That dirty dirty word: Profit

I've written two responses to this article on Thoughtleader.

http://www.thoughtleader.co.za/martinyoung/2014/01/29/how-money-is-more-important-than-lives-in-healthcare-technology/

G-man 1:

Why is profit such a dirty word to you? And what on earth do you think these people do with their profits? Stuff in under a mattress and count it every evening before going to bed?

As Adam Smith pointed out (maybe the basic understanding of how profit works in the world has escaped you), It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.

Profits are divided up into taxable stated profit, business expansion, continued research, investment in stocks and firms, and cash in bank. All of which benefits man as it either employs people, funds more products and discoveries, or lent to people to purchase homes or businesses etc.

It is sad that there are actual grown-ups in this world who cannot see any benefit to profit. Even those who spend their lives helping others do so for personal reasons other than the pure unselfishness of it. It is where they find fulfillment, but it rarely does anything near as good as what ‘the profit’ does.

G-man 2 after some feedback:

From time of discovering a new drug, to submitting it to the FDA for approval, to having it tested, tried, checked, double checked and then finally having it peer reviewed and then placed into the mouth of the first patient, the cost is approximately $1 billion. GOVERNMENTS have made this so expensive, NOT private industry. Who the hell can go through all that for free? It makes perfect sense that if your initial outlay is so risky, and the expected returns so precarious that it would take financiers an awful lot of comfort before they would consider risking this sort of money. It is NOT the profit factor that makes these industries shy away from certain drugs, but the high cost of doing business, even before you CAN actually do any business, that makes it the high risk and costly industry it is.

But while we're at it, what is the percentage of taxable profit on any given drug? Or do you honestly believe everyone should be working for free in this industry? And why should people have to suffer in order to meet your general approval by working for mahala? As if this noble act is payment enough.

The average profit margin is around 12.2%. Most of that gets re-invested, taxed and used to fund the next project. What remains is in the low single figures. By removing this (even as the mild incentive it is) what difference to the overall cost will you be saving?

Personally, I'd rather take drugs from PROFITABLE businesses than those claiming virtuous poverty.