Well, among other things, if anyone makes money selling colored water, it encourages others to sell colored water. It also encourages companies that are trying to sell actual drugs to skip that expensive "testing" phase. Bad money usually chases out the good (https://en.wikipedia.org/wiki/Gresham's_law) so it's likely that we will devolve into a system where very few drugs are adequately tested.
I'm not saying it never happens, but if a law, policy, or agency reduces big corporation profits, then it's almost always because lots of people were dying.
I just can't imagine that people would widespread start using drugs that aren't approved though. That's definitely something to watch out for though.
Or, it might indicate a financial incentive to get consumers to mistrust a barrier to profit. People in the aggregate are not the most rational actors, in no small part due to information asymmetry. Self interest does not necessarily yield optimal or even good results.
For example, take the new trend of waiving inspections when purchasing homes to outcompete other buyers. This is legally allowed in some places and is getting more common in places where it's a seller's market and there's lots of potential buyers.
Now I'm not so pompous enough to think that even after reading a few articles or books that I can reliably tell structural damage from easily repairable shoddy work. At least not enough that on a million dollar home purchase, I could risk being out of a home for a while or a couple of hundred thousand dollars.
But there are some buyers for whom this is not an impediment: ones who have enough capital that a bad house or two wouldn't make a big dent in their bottom line, and ones who don't truly understand the kind of risk they're taking and think they have a decent deal on their hands.
The result is that waiving inspections to buy homes is the new standard to be able to compete as a buyer at all, meaning there is now incentive to not fix serious issues in homes or even patch over them to make them less visible. Financial incentive for selling a better product reduces because the bad ones will sell. Quality of homes on the market goes down. Meanwhile those who can compete to buy the better deals are now a smaller population, but they still need homes. Price efficiency goes down because on average people are buying worse homes for more money.
Is it perfect? No. Could it be improved? Yes. But the rules exist for a reason.
We already did this experiment 1-Javascript-Framework-lifecycle-equivalent ago.
https://en.wikipedia.org/wiki/Ivermectin_during_the_COVID-19...
Personally, I do think this would happen, but I think there are better ways to combat this than to use force of law to gatekeep which molecules people are legally allowed to put into their own bodies. We could (and should) still require them to provide evidence for any claims they make, and failure to provide evidence opens them up for liability. There are situations in which paternalism seems justified, but I think in this we've gone way overboard.
For example you can bring your own non-FDA approved drugs with you to the US for personal consumption. I found the following document, section 9-2 covers this topic: https://www.fda.gov/media/71776/download?attachment
For the horrible things at the edge of treatability and beyond there are always many promising ideas most of them worthless or bad and the price people are willing to pay is either all their money or all everyone's money depending on whether insurance covers it.
If you don't allow insurance to cover it then only a handful of rich folks get soaked but this is politically difficult to maintain.
Now that said, I have a huge problem with this skipping. FDA rules need to be applied consistently and follow the process. I'm sympathetic to the desired outcome, but the problem is the system is set up as a gatekeeper. Fix the system, don't try to hack around it like this. That just further undermines trust and faith in the system.