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Rule filed under Independent Business

Pharmacy Ownership Law — North Dakota

| Written by admin | 1 Comment | Updated on Jun 11, 2009 The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/rule/pharmacy-ownership-laws/2832-2/

Enacted in 1963, North Dakota’s Pharmacy Ownership Law stipulates that only pharmacies that are majority owned by a licensed pharmacist (or group of pharmacists) may be granted a permit to operate in the state.  Its purpose is to ensure that pharmacists control and have a stake in the health care services they provide North Dakota communities.

Consequently, the vast majority of pharmacies in North Dakota are independently owned (a handful of chain drugstore outlets and chain supermarkets with pharmacies were already in existence in 1963 and were grandfathered in under the law).  Nationally, the number of independent pharmacies has fallen by one-fifth over the last ten years.  Their market share now stands at about 30 percent, compared to nearly 90 percent in North Dakota.

In the 1970s, North Dakota’s Pharmacy Ownership Law was upheld by the United States Supreme Court and by the North Dakota State Supreme Court, which reasoned, “Supervision of hired pharmacists by registered-pharmacist owners would be in the best interests of public health and safety.”

In addition to the legal challenges, the law also survived a 2009 legislative campaign for its repeal, financed and led primarily by Wal-Mart and Walgreen’s.  ILSR helped defeat the repeal attempt by publishing a report, The Benefits of North Dakota’s Pharmacy Ownership Law, which found that North Dakota has more pharmacies dispersed across rural areas than other states, has among the lowest prescription drug prices in the country, and reaps significant economic benefits from the fact that most of its pharmacies are locally owned. The repeal effort ultimately failed by a vote of 34-57 in the House of Representatives.

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North Dakota Century Code 43-15-35 (e) – Enacted in 1963

The applicant for such permit is qualified to conduct the pharmacy, and is a licensed pharmacist in good standing or is a partnership, each active member of which is a licensed pharmacist in good standing; a corporation or an association, the majority stock in which is owned by licensed pharmacists in good standing; or a limited liability company, the majority membership interests in which is owned by licensed pharmacists in good standing, actively and regularly employed in and responsible for the management, supervision, and operation of such pharmacy

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  • Roberta B.

    I grew up in North Dakota (where one of my relatives was a pharmacist and owned a drugstore), and have lived in the Twin Cities region of Minnesota for several years. FYI, my parents were also independent business owners, albeit not in the retail sector.

    For 16 years, I lived in a neighborhood near downtown Minneapolis. From my apartment, I had two independent pharmacies located approximately the same distance (one-half mile) in different directions. Unfortunately, these were two of only few independent pharmacies left in Minneapolis. At one time downtown Minneapolis alone had two Walgreen’s drugstores (one has since closed), and CVS opened near my old neighborhood in recent years, allegedly with the existence of a public subsidy.

    In 2008 I married, and my husband and I purchased a 1911 house in St. Paul, where old homes are often more affordable and property taxes are lower. Although I love our house, there is not any retail within walking distance, and the pharmacies that are a short driving distance away are chains, two in grocery stores (Cub and Rainbow), one Walgreen’s, and one CVS.

    My solution? I chose an IBA-member pharmacy located approximately halfway between where I live and work. This is somewhat inconvenient, but if life were primarily about convenience, it wouldn’t be worth living. Convenience has destroyed so many of the good things about America, from personal privacy (using debit cards instead of cash and checks; I too am guilty) to independent businesses.