Pharmacy regulations will make NC’s healthcare problem worse

North Carolinians are struggling with high healthcare costs. The Tar Heel State was recently named the worst state for healthcare costs and ranks 38th in the nationfor healthcare affordability. A July Catawba College/YouGov survey reported that 59% of North Carolinians find healthcare and insurance to be “unaffordable.”

Families are paying too much for healthcare and prescriptions, with many facing massive medical debt as a result. 

Unfortunately, some lawmakers are discussing more rules that will only increase those costs and reduce access to affordable care in the state.

Arkansas and Tennessee recently passed laws that force pharmacies to divest from owning affiliated companies. North Carolina lawmakers would be wise not to follow their lead. Before these politicians act, they should consider the unintended consequences when free-market competition is replaced with government mandates favoring some companies over others.

Breaking apart private businesses won’t solve North Carolinians’ healthcare problems. In fact, it will create new problems that will make North Carolinians worse off.

Markets are more competitive when consumers have choices and when new businesses can enter those markets and compete on price, service, and innovation. Allowing government — not consumers — to dictate how private businesses operate abandons that successful formula by putting legislators in charge of micromanaging private enterprise and replacing consumer demand with their own political preferences and favored business models. This results in reduced access, which in turn reduces competition and typically leads to higher prices.

The solution to rising healthcare costs is more competition, not government intervention.

Many Americans understandably think the solution for market consolidation is for government to break companies apart. But a company’s size doesn’t matter — the real issue is consumer outcomes. Large companies aren’t automatically good, but they aren’t automatically bad, either. The better question is: are consumers benefiting? If vertically integrated companies provide lower prices, greater convenience, broader access, and improved efficiency, government should proceed carefully before outlawing them. Competition should determine which business models succeed — not politicians. Markets naturally reward those competitors providing value to consumers, government interference serves to disrupt that vital market function.

Forced pharmacy divestment isn’t a matter of promoting competition — it’s a matter of government picking winners and losers. It’s a matter of lawmakers prohibiting successful companies from operating simply because they dislike their business models. Imagine applying the same logic elsewhere: forcing grocery stores to sell off their pharmacies, requiring manufacturers to divest their distribution networks, or preventing technology companies from integrating complementary services. 

Government shouldn’t decide how companies organize themselves.

Government’s proper role should be restricted to protecting property rights, preserving economic freedom, enforcing fair rules, and punishing misconduct. Government should not redesign private markets, dictate corporate structures, or substitute entrepreneurial judgment with political preferences — and those same principles should be applied to healthcare.

For several years running, North Carolina has been one of the fastest-growing states in the country. That’s in no small part because the state has become a top place for businessthanks to a commitment to reducing taxation and regulatory controls on entrepreneurs and job creators. 

Policymakers should continue embracing those values and reject any policies or government mandates that hinder innovation and reduce consumer choice. North Carolinians deserve healthcare that’s accessible and affordable, and we can make that happen by preserving the competitive, entrepreneurial marketplace that has helped make North Carolina the economic leader it is today.

Brian Balfour is the John Locke Foundation's senior vice president of research.