N.D.’s pharmacy ownership restriction spurs legal battle as legislature opens

MINOT, N.D. Independent and small-chain pharmacists in North Dakota are fighting to preserve a state law that requires pharmacies in the state to be majority-owned by a pharmacist, according to a local news report.

The law, which is similar to restrictions imposed on pharmacies in Canada, effectively prohibits national-chain competitors like Walgreens and Wal-Mart from selling prescriptions in the state. But the law is facing new challenges from consumer advocates who argue it keeps drug prices artificially high by curbing competition, despite assertions this week from the head of the North Dakota Pharmacists Association that the state’s consumers pay less than the national average for prescription drugs.

An advocacy group called North Dakotans for Affordable Healthcare is leading the charge to overturn the law, and is airing a television commercial to argue its case. “Prescription drugs do cost too much in North Dakota,” the group asserts in a statement posted on its web site. “Part of the problem is a law from the 1960s that limits the type of stores that can sell prescription drugs — stifling competition between pharmacies and creating a government protected system that drives up drug costs and hurts North Dakotans. We’re working to change that law and bring lower prescription drug prices to North Dakota through vigorous competition.”

The issue will be on the front burner as the state’s legislature reconvenes this week, according to local television station KXMC-TV.

Arguing in favor of the 40-year-old restriction is the North Dakota Pharmacists Association. The group’s executive vice president, Mike Schwab, told members of Minot’s Rotary Club Monday that the $4 generic drug discount prices offered by some national chains are misleading because they mask higher costs for other drugs and merchandise, KXMC reported.

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 the 1960s.