North Dakota Defeats Walmart-Led Effort to Overturn Pharmacy Laws

The state is the nation's only that effectively bans chain stores from owning pharmacies, and voters want it to stay that way.
by | November 5, 2014
A Walmart with a pharmacy in Missouri. MCT/Robert Cohen

North Dakota’s independent pharmacists have again beaten back an effort by Walmart and other chain stores to operate pharmacies in the state -- and it wasn’t even close.

About 60 percent of voters said “no” to a measure that would have repealed a 1963 law restricting ownership of pharmacies to pharmacists only, which effectively keeps out chain stores owned by large corporations. 

The law is the only of its kind in the United States. Other states eliminated similar statutes through their legislatures or other avenues over the last half century, but about 10 European countries, including France and Germany, have similar laws. England and some northern European nations have pharmacy ownership laws closer to most U.S. states, though some cap the market share of any single company.

North Dakota’s Measure 7, backed with more than $2 million from companies like Walmart, was hardly the first challenge to the state’s pharmacy law. The U.S. Supreme Court upheld it against a challenge from Snyder's Drug Stores (a pharmacy chain later absorbed by Walgreens) in 1973. The legislature has taken up the issue repeatedly, twice in the past five years alone. Over that period, opponents of the law have also tried twice to get the issue on the ballot.

Measure 7 proponents tried to make the case that the state has higher-than-usual prescription costs and opening up the market to chain competitors would both lower prices and improve access. Opponents and a think tank that promotes local ownership of business countered with data of their own showing the state’s prices were actually better than those of neighbors and pharmacies are more available than the national average.

Independent pharmacists argued that letting chain stores into such a rural state would lead to some additions to more urban places at the expense of local pharmacies dotting the towns where it makes no economic sense to open a chain store. "That's what it comes to: even if Walmart may be 100 miles from your town, the market forces they can exert can still hurt the local stores," said Mike Spiese, a North Dakota pharmacist.

People realized they still need that local option, he argues. Still, it's likely there will be fresh efforts to repeal the law, but after voters solidly rejected the measure despite lopsided spending, it could be a while, Spiese said. "They have deep pockets, so they'll keep trying," he said. "But in a 60-40 landslide, it doesn't bode well for them."

It remains to be seen whether the state can maintain that kind of support for what some outside experts consider an outdated law while its population explodes with the shale oil boom--bringing in outsiders who might not share the outlook of North Dakota's independent pharmacists.