If the US managed to save money on healthcare, that extra money should go to universities so that the results of the research are not proprietary to pharma companies, but instead can be used by anyone.
That's not how it works. Commercialization of drugs from University research is what already feeds a multi billion dollar industry.
That's how it could work.
How exactly do you see a system working that way? We establish a single payer plan and just start taxing everyone based on the current estimated healthcare expenditures and blindly shove money at universities?
You shove money at universities and don't patent the drugs they come up with so that companies can compete on the price of manufacturing them.
Then why restrict it to public universities? Give private universities and pharmaceutical companies funding as well, with the stipulation that research resulting from that funding be public domain. Public universities are not special entities in this (which is the GP's point).