Institutes like the NIH fund and do basic research and population health studies.
Drug companies do some basic research too, but their focus is on applications like drug development.
There's a large but not complete overlap.
Think of it like lasers.
NIH is where you might see someone do research into the theory of light.
The commercial medical industry is where you might see research into creating lasers of a particular colour, power, etc.
Paul Otellini and Brian Krzanich (both from sales background) have made such strategic mistakes its hard to overstate, combined with the govt office work culture makes it not a great place to work