Consumer group launches drive to end state’s ownership restriction

BISMARCK, N.D. —Since the early 1960s, a restrictive ownership law in North Dakota has kept most of the nation’s chain pharmacy operators on the outside looking in. But pressure is mounting on state lawmakers to open the borders to outside competition.

A North Dakota consumer group has launched a new petition drive to overturn a unique, 46-year-old law that requires pharmacies in the state to be majority-owned by a pharmacist.

The law, which is similar to restrictions imposed on pharmacies in Canada, effectively prohibits such national-chain competitors as Walgreens, Target and Walmart from selling prescriptions in the state. The state legislature defeated a move earlier this year to repeal the ban on nonpharmacist ownership, prompting a group called North Dakotans for Lower Prescription Drug Prices to redouble its efforts to end the restriction through a statewide petition drive.

According to North Dakota secretary of state Al Jaeger, the group will need at least 12,844 signatures from state voters to get the issue on a statewide ballot in November 2010. Consumer advocates expressed confidence they’ll have more than enough names on a petition to bring the proposal up for a vote next fall.

North Dakota’s pharmacy ownership restriction, on the books since 1963, is the only such legal barrier to ownership in the United States. Consumer advocates argued it keeps drug prices artificially high by curbing competition, despite assertions from the North Dakota Pharmacists Association that the state’s consumers pay less than the national average for prescription drugs.

“It’s time this law was changed so 600,000 people can benefit from lower prescription drug prices,” asserted Tamara Ibach, a spokeswoman for the campaign working to overturn the law.

“As it stands,” she noted earlier this year, “the current law benefits…approximately 158 independent pharmacists who own drug stores.”

Arguing in favor of the restriction is the North Dakota Pharmacists Association. The group’s EVP, Mike Schwab, asserted that the $4 generic drug discount prices offered by some national chains are misleading because they mask higher costs for other drugs and merchandise.

One national chain, CVS Caremark, gets a pass on the restriction via a grandfather clause, since CVS operated pharmacies in the state prior to passage of the pharmacy-ownership law in 1963.