Okay, that’s an inflammatory statement. But consider the recent ImClone scandal. The company was working on a hot new cancer drug, their stock flew up to $80, and all the shareholders were in heaven. Then the FDA alerted ImClone executives that their drug — Erbitux — would not be approved for 2002. Breaking all insider-trading laws, ImClone CEO Sam Waksal alerted his family, dumped his own stock, and even contacted celebrity friend Martha Stewart, who sold $230,000 before the news got out and the stock tanked … leaving everyday investors holding the bag.

These sordid, venal details are all well known. And many reporters and pundits have thus concluded that Waksal and Stewart and all the other greedy executives were up to no good, and that ImClone got what it deserved.

Unfortunately, there’s a whole other bunch of people that got screwed: Cancer patients. In a brilliant story for United Press International, Mary Culpeper Long notes that cancer scientists and advocates worldwide think Erbitux is not a scam. It’s the real deal, a genuinely good piece of science and engineering that might save lives:

According to Dr. Harmon Eyre of the American Cancer Society, “there’s no question about the fact they’ve opened a new era.”

But Erbitux’s success relies on ImClone’s success. And ImClone’s success relies on its executives operating in honest, good-faith, above-board ways. When Waksal screwed around with his insider trading, he risked messing up ImClone so badly that Erbitux might never make it to market. So you can see where this is going …

The success of Erbitux and other ground-breaking new medical treatments seems to be inextricably tied to the behavior of corporate executives and the health of their companies. As a result, the health of Americans, in this case those suffering from cancer, is not only in the hands of scientists — but of corporate executives as well.

Precisely. When Sam Waksal speed-dials Martha Stewart so they can save a couple hundred thousand bucks and afford a more stupidly lavish winter vacation, they’re not just being greedy. They’re also potentially killing people with their self-serving actions.

Of course, we could be more sympathetic to Waksal. ImClone is a free-market enterprise, after all; Waksal was running a company, not a charity, and there’s nothing in his charter that says he has to serve mankind. Quite the contrary. A public company has only one Asimovian prime directive: By law, it must “maximize shareholder value” or get hauled into court. So to be fair to Waksal, he’s only doing what businesspeople always do — playing a risk-taking game in hopes of making more dough. Fair enough.

But one could also ask: Does this arrangement actually serve society? Should we really be developing life-saving drugs using the same marketplace that develops Nike Shox, the Terminator movies, and Cheetos? The free market can be a quite nifty thing, but it frequently forces CEOs to skate on ice so thin it risks destroying their corporations. When lives hang in the balance, is this such a hot idea?

(Note: Zach of Zoombafloom wrote an excellent critique of this posting; check it, and my windy response, out here.)