I had a conversation last week with a fellow I consider to be a fairly bright guy. He commented on the absurdity of the proposed ObamaCare package. He seemed to have a pretty good grasp on how government intervention into the medical system would negatively affect his ability to make his own medical choices and had no problem understanding the disastrous impact an additional trillion dollars in government spending would have on our already shaky economy. But then when all was said and done he made a most puzzling comment. He said “But the government really needs to do something about the cost of medicine.” When I asked him to explain he said “Well, medicine is too expensive and the government needs to do something about the cost.”

How very strange I thought. Here is a guy who is in business. He understands how businesses work. The last thing he would want is for the government to control or mandate what he was allowed to make on his products and services. Why, when it comes to drug companies, does he think it works any different?

We live in a remarkable time of unparalleled advances in just about every area of our lives. Advancements in technology have brought about remarkable breakthroughs in medicine and medical treatment. In the past decade alone we have witnessed the introduction of life-altering drugs for just about every disease known to man. The question one needs to ask is, were the pharmaceutical companies motivated to develop these new wonder-drugs for the purpose of being altruistic or were they motivated by the potential financial returns? The answer seems clear to me. We enjoy the lifesaving and life-improving qualities of these innovative medications because somebody took the risk of a huge capital investment in the hope of a successful outcome and making a buck in the end. Drug makers are publicly traded companies and have the same fiduciary responsibilities to their share holders as any other. They take great risk for the opportunity at great reward. The system that drives companies to make these new discoveries is capitalism at its finest.

Instead of looking at these corporate profits as a bad thing we should be applauding their success. Every dollar they make equates to lives saved or improved and enhances their ability to reinvest in further advancements. It is perhaps the routine success of new drug therapies that has jaded the American public into believing that we are somehow now deserving of the benefits garnered by years of trials and billions of dollars R & D. What once was viewed with gratitude has become an expectation.

We have lost our sense of astonishment and developed an attitude of self-entitlement. Medical treatments that would have been unthinkable only a few years ago are not only possible today but commonplace. So much so that we forget it not only requires enormous amounts of capital to get a new drug onto the market but that it takes just as much to have a new drug fail the trials and go nowhere. Billions of dollars are spent in developing and testing new drugs before anybody knows if the investment will pay off. The only possible motivation for such risky investments is the opportunity to recoup the investment on the failed drug trials with the profits from the successful ones. Unlike government drug companies use their own money and also unlike government deficits have to be repaid.

A drug company is only as good as their next success and to limit their return on investment would do nothing but stifle research and bring the almost daily breakthroughs of mind-boggling medical advancements to a screeching halt. As I told my friend during that recent conversation “If you think the price is too high, don’t take the pill.”

I’ve seen what the government can do when it gets involved in business. The last thing I want is a “Cash for Cardiac’s” program or a “Dollars for Diarrhea” rebate plan.

And just how do these wonder-drugs work?

They work just fine.