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Advancements in medicine have been tremendous over the past few decades — they've turned fatal diseases like HIV and AIDs into chronic conditions, slowed progression for arthritis and helped to prevent childhood illnesses with more vaccines, just to name a few examples.

This progress is the result of focused investment in highly risky drug development combined with advances in basic research from universities in the National Institutes of Health, said Ian Read, CEO of pharmaceutical giant Pfizer during a speech Thursday at the National Press Club.

"I can give you a very easy way of knowing what it costs to develop a drug. Pfizer spends $8 billion a year on research and development," he said. "We're lucky if we produce three drugs a year."

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There is no way progress in treatment can continue if people are not willing to fund this kind of modern pharmaceutical industry, Read said. Professionals in the business understand they have a responsibility to produce medicine for the benefit of all, at competitive prices. But, society needs to understand the costs and risks necessary for this growth.

"A successful drug will always, will normally be profitable," he said. "Unfortunately there's a lot of dry holes on the way to a successful drug, and you need to have a cash flow to support the entirety of the biopharmaceutical ecosystem."

Read said he understands many people struggle to afford the medicine they need, and points to failings of transparency by insurance providers and physicians as a main reason for this.

"Medicine reimbursement costs are often used by the system, insurers and providers, to avoid adverse selection," he said. "Adverse selection is when you have a higher proportion of sick people in your plan than competitors."

Most people don't know this, and to correct this lack of transparency two things need to be done, Read said: It needs to be made clear to patients what kind of care they are getting with an insurance plan and a patient focused benefit design should be implemented to meet the patient's needs.

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To listen to the speech, click the audio player above.

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Ian Read, the CEO of pharmaceutical giant Pfizer, speaks and answers questions at the National Press Club about prescription drug costs and  health insurance reform.

Ian Read, the CEO of pharmaceutical giant Pfizer speaks at National Press Club.

Pfizer CEO Ian Read speaks on health care costs and reform

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