Although the multi billion dollar price tags often dragged out and pilloried are rather inflated (see 'Hollywood accounting') it is expensive to develop - and test - a new drug. The NIH certainly has the ability to organize the testing, various biochem labs or even start ups can do the development. I'm pretty sure that there are European groups that can help out at various stages.
India, Israel and a bunch on non US companies have shown they can manufacture the pharmaceuticals.
You don't need big Pharma at all. You need the FDA to be able to license foreign drugs, you need the NIH and perhaps some other federal agencies to coordinate activities with other countries. You can cross license patents.
You know, cooperate. It's a big planet.
But most of all the US Federal Government needs some balls. They have to be able to rise above the current kleptocracy and do something right for a change.
Bah, may as well ask for a Pony.