North Dakota Pharmacy Ownership Initiative (2014)

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Pharmacy Ownership Initiative
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Type:State statute
Referred by:Citizens
Topic:Business regulation
Status:On the ballot

The North Dakota Pharmacy Ownership Initiative is on the November 4, 2014 ballot in North Dakota as an initiated state statute. The measure, upon voter approval, would remove the requirement that majority ownership in pharmacies in the state be held by registered pharmacists.[1][2]

The measure would change the North Dakota Century Code 43-15-35(e), which was instituted in 1963.[3] The law effectively bans chain retailers, such as Walmart, Target and Walgreens, from operating pharmacies in North Dakota.[4]

The ballot initiative was first proposed in 2009, but a judge rejected the sponsoring group’s signatures due to the absence of the names and addresses of sponsoring committee members alongside the signature petitions.[2] In 2011, the initiative was proposed for a second time. The second attempt was filed by Duane Sand (R), but did not make the ballot.[5] Earlier in 2011, state legislators proposed to amend the state's pharmacy ownership laws.[6] However, the North Dakota House defeated the measure by over 70 percent.[7]

Background

2014 measures
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June 10
Measure 1Approveda
November 4
Measure 1
Measure 2
Measure 3
Measure 4
Parental Rights Initiative
Pharmacy Ownership Initiative
Endorsements

Century Code 43-15-35(e)

The North Dakota Century Code 43-15-35(e) was passed in 1963. The law reads:[3]

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.[8]

The requirement of majority stock ownership means that over 50 percent of the ownership of every pharmacy in the state must be owned by a licensed pharmacist or pharmacists.[9]

The code includes four exceptions to the requirement:[9]

  1. Persons who were granted a permit to operate a pharmacy in North Dakota on or before July 1, 1963. CVS Caremark Corporation, for example, is exempted due to this "grandfather clause."
  2. Hospitals furnishing pharmaceutical services to patients in the hospital may be granted a pharmacy permit.
  3. Hospitals may seek a pharmacy permit to operate a retail pharmacy in situations where that pharmacy “is the sole provider of pharmacy services in the community and is a retail pharmacy that was in existence before the hospital took over operations."
  4. Owners of accredited postgraduate medical residency training programs may obtain a permit when their "pharmacy is collocated with and is run in direct conjunction with the postgraduate medical residency training program."

North Dakota is not the only state with a law requiring pharmacies to be partially owned by licensed pharmacists. In Michigan, 25 percent of stock ownership must be held by pharmacists. Stefanie Haarsager, an attorney admitted to practice law in North Dakota, noted, "Currently, the practice of pharmacy in the United States is regulated and controlled by the states and is subject to state police powers." Therefore, “[a] state may regulate the practice of pharmacy in the interest of the public health, safety, and welfare."[9]

Opposition

Opponents

  • North Dakota Pharmacists Association

Arguments

  • Steve Boehning, president of the North Dakota Pharmacists Association, argued that repealing the existing law would not increase competition and consumer choice. He continued, "The exact opposite happens. The market becomes dominated by the three large chains [Walmart, Walgreens and CVS]."[4]

Path to the ballot

See also: Laws governing the initiative process in North Dakota

Initiative supporters got their measure placed on the ballot for November 2014.

2010

In 2010, supporters gathered more than sixty valid signatures in excess of the required number. However, proponents filing the signatures failed to circulate petitions listing the sponsoring committee members. Secretary of State Al Jaeger (R) rejected the initiative, saying, "Since the petitions did not include the names and addresses of the sponsors and were not circulated in their entirety, I have no choice but to stand by my earlier determination that the submitted petitions were insufficient."[10] Eric Thompson, a physician chairing the initiative campaign, called the error "a minor compliance issue" and asked for a reversal in decision.[11] Attorney General Wayne Stenehjem (R) commented on the conflict, stating, "Not circulating the petitions in their entirety is more than a mere technicality. The failure to include the names and addresses of the sponsors raises serious questions regarding the integrity of the initiative process."[12] The dispute eventually culminated in Thompson v. Jaeger before the North Dakota Supreme Court.[13] The court ruled that sponsors of initiatives must disclose the names of persons that serve on the campaign's leadership committee by a unanimous vote on September 7, 2010.[14]

2012

In 2011, the initiative was proposed for a second time for November 2012. The second attempt was filed by Duane Sand (R), who was running for the US Senate. The measure did not make the ballot.[5]

2014

On May 22, 2014, the North Dakota Secretary of State received a draft petition for the initiative. The measure was approved for circulation on June 3.[2] The initiative's supporters needed to collect a minimum of 13,452 valid signatures by August 6, 2014.

Supporters started submitting signatures on July 18, 2014. The secretary of state's office said supporters turned in 24,219 signatures, and 22,758 of those were accepted as valid.[15] Proponents collected 10,767 or 44 percent more signatures than were required.

See also

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External links

References

  1. North Dakota Secretary of State, "Pharmacy Petition," accessed July 20, 2014
  2. 2.0 2.1 2.2 The Bismarck Tribune, "Pharmacy petition under review," May 22, 2014
  3. 3.0 3.1 North Dakota Legislature, "North Dakota Century Code Chapter 43-14: Pharmacists," accessed May 23, 2014
  4. 4.0 4.1 Bakken Today, "Pharmacy law again target of proposed ballot measure," June 1, 2014
  5. 5.0 5.1 The Bismarck Tribune, "Foes of ND pharmacy owner rule seek repeal again," July 6, 2011
  6. North Dakota Legislature, "House Bill 1434 Text," accessed May 23, 2014
  7. North Dakota Legislature, "House Bill 1434 Status, accessed May 23, 2014
  8. Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
  9. 9.0 9.1 9.2 Haarsager, S. 2010. “North Dakota’s Pharmacy Ownership Law: An Analysis of the Strictest Pharmacy Ownership Law in the United States.” North Dakota Law Review 86: 335-382
  10. Yahoo News, "Jaeger: ND pharmacy measure won't go on ballot," August 20, 2010
  11. The Jamestown Sun, "Backers of pharmacy measure seek spot on N.D. ballot," August 17, 2010
  12. Grand Forks Herald, "North Dakota AG: Pharmacy measure shouldn't make November ballot," August 27, 2010
  13. The Bismarck Tribune, "Pharmacy measure in ND Supreme Court's hands after arguments," September 1, 2010
  14. North Dakota Supreme Court, "Thompson v. Jaeger," accessed May 23, 2014
  15. Jamestown Sun, "Pharmacy ownership measure approved for Nov. 4 ballot," August 22, 2014