Good morning Hank, it's Wednesday. On Monday you explained to us that Warner Chilcott, the pharmaceutical company that makes Asacol HD, the drug that keeps you alive and well enough to work, had unexpectedly and without warning overnight raised the price of that drug by more than 1200%. So you asked us to email the CEO of Warner Chilcott, Roger Boissonneault, which I did to say, you know, "Roger Boissonneault, you are doing a fantastic job."

In fact Hank, hold on the markets just opened. Hank, I've just acquired 100 shares of Warner Chilcott stock making me one 2 millionth the owner of the company that's ruining your life. You know why they're ruining your life? Because Roger Boissonneault doesn't work for you or the other people who have ulcerative colitis, Hank. He works for me!

Hank, if you go to Warner Chilcott's webpage you know what's above the drugs and above the company news and above the woman who is delighted to have inexplicably found herself in a field of flowers? The stock price. In fact Hank, Warner Chilcott's website is not located at warnerchilcott.com, it's located at wcrx.com, which is Warner Chilcott's stock symbol.

Hank, as you know I am a capitalist. I believe in free and open markets. I believe when you let suppliers and demanders figure out the price for something you get better, cheaper goods and services. But, I don't believe in unregulated free markets because that would be insane. For instance, I don't believe that Wal-Mart should be allowed to sell highly enriched uranium. The free market is really good at things like figuring out how much air fare should cost and fueling the innovation that makes it possible to make telephone calls without wires.

But Hank, there are some things that markets can't do, and the pharmaceutical industry is a great example of this. So Hank, if I were to ask you whether you would rather have a single pill that cures malaria or a single pill that cures male pattern baldness, you'd probably say, you know, the malaria pill. Right, because aside from the humanitarian argument, malaria is possibly the single biggest suck on world economic productivity-- aside from perhaps Call of Duty. And if we could cure malaria there would be millions of new people who could work instead of being sick themselves or taking care of sick kids, which would be a huge boom for the world economy. Unfortunately, the free market can't see that because all it can see is "Oh my God, if we cured baldness we would be so rich!"

So when pharmaceutical companies say that their profits go back into research and development they're telling the truth, but they're researching and developing lucrative drugs, not drugs that maximize the benefit to the overall health of the world. Hank, the truth is Roger Boissonneault is not in the business of providing you with Asacol, he's in the business of providing me with a return on my investment. So why did Warner Chilcott offer you their drug for 50 dollars a month and then raise the price to 620 dollars a month? Same reason crack dealers give out the first rock free and musicians release free downloads. First, you maximize the number of customers, then you maximize the profit.

Hank, the great thing about drugs like Asacol HD, I mean from the perspective of a part owner of Warner Chilcott, is that if you don't find some kind of gastrointestinal anti-inflammatory, you might die. And that makes you a super-motivated customer. Hank, you can't negotiate fairly with Warner Chilcott because Warner Chilcott knows how badly you wanna stay alive. That's why Asacol is, for instance, much less expensive in Canada where Warner Chilcott isn't negotiating with individuals, they're negotiating with the entire population of Canada.

Hank, the free market that works so well in so many fields fails miserably at providing efficient, inexpensive, and effective healthcare. As evidence I point to the fact that the rational response to learning that Warner Chilcott has Warner Chilcotted you and other people with ulcerative colitis is to purchase Warner Chilcott stock. That is insane! To me that is a strong indication that the market is not currently incentivizing good health.

Hank, the real reason the United States needs universal health insurance with good prescription drug coverage is not ultimately because it's the right thing to do, but because a healthier work force that spends its capital not on Asacol but on innovation and finding efficiencies in various industries will benefit the American economy. And Hank, I speak as an owner of the company when I say that if Warner Chilcott can't compete, if they can't deliver real drugs that help real people at a fairly negotiated price, than it can go Warner Chilcott itself. Hank I'll see you on Friday.