OUR OPINION: Ease rules on owning pharmaciesIn modern America, where the benefits of competition are so obvious and the drawbacks of monopoly power are so clear, protectionist policies have become harder and harder to justify.
By: Tom Dennis for the Herald, Grand Forks Herald
When it comes to earning a living, North Dakota pharmacists already have a big advantage: Their license, which gives them the legal monopoly to practice their profession.
They share that advantage with pharmacists in all 50 states.
But now it’s time for the Legislature to remove the additional protection that North Dakota pharmacists and only North Dakota pharmacists enjoy: The protection against tough competition from discount stores.
The North Dakota House soon will consider House Bill 1434, which deletes the requirement that pharmacies must be majority-owned by North Dakota-licensed pharmacists.
In effect, the law means few shoppers in North Dakota Wal-Mart and Target stores find pharmacies there, nor are chain pharmacies as common in North Dakota as in other states.
Who benefits from this law? The question answers itself. If consumers truly benefitted, they’d freely choose the pharmacies majority-owned by North Dakota pharmacists.
But the law is designed to pressure consumers to use those pharmacies in order to discourage customers from going elsewhere. Not only does this rob consumers of a basic freedom of choice, but also it insulates the state’s pharmacies from the bracing effect of competition.
And competition, as North Dakota lawmakers know, is the fundamental force that drives businesses around the world to improve.
That’s why in modern America, where the benefits of competition are so obvious and the drawbacks of monopoly power are so clear, protectionist policies have become harder and harder to justify.
So, those policies have been dropped in state after state. Today, grocers, hardware store owners, gas station owners — and, in the other 49 states, pharmacists — have coped with this competition, resulting in better customer service and greater satisfaction across the board.
North Dakotans who need prescription drugs deserve those same clear benefits from improved customer choice.
The gas-station example fits especially well. In 2005, the North Dakota Petroleum Marketers Association sought a state law that would have barred discount stores from selling gasoline below cost. The bill was an effort to protect corner gas stations and convenience stores from competition.
But the bill failed in the North Dakota House. In other words (and as mentioned before in this space), state lawmakers weren’t willing to insulate convenience stores in that way, even though those stores are vital community institutions in North Dakota’s small towns.
Discount stores themselves aren’t immune from these forces. Amazon.com and other e-retailers now are huge competitors. But the “big box” stores must respond by improving their business models, not lobbying for an e-commerce ban. And North Dakota pharmacists likely would agree.
America is better off when its businesses attract customers via persuasion rather than protectionism. The House should pass HB1434 and let consumer choice drive the evolution of pharmacies.
— Tom Dennis for the Herald