Any state regulation of prices only worsens the situation and usually leads to higher prices, reduced purchasing power, shortages and economic decline. This was stated by Volodymyr Popereshnyuk, an entrepreneur and co-owner of Nova Poshta, commenting on the NSDC's decision to tighten control over drug prices, UNN reports.
The National Security and Defense Council has decided to strengthen control over drug prices. I don't understand why only medicines? Don't prices for other goods and services threaten national security? Wouldn't it be better to go back to the scoop and set fixed prices for all goods?
Mr. Popereshnyuk explained that two main factors determine market pricing: the activities of entrepreneurs and government intervention.
According to him, the activities of entrepreneurs are a source of constant price reductions, as they are the ones who are constantly creating new goods and services and trying to expand their business. Businesses are constantly trying to increase their profits, and therefore seek to increase the volume of products and, accordingly, the supply on the market, which forces prices to constantly decline.
According to the entrepreneur, the state, on the contrary, through regulation, licensing, taxation, and bureaucratic restrictions, hinders business development, reduces the supply of goods, and thus artificially increases prices.
What happens when officials start fighting "high" prices? They further exacerbate their own negative impact. They increase government spending on price regulation, increase pressure, and take even more resources away from entrepreneurs. Of course, this further reduces supply. As a result, we have higher prices, reduced purchasing power, shortages, the black market, and economic slowdown. Paradoxically, it is precisely those segments of the population that officials are supposedly trying to protect from high prices that suffer the most,
He is convinced that the only way to achieve low prices and a stable economy is through deregulation, tax cuts and privatization. According to him, any other way will inevitably lead to even worse consequences for business and consumers.
Recall
President Volodymyr Zelenskyy said in early February that a decision must be made to reduce drug prices.
On February 13, the President enacted the decision of the National Security and Defense Council to reduce the prices of the top 100 medicines by 30% starting March 1 for the most important medicines for Ukrainians. Other medicines should become 20% cheaper.
In addition, on February 14 , the Cabinet of Ministers held a meeting, which introduced new regulations on pricing of medicines. Among other things, starting from March 1, a ban is imposed on the provision of marketing services, services for the promotion of medicines, information and other services related to the sale of medicines to the end user.