Law requiring pharmacies to be owned by pharmacists may be challenged

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MINOT (AP) - Legislators expect new challenges to a North Dakota law requiring that pharmacies have pharmacists as their majority owners.

Bills to change the law have been rejected earlier, most recently last year.

"It's always met with resistance because of the threat to small-town pharmacies," Rep. Clara Sue Price, R-Minot, said. "However, I foresee the day coming when that bill will pass."

It would have to pass over objections from the North Dakota Pharmacists Association and North Dakota Board of Pharmacy.

"We think the pharmacist being in charge of the pharmacy is in the best interest of the patient," said Howard Anderson, executive director of the pharmacy board.

The law requiring pharmacies to be owned by licensed pharmacists has been on the books since 1963. At the time, legislators worried about a conflict of interest if doctors owned pharmacies, and they wanted to make sure that local pharmacists were making decisions about people's medicine.

Sen. Tony Grindberg, R-Fargo, introduced a bill in 1993 that would have removed the requirement for pharmacist ownership. The bill failed overwhelmingly.

Grindberg said he was a freshman legislator, introducing a bill for a Wisconsin chain store that wanted to open a strip mall in his district. He came away with a better understanding of a small town's survival instinct.

"No one wants to take away from that, but the state has to move forward, too," Grindberg said.

Rep. Dan Ruby, R-Minot, said the drug industry has changed so much in recent years that the law deserves another look. Residents go to Canada to buy drugs, and benefit managers negotiate with drug manufacturers for discounts, he said.

"In one way, we are saying it's OK to go get them from Canada. Then we keep the competition closed up here in the state to protect the local ownership of the pharmacy. It seems like one is working against the other. Rather than do that, it seems to me it would make more sense to change the law to allow larger companies to compete for the market," Ruby said.

Jim Manning, an independent pharmacist who owns MarketPlace Pharmacy in Minot, believes the repeal of the law will be moot by the time lawmakers finally address it. He said many local pharmacies will shut down because of a poor reimbursement rate from Medicare that fails to cover a pharmacist's cost, and a 50 percent cut in reimbursements from Blue Cross Blue Shield of North Dakota, the state's largest insurer.

"The two of them are going to do together what this pharmacy ownership law was designed to prevent," Manning said.

Sen. John Warner, D-Ryder, said he supports keeping the protection for rural pharmacies.

"By and large, it's kept pharmacies available," he said. "Rural pharmacies are kind of the cornerstone of the community. They do a lot besides what they do for drugs. They are important people in the community in providing health care."

When legislators passed the 1963 law, they grandfathered in existing pharmacies not owned by pharmacists.

Six pharmacies continue to operate under the grandfather clause, according to the North Dakota Board of Pharmacy. Among them are Osco Drug, now owned by CVS, and Minot's Trinity Health, which acquired other pharmacies in the city.

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