Imagine for a moment that your parents ran a pharmaceutical company. They've recently developed a new drug that attacks the prions responsible for Creutzfeldt-Jakob Disease and it shows promise in the lab. And by "in the lab", I mean in a petri dish, not in animal tests.
Now, you know as well as anyone that CJD is both currently incurable and fatal in 100% of cases, so you allow yourself a flash of optimism. But you temper your glee because you know that FDA regulations insist on two hurdles before drugs may be brought to market: the drug must be "safe" (holy epistemological problem, Batman) and "effective." The safety criterion is a garden-variety precautionary principle measure, bound in the ubiquitous Hippocratic maxim primum, non nocere: do no harm. Knowingly inflicting harm is criminal mischief, unknowingly inflicting harm is at the very least non-euvoluntary and quite probably criminally negligent. But what of the efficacy requirement? The FDA imposes prior restraint on drug manufacturers to shield consumers against buying placebos. Why? And where's the public outcry?
Establishing efficacy is expensive and time consuming. And much more so when the drugs are to treat rare conditions like CJD. Every year that passes in which a drug is stuck in regulatory purgatory is a year in which patients don't at least have a Hail Mary shot at a cure. Is protecting folks against getting ripped off at the pharmacy so important that the US regulatory authority will routinely, cavalierly send patients to the grave? Or if you're more inclined to the Tullockian view that the raison d'etre of regulators is to protect incumbent organizations, how is it that voters' moral intuitions don't have them storming the gates of 10903 New Hampshire Ave, Silver Spring, MD?
I have a feeling that it's a BATNA disparity issue. Big pharma is suspect because it's big pharma, and for no other reason. Rhetorically, that's a tough point to dismiss. This bias, the skepticism of large organizations (particularly when driven by the profit motive), is well-entrenched. But I urge you, gentle reader, to indulge a Solonic substitution. Imagine it's your parents rather than Ian Read running Pfizer. Under what circumstances should you be willing to let them hawk their wares. Would you let them sell poison to the public? No, of course not. Would you let them sell a drug that maybe might work to fight a rare disease, but might also just be a dud? I'd like to think that you'd lend them and their customers the benefit of the doubt.
Perhaps Plato's Divine Maxim is a better heuristic for regulation than a muscular precautionary principle.