Every way of dealing with something has its flaws, the point is to fix them. The patent system is flawed in its foundation, i.e. claiming a discovery for yourself and keeping this technology away from the rest of humanity.
For the rest, I wouldn't know why there wouldn't be multiple medicines. Labs would still come up with multiple compounds that have more or less the same result, and if not, research would continue for the people who fall outside the bell curve of the other medicine.
The whole difference would be that instead of competition, there is cooperation, and the aim is not to make money or profit, but to help humanity. This is not unrealistic, it's basically what we (at least in NL) learn in primary school: "Two know more than one", "Many hands make light work", etc. It's only that the schools after that tell us to forget it all and teach us how we need to compete each other and especially to keep everything for ourselves and never do anything without expecting something in return.
[quote]where companies use controlled distribution (such as with Daraprim) to prevent generics from being tested, and thus, being brought to market. [/quote]
This wouldn't happen, as the resulting medicine IS the generic.