I also find economic arguments like you make here generally convincing, arguing against this (that risk increases costs which must be priced in) would be similar to arguing against the Laffer curve. This is essentially close to my position, but different to the person I originally replied to.
I do have an optimistic bent that, through either ignorance, arrogance or risk-seeking, people actually over-risk on experimental therapies, for example, launching Biomed spin offs. Because the personal gain (curing a disease, helping people, or becoming popular) can be so high, it can motivate risk beyond other busiensses. This is probably where I most differ from you: I know many businesses which should not exist, have never turned over profit, and maybe never will. But a rich family, or the savings from a lifetime of earnings sometimes get put into these shots at success. It's not like they get cut once the net profit reaches 0. Same with local shops: A number of the local shops you can't understand running profitably survive because they have paid-off mortgages and only have stocks/staff/licensing to deal with. It makes little financial sense to run them over renting the shop to someone else for more profit, yet people do.
Perhaps this extra reason to stay invested/risk on Biomed is matched by the fraud in that industry, though (Hello Theranos).
Regards the later point, I understood that though my comment could have been phrased better. The meaning was "the government will force [as necessary by asset seizure or bankruptcy] the breach-of-contract party to pay you".
> It's the fact that options laid out on the table with unknowns can be preferable to people than no options, or fewer options.
Assuming you're talking about me, that's not exactly my point. I didn't intend to make any assertions about what patients or their families should or should not do, or in general any normative points (though I did use the word "justification", which I shouldn't have).
Rather, what I was saying is that businesses that aren't profitable cease to exist, and if the business's product is an experimental medical therapy that could end up killing a substantial fraction of its patients, the business might lose money when those patients' families sue the business. It's fairly predictable that a good fraction of experimental therapies will have this outcome, even if you don't know which ones in advance. Consequently, businesses that don't price it into their business model will, in most cases, go bankrupt after their first few successful therapies, making them unattractive for venture capital.
So the high price tag is somewhat predictable, whatever you may think of its moral status.
Separately, your comment seems to imply that damages on breach-of-contract and similar civil tort cases are paid to the plaintiff by the state rather than the defendant. That is not correct. They are paid by the defendant if they are paid at all. In the US, you can also file a civil tort case for conversion against someone who stole your car and get awarded damages in the same way.