1) Our government regulates the sorts of medicines that you're talking about anyway, at a cost of hundreds-of-billions of dollars to us. So, the truth would appear to be exactly the reverse of what you say: the market knows that some drugs are useless, and the State regulators seem not to.

2) Government financial regulators failed to make mention of any "mortgage crisis" until a year-and-a-half after the USA Today published the first story that shows up on a Lexis-Nexus search about the bad policy and dangers represented by sub prime lending. The market, then, was light-years ahead of the government on one of the primary economic occurrences of our day.

3) Government interpretation of the data they see is only as good as the bureaucracy they've developed and the economists they've hired. Lack of efficiency in the bureaucracy will almost necessarily offset any better access to information a government might have (if such exists). The "me too" thinking that most professional economists adhere to, given their similar educations (Ricardo, Veblen, Smith...names from a different economic world that most economists still use to justify idiotic and destructive actions such as giving away a nation's manufacturing sector in exchange for value added plastics), indicates that the government doesn't have the capacity for descent that's necessary to anticipate economic change. Private business and investors anticipate, and government is always reactionary.

4) While Europeans spend less on healthcare, they get a worse result (which is perfectly reasonable). For instance, U. S. cancer patients outlive Europeans. We, too, could spend less money if we wanted European-like results.