---
title: "Economic propaganda or illiteracy?"
author: "Stan Voo"
url: https://www.99rabbits.com/blog/economic-propaganda-or-illiteracy
published: 2009-09-25
summary: "A TV program claimed drug prices are high because there are too many sellers, and wanted more inspections. Either it was made to order for the state, or the journalists never learned economics."
---

# Economic propaganda or illiteracy?

![](https://www.99rabbits.com/blog/economic-propaganda-or-illiteracy-1.webp)

Yesterday, while washing the dishes, I overheard part of a TV program about the "vicious" pharmacy business. The main points:

- drug prices are inflated because there are **too many** pharmaceutical distributors (!);
- imported drugs **go through just one** quality check, at the border, and only some samples are physically tested, not the whole batch;
- the state exercises **insufficient control** over the pharmaceutical industry.

The journalists ran an experiment: they went round three pharmacies and asked in each one how much Corvalol, a cheap and hugely popular sedative, cost. The difference was about threefold, if I'm not mistaken. Their conclusion: the "damned" capitalists are getting rich off the people by setting whatever drug prices they please.

They also complained that France has only 4 drug distributors, while Russia has a whole 1,000.

I got the impression that the whole program was made to order for the state, pure and simple: part of preparing the masses to give a warm welcome to some screw-tightening reforms. And then [Davydov's post about the waves of military-patriotic TV series](http://davydov.blogspot.com/2009/09/blog-post_25.html "Davydov's post") added to my confidence.

The second possibility is simple economic illiteracy on the journalists' part. **How can anyone claim that prices on a market rise because the number of sellers increases?** And if 5–7 links of distributors take part in the drug supply chain, that's probably because no single one can cope with the whole range, or there are some other objective reasons for it. And, of course, because the Russian market differs a little from the French one in scale... A little, just a teeny bit...

How can anyone think that more inspections will improve the quality of the goods on offer without raising prices? How can more inspections be justified at all? Bureaucrats always act like this: **instead of fixing the existing mechanism**, they hang a new, even more elaborate one on top of it:

> *"From every woman you weren't married to, bring us a certificate."*

Can you imagine a machine like that starting to work?

No, I don't dispute that what's sold in our pharmacies is a big problem, and it definitely needs fighting. But first of all we need to fight those who inspect only specially prepared boxes at customs, those who write out any permit for money... And what we're offered instead is a fight against business...