That's how the FDA works.

The FDA is required to approve the study plan, the pharma (or really, the contract research organization (CRO) acting on its behalf) reports back to the FDA. The FDA decides based on the reported study result (reported to the FDA) whether the drug can be marketed and under what constraints.

Why should tax payer pick up the tab on a clinical trial like this? Over the life time of a modern drug, the clinical trials required can easily approach $1B.