"So, in 2006 the US FDA started the Unapproved Drugs Initiative. The US government said they would give an exclusive right to the drug to anyone who did the science."
This right here is the problem. The US government could easily have put a 1 cent tax on every pill and used it to have the FDA contract out the safety research.
But instead it chose to grant a private venture yet another monopoly.
This would still leave the question of deciding which, of an huge number arguably medical human activities to subject to scrutiny. Various commercial interests will find ways of sticking their noses into the game of maybe-maybe-not banning something.
This right here is the problem. The US government could easily have put a 1 cent tax on every pill and used it to have the FDA contract out the safety research. But instead it chose to grant a private venture yet another monopoly.