Costs of drug development are primairly driven by the need to adhere government regulations, not because of the R&D costs. With simple adjustments, whole new drugs can be created. Those costs are actually quite low compared to the administrative burden of bringing a drug to market.
I've said it before and I'll say it again: Those regulations exist for very good reasons (related to both safety and efficacy). I also think you underestimate the amount of science involved in bringing a drug to market. First you have to understand the biochemistry of the disease, then you have to come up with a target molecule you think will work, then you have to figure out how to make the molecule, then you have to see if it works on a lab level (computer models/test tube reactions), then animals, then move into people where you have to move through many stages of clinical trials. You have to pay for all the drugs that never make it. Even if Pharma companies spent nothing on marketting and the minimum on lawyers and admin drug R&D would be neither cheap nor quick.
In light of this, government has to grant some form of protection. Otherwise, as you so rightly conclude, no new drugs would come to market. But to mark these innovations as a result of patents, is the world upside down.
Well what form of protection do you propose.
I never said that the innovations were the result of the patents (of course the patents are the result of the innovations) BUT that the patents provide the motivation to get on with the innovation. A tree isn't the result of the fruit grown on it, but it is probably the reason why someone's growing the tree.
Lift the regulatory burden and you have no need for patents in the drug industry.
Without regulators we can't trust the pharma companies to be honest nor their products to be safe and effective. It would be like homeopathy, except that bad drugs could actually kill you - unlike small bottles of water.
And you haven't answered the question where will the money to develop drugs come from? The only way we could eliminate patents in R&D intensive industries would be to nationalise them and have all R&D taxpayer funded... (then "stuff" would be cheaper but taxes would be higher... and you probably couldn't integrate such a system into the global realm of IP then (until the new world order comes into force and can make everyone do it ), unless the government essentially owned the patents on everything and licensed them globally and they were only available free in your country).
Patents are anti business, dispite the fact that they are being marketed as pro business by businesses that own them.
Patents are designed to encourage business and individuals to release information, leading to the benefit of society. The bargain is simple - tell us how you do something; spend time and money inventing something useful and you can exclusively reap the benefits of that for a set period of time. They benefit society as a whole - and they're a much better method of doing business than their alternative (trade secrets).
(I'm not saying that (certain aspects of) modern patent systems aren't anti-business or anti-society - they most certainly are. But the concept of a patent in general isn't.)