> What universities typically produce is not a chemical that can serve as an actual drug, but is only a starting point for a long and expensive process of producing such a chemical

Remember you need to include all the failed attempts at finding useful things at university labs to see how much governments spend on research (just like you did failed pharma attempts), and if you add that up you see governments actually contribute a massive part of the cost to bring medicines to market.

What they produce is necessary to even begin the work pharma does, currently it is basically a gift from the people to the pharma industry.