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The Associated Press February 16, 2011, 9:19AM ET

Struggle resumes over ND pharmacy ownership rules

Months after a voter initiative to abolish North Dakota's restrictions on pharmacy ownership foundered, the long-running debate resumed Tuesday in the Legislature, without lobbyists from big-box stores who have advocated repealing the law.

North Dakota is the only state in the nation that requires pharmacists to have majority ownership of most pharmacies. The law prevents major retailers, such as Walgreen Co., Wal-Mart Stores Inc. and Target Corp., from operating pharmacies in their own stores.

Rep. Thomas Beadle, R-Fargo, who is sponsoring the latest attempt to repeal the ownership restrictions, said he was not doing so at the behest of large retailers. The North Dakota House's Industry, Business and Labor Committee took no action on the bill after holding a four-hour hearing Tuesday.

"I'm not arguing that we ought to prefer chain stores over independent retailers," Beadle said. "I'm arguing the citizens have the right to choose for themselves wherever they feel is best."

North Dakota's law has been in place since 1963, surviving a number of repeal attempts and a legal challenge that reached the U.S. Supreme Court.

Two years ago, the House defeated repeal legislation despite a high-profile organizing and lobbying effort backed by Wal-Mart and other large retailers.

After the loss, repeal supporters circulated a petition to put the issue to a statewide vote, but it failed to reach the ballot after Secretary of State Al Jaeger discovered flaws in the petition. Jaeger's decision was appealed to the North Dakota Supreme Court, which ruled in his favor in September.

Beadle, who is a freshman lawmaker, said more competition in the pharmacy business would drive down prices and create more jobs for pharmacists who want to work for bigger companies.

So long as all pharmacists must get the same certification and follow the same ethics, he said, the market should be open.

"Supporters will stand here and tell you independent pharmacies have better service and lower prices," Beadle said. "If that's truly the case, they'll have nothing to worry about in a competitive market."

A pair of hospital pharmacists also supported the bill, which would lift restrictions on hospitals that can now only dispense drugs to their own patients.

Rick Boehm, pharmacy director at St. Joseph's Hospital in Dickinson, said the law prevents patients who have left the hospital from returning there to buy specialized prescriptions.

Boehm said hospital patients who have been released sometimes need an intravenous drip that Dickinson pharmacies cannot supply. The patient then must drive to Bismarck to find a pharmacy that could provide the IV drip, he said.

An array of pharmacy organizations supported the law, which they said makes North Dakota the envy of pharmacists across the country.

"The point is, the pharmacist stays in control of the decisions for the patient," said Howard Anderson, executive director the North Dakota Board of Pharmacy. "Of course, the law doesn't force anybody to make the right decision, but it puts them in place to make the right decision."

A handful of major chains have an unfair grip on the industry in most states, they said, and profit demands can interfere with patient care.

"North Dakota is cheaper than the national average," said Shane Wendel, who owns pharmacies in New Rockford and Carrington. "We get that done by spending more time with our patients, which we can do because we're in control. We get to make that decision, not corporate America."

Pharmacies operating when the law passed in 1963 can operate without the restrictions, and some have passed on their permits through changes in ownership. Several CVS pharmacies in the state still operate under the exception.

The law also allows grocery stores and other businesses to lease space to independent pharmacies, and own up to 49 percent of the pharmacy.

The bill is HB1434.

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