There's no question that we're getting screwed by big pharma, especially due to the completely arbitrary regulations around generics that their lapdogs in congress have put in place. Step one to fixing this is the same step as fixing all of our other problems - term limits and comprehensive campaign finance reform.
That said, developing new drugs and producing them in compliance with the GxP regs is definitely expensive. Being under the FDA's thumb is not easy. Some of that could probably be dialed back, a lot of it is legitimately in our best interests.
I would guess that the biggest area where this becomes a problem is in developing drugs which affect a relatively small number of people. It's not going to be hard to recoup on the cure for baldness, but for something which only affects a small number of people it's going to be much much harder. You want big pharma to have an incentive to work on drugs for those people, but it's going to lead to crazy expensive drugs that those people may not even be able to access.
It's hard to judge this stuff because the market has been so badly distorted by corruption and the resulting regulations you can find truth in everyone's perspective and fault in everyone's perspective at all times.
I tend to be a free market guy but this is a classic case of reality vs. principle. On one hand, you can pursue removing the regulations which drive prices artificially high, but is doing so even remotely realistic in the current political climate? Probably not. On the other hand, socialized medicine is closer at hand and has material benefits to the average person but is abandoning principle really the way to resolve the crisis? Also, in a country whose every political decision is determined by corruption, is expecting the government to deliver benefits to consumers by taking over the system realistic? Again, probably not.