North Dakota Pharmacy Ownership Initiative, Measure 7 (2014)

Measure 7
Type	State statute
Origin	Citizens
Topic	Business regulation
Status	Defeated d

2014 measures
June 10
Measure 1a
November 4
Measure 1 d
Measure 2 a
Measure 3 d
Measure 4 d
Measure 5 d
Measure 6 d
Measure 7 d
Measure 8 d
Endorsements
Expenditures

The North Dakota Pharmacy Ownership Initiative, Measure 7 was on the November 4, 2014 ballot in North Dakota as an initiated state statute, where it was defeated. The measure, upon voter approval, would have removed the requirement that majority ownership in pharmacies in the state be held by registered pharmacists.

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

Supporters called the measure the Lower Pharmacy Prices Initiative.

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. 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. Earlier in 2011, state legislators proposed to amend the state's pharmacy ownership laws. However, the North Dakota House defeated the measure by over 70 percent.

Election results

North Dakota Measure 7
Result		Votes	Percentage
d No		147,644	58.97%
Yes		102,731	41.03%

Election results via: North Dakota Secretary of State Office

Text of measure

Ballot title

The official ballot text was as follows:

“

Initiated Statutory Measure No. 7 This initiated measure would amend section 43-15-35 of the North Dakota Century Code. It would repeal the requirement that an applicant for a permit to operate a pharmacy must be a licensed pharmacist, a business entity controlled by licensed pharmacists, a hospital pharmacy, or a postgraduate medical residency program. YES - means you approve the measure summarized above. NO - means you reject the measure summarized above.

”

Background

Century Code 43-15-35(e)

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

“

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.

”

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.

The code includes four exceptions to the requirement:

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."

Canada, Germany and France have similar laws requiring local pharmacy ownership.

Support

The campaign in support of the initiative is being led by North Dakotans for Lower Pharmacy Prices.

Supporters call the measure the Lower Pharmacy Prices Initiative.

Supporters

Organizations

• North Dakota Libertarian Party

Businesses

• Walmart
• Walgreens
• Kmart

Arguments

North Dakotans for Lower Pharmacy Prices made the following seven arguments on their website:

“	Health care costs across the nation are rising dramatically, and as proven by a recent Kaiser Family Foundation study, the average North Dakotan pays hundreds of dollars more per year for prescription drugs than people in South Dakota, Minnesota and Montana. Changing the state’s current law will help address these price discrepancies. Prescription drug costs are too high in North Dakota. A YES vote on measure 7 will allow retailers like Target, Walgreens, Walmart the ability to operate pharmacies with licensed Pharmacists which will help bring down the price of prescription drugs for everyone. This is especially important for seniors and disabled individuals who may be living on a fixed income and trying to manage the rising costs of housing and food, not to mention their medications. Many North Dakotans do not have access to a pharmacy close to where they live and work, so Measure 7 will provide them more convenient options to take care of their pharmaceutical needs. Patient care and access to prescription drugs will be greatly improved by Measure 7 as it will allow health care providers such as hospitals and clinics the ability to operate pharmacies for out-patient treatment. Every other state in the nation has an open, competitive market allowing corporations to operate pharmacies staffed with licensed pharmacists. North Dakota is the only state that limits consumer options by prohibiting retailers and grocers from operating pharmacies. While many North Dakotans will continue to shop at the same pharmacies that they have relied on for years, Measure 7 will help our state meet the growing pharmacy needs due to the demands of our growing population. Hard working North Dakota families should have the convenience of one-stop shopping.	”
—North Dakotans for Lower Pharmacy Prices

Campaign contributions

Total campaign cash as of December 3, 2014
Support:	$2,097,617
Opposition:	$0

Supporters had received $2,097,617 in contributions as of December 3, 2014. Wal-Mart Stores was the sole contributor to the campaign at that time.

PAC info:

PAC	Amount raised	Amount spent
North Dakotans for Lower Pharmacy Prices	$2,097,617	$759,049
Total	$2,097,617	$759,049

Top contributors:

Donor	Amount
Wal-Mart Stores	$2,097,617

Opposition

Reuters conducted a random survey of the state’s independent pharmacies and compared their prices to a CVS in Bismarck, North Dakota. A 30-day supply of a generic blood thinner ranged in price between $10 and $59.95 at independent pharmacies. The same drug and dosage cost $149.95 at the CVS.

Opponents

• North Dakota Pharmacists Association

Arguments

A North Dakotans for Prescription Facts ad titled, "Don't Be Fooled! Vote NO on Measure 7."

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]." He also declared:

“	Look at the facts and realize we have the best pharmacy business model across the country by far. Today in my opinion the law is even more important because of the fact that we have insurance companies owning pharmacies. CVS up the road from me is owned by Caremark which is the largest pharmacy insurance company in the county. They can, in turn, force consumers to use their drug stores. So the law prevents that conflict of interest. Your choice does not become restricted so you have to go to the pharmacy the insurance company owns.	”
—Steve Boehning

Other arguments in opposition to the initiative included:

• Jenna Wahlstrom, a pharmacist at Larsen Service Drug, said, “I get to set the prices here at my pharmacy. It's not a corporate decision.”

Polls

See also: Polls, 2014 ballot measures

North Dakota Measure 7 (2014)
Poll	Support	Oppose	Undecided	Margin of error	Sample size
UND College of Business and Public Administration 9/26/2014 - 10/03/2014	35.4%	38.8%	25.9%	+/-5.0	505
Note: The polls above may not reflect all polls that have been conducted in this race. Those displayed are a random sampling chosen by Ballotpedia staff. If you would like to nominate another poll for inclusion in the table, send an email to editor@ballotpedia.org.

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." Eric Thompson, a physician chairing the initiative campaign, called the error "a minor compliance issue" and asked for a reversal in decision. 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." The dispute eventually culminated in Thompson v. Jaeger before the North Dakota Supreme Court. 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.

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.

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. 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. Proponents collected 10,767 or 44 percent more signatures than were required.

See also

Suggest a link

• North Dakota 2014 ballot measures
• 2014 ballot measures
• Laws governing the initiative process in North Dakota

External links

Basic information

• Initiative Petition

Support

• North Dakotans for Lower Pharmacy Prices

Additional reading

• Reuters, "Big pharmacies knock on door of oil-rich North Dakota," September 4, 2014