Scott Syroka is a former Johnston city council member.
Does anyone remember voting for Rosalind Brewer? That’s the Walgreens CEO with the power to decide what kind of health care millions of Americans, including countless Iowans, get to access. The latest battle over reproductive rights shows us how.
Last Friday, the U.S. Supreme Court announced it was hitting pause on an early April decision by Trump-appointed federal judge Matthew J. Kacsmaryk to suspend approval of mifepristone previously granted by the Food and Drug Administration more than two decades ago.
If you’re not familiar yet, mifepristone is a safe and commonly used pill in abortion care. It can also be used to treat medical conditions like uterine fibroids (noncancerous growths in the uterus) as well as Cushing syndrome, a condition caused by prolonged exposure to high cortisol levels.
In the wake of the Supreme Court’s decision, pundits argued this meant that access to mifepristone would continue to be available to all Americans. Steve Vladeck, CNN Supreme Court analyst and professor at the University of Texas School of Law, went as far as to say, “…nothing is going to change with respect to mifepristone access until and unless the court both takes the case on the merits and sides with the challengers.”
But that statement is not true. Access to mifepristone was already restricted for millions of Americans prior to Judge Kacsmaryk’s decision, so the Supreme Court’s stay on his ruling only prolongs a status quo of continued restrictions for too many. Corporate monopolies like Walgreens are the reason why.
MONOPOLIES FUNCTION AS PRIVATE GOVERNMENTS
In January, the Food and Drug Administration updated its rules to make mifepristone available in more pharmacies, including chains like Walgreens, if they completed a certification process. That same month, Walgreens became the first major retail pharmacy to announce it would seek certification to dispense mifepristone, including by mail.
Republican state attorneys general (including Iowa’s Brenna Bird) fired back in February with a letter threatening legal action if Walgreens proceeded to dispense mifepristone, because they didn’t agree with a previously issued legal opinion from the Department of Justice that clarified pharmacies like Walgreens could indeed mail prescription drugs like mifepristone to Americans.
Now, that should give you pause. The representatives we actually elected didn’t pass any new law requiring Walgreens to stop selling mifepristone in all these states. Walgreens didn’t give citizens advance notice of its decision, nor did it give an opportunity to weigh in with public comments. And Walgreens wasn’t subject to traditional measures of public transparency and accountability, like open meetings and public records laws, that would help shed light on how executives came to their decision.
In making its decision to restrict mifepristone access, Walgreens used its monopoly power to function as a private government, but without corresponding public constraints.
At this point, Walgreens might argue it faced an ambiguous legal landscape and that it was simply making a business decision as to how much risk it would tolerate. Fair enough. While that may be true, it ignores the underlying issue at hand.
Walgreens’ massive market size meant that its decision on how to respond to conflicting opinions ended up restricting health care access for countless Americans who had no true freedom to remedy it. And no, Americans really did not have the freedom to just easily change pharmacies if they didn’t like Walgreens’ decision. Here’s why.
If you visit the Freedom Tower in Lower Manhattan you’ll see a skyscraper standing 104 floors tall.
Now, imagine those 104 floors represent the total market for retail prescription drug sales, and that each floor houses a pharmacy controlling that portion of the market.
Ninety-seven of those 104 floors house a pharmacy controlled by a chain, supermarket, mass retailer, or mail-order pharmacy run by corporate monopolies.
While you always used to fill your prescriptions at one of the Walgreens floors, you decided to bail and take your business to a different pharmacy’s floor after their decision on mifepristone.
You sought out an independent pharmacy, because Walgreens itself admitted in its April 6 statement that, “No major retail pharmacy has said that they will operate differently” in regards to dispensing mifepristone.
By choosing to look for an independent pharmacy, you had to restrict your search to just six floors out of 104. Out of those six—and depending on where you live it could have been even less than that—you had to hope at least one of them decided to seek certification to dispense mifepristone.
Let’s say you lucked out though. You not only lived in an area with independent pharmacies to choose from, but at least one of them decided to dispense mifepristone once certified. Success! You now could switch pharmacies.
Not so fast. First, you needed to check if you could afford the higher co-pays you’d be responsible for, since your new independent pharmacy couldn’t afford to make the same deals for network access that chain pharmacies like Walgreens could.
You weren’t happy about it, but you were able and willing to pay some more because you needed your medication. You called your insurance company to find out how much higher the co-pays would be, but instead you found out you wouldn’t even get the chance.
The independent pharmacy you wanted to use was subject to an out-of-network ban by your provider, meaning you’d have to pay full cost for your prescriptions if you switched.
So much for having the freedom to take your business and bail on Walgreens. Just as we’re living in an era of too-big-to-fail banks, we’re also living in an era of too-big-to-bail pharmacies.
After Walgreens announced its mifepristone decision, some recognized it’s a problem for a corporation to have this much unilateral power. But they responded with misguided remedies.
In certain cases, politicians pleaded directly with Walgreens executives to reverse their decision, as if we were living under the rule of a monarchical royal court, rather than a self-governing democracy.
Yet just this past month, Kaiser Health News reported that California was walking back its earlier threats. As for individuals boycotting Walgreens, how were Americans supposed to do that exactly if they had no true alternatives?
It’s inevitable that Walgreens and other corporations will use their monopoly power to make further health care decisions for millions as they navigate the ever-changing legal landscape on mifepristone. That reality illustrates why policymakers should pass new anti-monopoly laws and enforce the ones that already exist.
While it may be too late now to make much of a difference as it pertains to immediate uncertainty, doing so will help ensure the power to make these decisions is decentralized on similar issues in the future. We know it’s possible because we’ve been here before.
RURAL AMERICA’S ANTI-CHAIN-STORE TRADITION
In the twentieth century, Americans viewed chain stores as a Wall Street assault on Main Street, as noted by Paul Ingram and Hayagreeva Rao in their journal article, “Store Wars: The Enactment and Repeal of Anti-Chain-Store Legislation in America.” Rural America led the country in opposing chain stores like A&P—similar in its time to chains like Walgreens today.
For rural America, opposing chain stores was common sense, because those businesses took dollars out of local communities and sent them to out-of-state, absentee owners. Farmers especially worried about consolidated purchasing power wielded by larger and larger chains, and the threat it posed to their livelihood.
At the federal level, U.S. Senator Smith Brookhart of Iowa called for the Federal Trade Commission to investigate chain stores due to concerns about their unchecked growth in 1928.
At the state level, it was places like Iowa that led the charge in taking on chain stores. In 1936, The New York Times mentioned residents’ fights against chain stores more than any other state besides California, which also featured an agricultural industry dominated by independent farms at the time.
By 1939, more than half of all states had passed laws targeting the monopolistic behavior of chain stores. These included laws discouraging consolidation, like those passed in Indiana and North Carolina, by imposing progressively higher taxes on chains the more stores they owned.
States like North Dakota innovated with other anti-monopoly laws. They reined in the power of chains by only allowing them to operate drugstores if they were owned by pharmacists, in effect banning chains from opening pharmacies there.
As David Dayen noted in his reporting for The American Prospect, “Not surprisingly, North Dakota’s independents deliver among the lowest prescription drug prices in the country, along with better health outcomes and more drugstores per capita than any other state.” In fact, residents of states with anti-monopoly policies like North Dakota’s pharmacy ownership law continue to benefit in ways policymakers couldn’t even have foreseen at the time.
When the federal government first started distributing COVID-19 vaccines, Stacy Mitchell with the Institute for Local Self-Reliance noted it was states like North Dakota who were able to distribute their doses fastest, thanks to partnering with independent pharmacies. Indeed, your ability to get a potentially life-saving vaccine as quickly as possible hinged on whether corporate monopolies dominated your state’s pharmacy market or not.
A REAL PATH FORWARD
If we’re serious about constraining the power of corporate monopolies like Walgreens to make vital decisions on issues like health care access for Americans, then we need to focus on anti-monopoly policy so small businesses like independent pharmacies can thrive, and citizens can have real choices again.
As former Representative Wright Patman of Texas argued in 1951, “Small business is our strongest bulwark against the undue concentration of economic power. … In serving its own interest, small business also serves as a social and political stabilizer, its very numbers acting as a safeguard against concentration of power.” How far we’ve strayed since then.
Our current status quo is neither “just the way things are”, nor some inevitable act of divine nature. Rather, it’s the outcome of policy choices we’ve made and the consequent action (or lack of action) we’ve taken as a result.
Just as we’ve structured society in recent decades to permit these corporate monopolies to centralize power, so too can we structure society to break that power using anti-monopoly policies.
By doing so, no sole business decision in the future will be able to restrict health care options for millions without the individual freedom to remedy that decision ever again.