The reference says what happens with the greatly increased cost to develop a new drug, is the number of new drugs developed dropped dramatically. But the percentage that turned out to be effective stayed the same.

So, yes, we are worse off because of that, because we wind up with far fewer effective drugs.

A proper solution is for the patient, a legal consenting adult, to sign a piece of paper that says he understands that the FDA has not verified the drug to be effective.