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.
- The Benefits of North Dakota’s Pharmacy Ownership Law — ILSR report, 2009
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