It also gave us a lot of snake oil, the list is too long. Let's choose one: Pearl power ( http://en.wikipedia.org/wiki/Pearl_powder )

> In medieval Europe, pearl powder was widely perceived to have therapeutic qualities. It was used to treat the insanity of Charles VI of France (1368-1422), and the fever of which Lorenzo de Medici died in 1492.

It is not clear that the FDA has anything to do with the pharma crisis. In fact, since the pharmco crisis began in the late 1990s and the FDA was founded in 1963, the two are completely unrelated. Since closely held pharmaceutical companies are doing better than public ones I'd point the finger at Wall Street, but that would be oversimplifying a complicated problem.

I think that "big pharma" companies act a lot like banks, and small companies act a lot like venture-capital backed startups.

Incidentally, both mechanisms allow spending a couple of hundred millions (or even billions) of Dollars for a potentially even bigger profit.

A third way is government financed research, which may be a competitive option in some cases.