Jim Edwards, writing for BNET, lists 10 ways that Big Pharma rakes in the bucks. Some are legal, none are moral. He also suggests reforms for each one of them, but I know how likely (given where campaign donations go) these reforms would be enacted. I'll let you read the whole list and just mention a few.
* Your drug prices going up? That's usually because the drug company is searching for the price at which insurance companies begin to balk at paying for the drug. For a drug that first went on the market at $10 a dose (and thus less than that to make) may find insurance companies don't give notice until the price is up around $1500 a dose (and I'm not missing a decimal point). No insurance? Oh well.
* Drug companies pay off the makers of the generic versions of their drugs to hold off the introduction of the generic.
But we need lots of money to test drugs! they say. But much of that money goes for dividends, not research.