Pro-Market and Pro-Business: A Prescription for Confusion

Ezra Klein at the Washington Post today writes about the differences between “pro-market” and “pro-business” in the healthcare context.  Without delving into the health care issue he raises, I very much appreciate the overarching point:  Pro-business does not necessarily equal pro-market.  In fact, often pro-business is anti-market because businesses (appropriately) want as much of the market as they can get for themselves.  

A similar discussion surrounds the North Dakota Pharmacy Ownership Law (NDCC 43-15-35(e)), which requires pharmacies in the state to be majority owned by a licensed pharmacist.  As such, the mass-market retail chains in the state (like Target and Wal-Mart) do not have pharmacies.  This law has been criticized by large retailers and others as anti-market and anti-consumer, but certainly it is “pro-business” for current pharmacy owners in the state. 

As Klein notes in his piece, pro-business forces often confuse the issue by using pro-market rhetoric, and this is true in the North Dakota pharmacy debate, too.  A press release announcing a study by the Institute for Local Self-Reliance (ILSR) claims that repealing the law could lead to $23 million in lost economic benefits. The release continues, “North Dakota residents not only benefit from ready access to pharmacies, but the state’s average prescription price is well below the national average.” 

Notice how this quote tries to imply the law is pro-market.  First, it states that the law provides more pharmacies to rural areas.  This seems to imply more competition, and certainly provides more access to pharmacies for certain regions.  Next, the quote states that prescription prices are lower in the state than most of the country. This tries to imply causation, but the report never provides any support to indicate anyone actually thinks prices would be higher without the law.   

A more accurate statement would probably be: “The North Dakota pharmacy law provides greater access to a pharmacy in many parts of the state that would not otherwise have access.  Because the average price of prescriptions in the state is lower than the national average, you should be okay with paying more than you need to for prescriptions.” 

And that may be a choice people would like to make – we often balance such decisions in the same way we might choose to pay an extra dime a gallon to buy gasoline from the local service station instead of going to a big company station. But note that the decision under the pharmacy law is not, “Do we prefer to buy local?” Rather, it is,” Do we prefer to ensure the market only offers local options?” 

Note that I’m not criticizing any group for using language that puts their position in the best light, and I am not saying that both sides haven't confused the issues for their benefit.  (They have.)  I’m simply saying we need to read and listen closely to ensure we frame the issues for ourselves. That way, we can know exactly what we are choosing to support –  businesses or markets – and why. 
 
-- Josh Fershee