SEVERAL BELIEFS ARE COMMONLY HELD ABOUT HEROIN. IT IS HANDLED BY A HUGE INTERNATIONAL ORGANIZATION, WHICH CARES MAINLY ABOUT PROFIT MAXIMIZATION, AND CARES MINIMALLY ABOUT CONSUMER WELFARE. A DISTRIBUTION HIERARCHY EXISTS TO MAXIMIZE DRUG CONSUMPTION, AND THE ORGANIZATION CREATES A HARMFUL NEED FOR HEROIN FOR PROFITMAKING MOTIVES. FINALLY, DISTRIBUTION ENTAILS RELATED CRIMINAL ACTIVITIES. THE LIMITED RESEARCH AVAILABLE DEMONSTRATES THE INCORRECTNESS OF THESE BELIEFS. FOR EXAMPLE, IN SOUTHEAST ASIA, HEROIN PRODUCTION AND DISTRIBUTION IS HANDLED BY A VARIETY OF SOURCES, MOSTLY SMALL TRADERS, RATHER THAN A SINGLE LARGE ORGANIZATION. IN AUSTRALIA, THE ACQUISITION RATHER THAN THE DISTRIBUTION OF HEROIN IS IMPORTANT TO THE HEROIN SCENE. ADDICTION SPREADS AS A RESULT OF SHARING, NOT PUSHING, AND 'DONORS' BENEFIT BY RISING IN STATUS WITHIN THE SUBCULTURE SYSTEM. PARTICIPANTS ARE USUALLY YOUNG, WHITE, AND MIDDLE-CLASS. FURTHERMORE, THE AUSTRALIAN HEROIN MARKET IS NOT LUCRATIVE ENOUGH TO ATTRACT LARGE-SCALE ORGANIZED CRIME. IN CONTRAST, LEGITIMATE DRUGS ARE HANDLED BY HUGE ORGANIZATIONS WELDED INTO A SINGLE NETWORK AND SPREADING ACROSS INTERNATIONAL BOUNDARIES. INTERLOCKING SHAREHOLDING LICENSING, AND TERRITORIAL MARKETING RIGHTS SHUT OUT COMPETITION AND PROMOTE POWERFUL BARGAINING POSITIONS WITH GOVERNMENTS. DRUG COMPANIES IN THE U.S. ACCUMULATE YEARLY PROFITS THAT DOUBLE THOSE OF OTHER COMPANIES. MARKETING PRACTICES TEND TO OVERSTATE DRUG BENEFITS AND DOWNPLAY RISKS. THE CASES OF THALIDOMIDE, ORAL PREGNANCY TESTS, ORAL CONTRACEPTIVES, AND MILK POWDER CONTAINING SALMONELLA ARE EXAMPLES. THE LEGITIMATE DRUG TRADE, THEREFORE, CONFORMS TO THE BELIEFS HELD ABOUT HEROIN PRODUCTION AND DISTRIBUTION. FOOTNOTES AND REFERENCES ARE INCLUDED. FOR RELATED ARTICLES, SEE NCJ 62118 AND 62120-62126. (CFW)