The more-or-less unregulated drug industry that you envision is something that already exists: it's called "health supplements." And it's a disasters; there's been quite a few studies that show that many of the companies selling health supplements can't even be bothered to put in their claimed active ingredients.

This isn't some hypothetical "well, we haven't tried to see what it would look like without regulation;" this is something that is already in existence and whose effects can be measured today!