I'd be happy to argue that unregulated sales of new drugs _could_ be beneficial. We'd just need a little thing called transparency; something which the current regulatory system hardly engenders. Instead, we get secrecy and liability protection for the pharmaceutical companies, all in the name of progress.
For example, in the book you cited, the authors note that they believe it would be more efficient for the government to simply pay for tests directly, rather than using an indirect system of taxation, viz patents. But you could have that independent of drug controls. The only regulation you'd need is for clear labeling, such as labels which say "FDA tested and approved for XYZ condition" and the like.
That would dramatically bring down the cost of pharmaceutical treatments. Theoretically the overall incidence of harm in the population could go up; but my guess is it that it would go down. It's hard to put numbers on such things anyhow, because of hidden abuses in the current system, as well as coming up with reliable and credible counter factuals.