“Sure. But, as I see it, the relevant question here is whether the cost/benefit decision should be made on behalf of all individuals by a small group of government bureaucrats.”
Who pays, and is the cost relevant? That is really the question.
I assume you're alluding to a system of third-party payers (including insurance companies and/or the government) where the cost becomes relevant to more than the individual receiving the benefit?
If so, as you suggest, decisions like these are the inevitable result of government involvement as a payer of healthcare costs. And the further result of this decision can be nothing other then to have a chilling effect on further innovation within the lifescience sector.
I suppose the next question is, what then is the answer? In my opinion, policy should be to more directly align the cost and benefit received. Reintroduce the free market into this space.