The pill he found won't actually heal him. It will only make him feel as if he is uninjured and help him continue fighting by being unaffected by his injuries.
The pill is useless normally but he is not injured at all so it is more than useless to him. If he had weapons and armor, he might not need pills. Unfortunately for him, the forces that be of this world are against him and they have decided that he is better with pills than armor or weapon.
'I expected things to work out for me but it seems that even the sage cannot modify the rules. Either that, or I was being completely paranoid and the first sage doesn't care about the competition. I hope it's the second option." He thought to himself.