1. There should be automatic licensing of the patent to anyone who wishes to make the drug, at a royalty rate on gross sales determined by statute. I'm thinking something around 5%.
2. The patent term should be extended from 20 years to something like 100 years.
The idea here is that drug companies invest huge amounts in developing new drugs. Many of these don't even pan out. Some make it into production, and they are patented for 20 years. The drug company then has to charge a lot to make up for that huge investment before the patent expires, and the generics come on market.
So, for the first 20 years we consumers pay something like $30-50/month (after insurance--it could be $200 or more a month without insurance) for these drugs until they go generic, then it drops to around $4/month (and that is without insurance!).
Under my proposal, the generics would come out right away, for maybe around $5/month, and the original company would make back its investment over a very long term instead of needing to make it back over a relatively short term.
This is in itself a problem: there is no separation between types of patents, so we can't (easily) get separate policy on software, business methods, pharma etc. I imagine, for example, no one would particularly complain about software patents if they only lasted for 2 years. But the way it is now, that would mean all patents would expire after 2 years, and the pharma lobby would hate that.
Having said all that, best thing is to get rid of all patents, and we'll start again when someone proves that narrow patents in a particular field have a benefit to the economy.