Big pharmacies knock on door of oil-rich North Dakota

BISMARCK N.D. (Reuters) - North Dakota’s oil boom has fueled a construction bonanza for new supermarkets, restaurants and clothing stores. But try finding a Rite Aid, Walgreens or other national pharmacy chain in the state, the fastest-growing economy in the nation, and you’ll be largely out of luck.

A worker stocks a new Walgreens store in Chicago, Illinois in this January 9, 2012 file photo. North Dakota's oil boom has fueled a construction bonanza for new supermarkets, restaurants and clothing stores. REUTERS/John Gress/Files

That could all change with a controversial Nov. 4 ballot initiative in which voters will get to decide for the first time whether to abolish a 1963 state law designed to protect small businesses. The law requires North Dakota pharmacies to be owned by local pharmacists or run by hospitals with a local pharmacist on staff.

Supporters of the initiative argue it will remove an embarrassing anachronism, give consumers more choice and lower prescription drug costs.

Opponents say that allowing national chains would destroy North Dakota’s tradition of personalized pharmacy care and be yet another example of how the state’s neighborly way of life is changing too fast. Canada, Germany, France and many other countries, they also note, have similar laws requiring local pharmacy ownership.

“Independent pharmacies are more apt to focus on customer service,” said Gabe Gretz, who bought Service Drug Pharmacy in Williston last year with his father. “This is our bread and butter. It’s not just a hobby for us.”

“North Dakota Nice” is a truism here, not an irony, and most retail stores are still prohibited from opening before noon on Sunday - a throwback to laws designed to encourage family time.

Yet since the oil boom began around 2010, drawing thousands of new residents to jobs where roughnecks can earn more than $100,000 a year, drug use, assault and other violent crimes have jumped.

Recent sex-trafficking charges brought against an oil field worker in Williston, a once quiet town that is now the epicenter of the boom, marked the first charges of that type ever filed in the area and has escalated tension between new and old residents.


Many newly arrived oil workers, and even some locals, say they hope the ballot measure passes so that they can use the same chains they’ve grown accustomed to elsewhere.

Rite Aid Corp has no outpost in the state, North Dakota’s Walmarts have no in-store pharmacies and the state’s lone Walgreens, on the Minnesota border, is prohibited from selling prescription drugs.

CVS is able to operate only a handful of pharmacies in North Dakota thanks to a 2006 buyout of several Osco Drug stores that operated before the 1963 law.

“Honestly, it’s not convenient getting my prescriptions here,” said Jan Anseth, a resident of Williston who spends winters in Arizona where she gets her medications from a national chain. In North Dakota, Anseth says, she runs into problems transferring prescriptions and getting anything more than a 30-day supply.

The ballot’s primary sponsor, North Dakotans For Lower Pharmacy Prices, was funded with $168,000 in contributions from Walmart, Walgreens, Kmart and others.

In campaign materials, the group cites data the Kaiser Family Foundation compiled in 2009 showing North Dakota has one of the highest per capita costs for prescription drug and medical devices in the country.

Walmart says North Dakotans are missing out on its popular $4 prescription program, which makes many generic drugs available at the sharply discounted price.

Crying foul, the state’s independent pharmacists say they’re able to often meet or beat prices from national chains, most of whom lose money on pharmacy sales as a way to get customers in the door.

A random survey by Reuters of North Dakota’s independent pharmacies showed that a 30-day supply of the generic blood thinning drug clopidogrel ranged in price between $10 and $59.95. A CVS in Bismarck, the state capital, quoted a price of $149.95 for the same dosage.

“I get to set the prices here at my pharmacy,” said Jenna Wahlstrom, a pharmacist at Larsen Service Drug, which her grandfather founded in Watford City in 1952. “It’s not a corporate decision.”

Like the big chains, Wahlstrom offers her customers a smartphone app and online refill ordering. Her pharmacy has transferred hundreds of prescriptions from retail chains for workers who have moved to the state, she said.

Ahead of the vote, the state’s top politicians are declining to take sides.

Governor Jack Dalrymple, a Republican who took office in 2010, says he shops at locally owned Aerohead Plaza Drug while in Bismarck and believes it has been able to compete effectively with the nearby CVS.

Yet in the 1990s, as a state legislator, Dalrymple voted to keep the pharmacy law intact.

“I don’t know,” he now says, “if that was the right vote.”

Reporting by Ernest Scheyder; Editing by Terry Wade, Jill Serjeant and Eric Beech