I think the monopoly that the FDA has on approving medical equipment and tests has had far more of an impact than any commercial concerns.
Also, their drug regulations don't take into consideration rational decision theory and instead are overly focused on traditional hypothesis testing.
Also, I'd suggest reading the following about how bad regulation kills people: http://www.josiahzayner.com/2020/04/all-my-friends-are-dying...
They had finally cleared a heart attack prevention drug for sale in the US that had already been legal and approved and prescribed in the EU for 10 years prior. In the press release, the FDA said that as a result of their benevolent approval, the drug would save 100,000 people a year.
It's easy to say that a group is unnecessarily cautious/reckless until that cautiousness/recklessness saves lives or kills people. Hindsight 20/20 and all.
At any rate my point wasn't that the FDA only makes bad decisions.
My point was that it has a monopoly on approving new medicines and therepeutics, and it is not at all clear that this monopoly is a net good or net bad. (And it's impossible to measure because we can't tell how thing would have played out for things that never happened)
A: Approve a drug that turns out to be a "cure worse than the disease", and shouldn't have been approved.
B: Not approve a drug that would have cured many sick and/or saved a lot of lives.
You can never fully know beforehand which error a decision will have. So the FDA will always gamble a bit in their decisions.
And here is the gigantic problem:
With a type A error, patients taking the new drug dies, there is an uproar in the media, the agency takes a big beating, and careers are ruined.
With a type B error, a lot of people who could have been saved dies. But that is no change from before, no one notices, and the careers of FDA officials are unharmed.
Given these incentives, it is not surprising that the FDA overwhelmingly errs on the side of type B errors. It's hard to compute, but the number of lost lives from this is probably in the millions since the 60s.