A more fully accurate version of my statement would be we wouldn't have "FDA approved" drugs, but I dont think it's accurate to say we would still have the drugs without for profit research. Many (most?) approved drugs are discovered and developed entirely within for-profit institutions. And much of the technology licensed from academia are just assays (not chemical matter) which are used by pharma companies to screen libraries of drug-like molecules, which they must then optimize before they can be "drugs". Sometimes companies license drug like compounds straight from academia but it is rare that these compounds are fully optimized for human use -- sometimes they are very rudimentary and wouldn't be suitable for human use without significant optimization -- and they aren't really yet "drugs"

Pharma companies don't just run clinical studies. They do a massive amount of discovery work and preclinical development, probably on the order of $100B worth / year

I do agree that drug testing reform can play an important role in lowering the cost of drug development. Things like not requiring cardiovascular outcomes studies for diabetes meds would be a great start, and providing clearer guidance for development of complex generics. However i dont know what else might be done that wouldnt compromise the quality of approved drugs, a lot of the difficulty is just our limited ability to directly study human biology