By Jay Novak
CHESAPEAKE BEACH, Md. -- I'd like to respond to Paul Cline ("N.D. pharmacies can and should compete," Page A4, Feb. 17).
Cline's support for HB1434 seems very passionate, and I commend him for making his viewpoint heard. Unfortunately, most of his statements seem to show very little understanding of this complex issue.
Cline stated that North Dakota pharmacies are protected from competition. This is inaccurate. A more accurate statement would be that North Dakota is protected from pharmacies that are not majority-owned by a pharmacist. This means that, with very few exceptions, the ultimate operating decisions of a North Dakota pharmacy are made by a pharmacist. That's a pharmacist, not a non-pharmacist MBA and not a shareholder in XYZ Corp. demanding more revenue per share.
In most cases, the pharmacist is someone who lives and works in the very community where the pharmacy is located. I am puzzled why some people see this as a bad thing.
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Contrary to Cline's claim, the North Dakota pharmacy market is one of the MOST competitive in the country. That's because so many pharmacies are owned and operated by different individuals. The very law Cline wants changed already creates what he says he desires.
My wife is an Air Force critical care flight nurse, and we own a home in Grand Forks. I have worked in pharmacies in five different states as a pharmacy technician, and I have been a customer in pharmacies all over the world.
The incredible difference in North Dakota pharmacies is so apparent to me that it's often hard for me to realize that others are not able to see it. And I sincerely believe the excellence I see in North Dakota is because of the current ownership law.
As far as protectionism is concerned, the only thing the law is protecting is great service, good prices, North Dakota jobs and revenue and a uniqueness that shines above all other states.
Cline's statements show that he has reduced pharmacy and health care in general to a commodity. He wants to treat it like picking up bolts at Menards or Lowe's. This is a common thought, but something that I think is at the root of many of the problems we seem to debate again and again on the national stage.
My wife and I both believe health care is a service and cannot be reduced to simple supply and demand. Do you want any service at any price or the best service at the best price? There is a difference.
Simple economic models do not work on pharmacies and health care in general, thanks in part to the third-party-payer model. Currently, 90 percent of all pharmacy customers use insurance, and it is the pharmacy benefits manager or PBM who ultimately sets the cost of the drug for both the consumer AND the insurance company.
This is why Cline's statement about co-pays makes no sense. It is also the PBM, not Medicare, who dictates the use of mail-order.
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Studies have shown that mail order's biggest benefit is as a profit center for PBMs. In most cases, the insurance company that contracted with the PBM gets charged the same cost whether mail order is used or a local pharmacy is used.
The standard economic model also cannot account for the fact that some chains are connected with PBMs. This means that an independent pharmacy's prices and customers (as beneficiaries) could actually be controlled by the pharmacy's competitor. Free market? Hardly.
Please support HB1386, which will hopefully help with some of the abuses already seen in the health care market in this regard. And just to set readers' minds at ease, independent studies have shown that overall drug prices are much lower in North Dakota, which is in no small part due to the current structure of pharmacies in the state.
Novak is a certified pharmacy technician and has worked in several pharmacies, including two in Grand Forks.
