There are other countries, ones where it's legal to do medical experimentation upon any consenting party. Unsurprisingly, they don't create significant amounts of novel drugs. Why? Because the US system is more profitable, and, similar to how writing proprietary software is the most common way to earn a living as a software engineer, people like money.
Similar to platforms that claim to "democratize" a given hobby while at the end of the day being proprietary SaaS, people can claim as good of motives as they want, but at the end of the day, they want to make enough money to sit on their heels. The government strongly incentivizes drugs that are economically worthless without it.
The US system ensures that everyone gets paid. Laissez-faire drug development wouldn't. As better in theory as it may be, just like free software, in practice, you'd probably get fewer returns than the controlled system, just because people aren't altruistic, and nobody cares about niche diseases that doesn't have direct motive.