This seems to me to be the trap of a false choice between regulatory power without bounds vs no regulation at all. A much more interesting discussion would be a

This seems to me to be the trap of a false choice between regulatory power without bounds vs no regulation at all. A much more interesting discussion would be about the proper scope of regulation. To take your example regarding pharmaceuticals, instead of mandating a particular regime of testing and efficacy, why couldn't the government require products that have not passed that particular hurdle be labeled as such?