When considering proposals to weaken patent monopolies, drug development seems like the main type of innovation that would be hurt.
Most of drug development cost seems to be verification of safety and effectiveness, which doesn’t look like the kind of novelty-creation patents are designed to help, but that doesn’t mean it’s easy to implement an alternative.
It turns out we have an example of a company making monopoly-style profits from an unpatented drug (Questcor Pharmaceuticals, Acthar).
Questcor bought Acthar for $100,000, suggesting the seller expected it would hardly make any money. Sometime later Acthar was designated an orphan drug, and Questcor raised the price from $1,650 to 28,000 per vial, without causing competitors to sell it. It now gets profits of roughly $300 million per year off of it.
So something must be restraining competition, probably something connected to the orphan drug laws, suggesting that if protections for patents in general were weakened, it would only take small changes in existing rules to maintain existing incentives for drug development.