Institutional Policy-Making in (In) Action: The Case of Pharmacy Ownership in North Dakota

Abstract

In 1963, the North Dakota Legislature amended the North Dakota Century Code to ensure that all licensed community pharmacies in the State are majority owned by pharmacists registered in the State. During the 2008-2009 legislative session, a debate arose about whether this law should be repealed. Those in favor of repeal attacked the law using the neoclassical arguments of efficiency, competition and lower prices. Those opposed to the law's repeal argued that pharmacists must own pharmacies in order to protect the public's welfare. This paper explores the arguments made for and against this law and draws two major conclusions. First, the arguments made by both sides are flawed because neither side fully incorporates the historical, physical and cultural characteristics of North Dakota communities into their analyses. Second, North Dakota legislators voted overwhelmingly to retain the law. Moreover, prima fascia evidence indicates that the legislators based their decisions on Institutional considerations.

Keywords:

• community pharmacy
• pharmacist ownership
• public policy