometimes discovered with public funds).