Bidding wars.... working as intended
There is nothing you can do, Google's aim is to make as much buck as possible and their bidding system is designed to drive up the price of adverts. Therefor their current design model is working as intended and there's not much you can do on broad keyword searches.
Using Google Adwords is all about your profit margins
A lot of people when deciding wither or not to use Google adwords for the first time make the mistake of being blinded by the bidding cost. Advertising is expensive and varies from niche to niche, depending on the margin of profit on goods will ultimately effect the bidding price. A product with a margin profit of £10 vs a product margin of £100 will generally have a lower bidding price because you should expect your adword compagns to eat into your profit margins. A high profit margin means you can normally afford bigger bidding prices.
Conversion and profit margins
When using Adwords you need to work out your conversion rate, so if your profit margin is £11.75 and it costs you £1.75 per a click and it takes you 5 clicks to get one sale meaning you spent £8.75, and your profit margin drops from £11.75 to £3.00, while this look awful its important to note that adwords is more beneficial for a bigger scale, 10 conversions that becomes £30.00 profit, on 100 customers £300 profit and on 1000, £3000.
A work around could be that you go for less competitive, and less broad keywords. A similar product that isn't very well know may cost much less meaning your profit margins in price. There are many Google Adword management companies that can assist you in keyword research and working out your conversion, of course this will eat into your margins again but, depending on volume of sales both these can still be ROI.