The latest Kaiser Family Foundation survey on attitudes towards pharmaceutical companies returned some fairly interesting results, namely, that Americans are pretty clear on their desire for more government regulation of Pharma, and fairly unconcerned with the effect that could have on innovation.This actually strikes me as the dark side of populism. I'm not convinced that, say, national healthcare in the United States would actually have much effect on pharmaceutical innovation (see here for more), but it's certainly something we should at least be concerned about. Of all the arguments against national healthcare, it's the only one that seems to have some serious basis in fact.
As Ezra says, however, there are ways to ameliorate this if it turns out to be a serious problem. Lots of basic pharmaceutical research is already done by federal agencies (or by universities with federal funds), and that could be increased. Prize funds could be instituted. The patent process could be reformed. We could ramp up requirements for genuine evidence-based assessments of new pharmaceuticals.
In other words, this is hardly an insurmountable problem. But it's definitely one that we should at least be sensitive toward.