While I'm sure a case could be made that IP protection is necessary in biotech, isn't the example you gave actually evidence of the the opposite -- that patents stifle innovation and research?
I think it's the opposite. Since it costs so much $ to fund clinical trials and apply for regulatory approval, the lack of patents would stifle innovation because the pharma company that discovered the drug wouldn't be able to recoup their development costs if other companies were waiting in the wings, ready to sell a generic version of the same drug.
If development costs (especially regulatory approval costs) go down significantly, then I think you can argue that drug patents are an unnecessary evil. But if things stay as they are, then they are a necessary evil.