A dog owner walks out of a veterinary clinic with a prescription in hand, drives to her neighborhood pharmacy to get her sick terrier’s order filled and leaves with a few generic and brand-name animal drugs.
Such a scenario is uncommon today, but the Federal Trade Commission, in a report issued this week, found that the pet medications market could be more competitive—and better for consumers—if portable prescriptions were the norm, human pharmacies had greater access to veterinary drugs and more generics were available.
The FTC staff report, titled “Competition in the Pet Medications Market,” was the culmination of a three-year review that included industry and public input gathered at a 2012 workshop and from more than 700 written comments.
The FTC acknowledged that the U.S. pet pharmaceutical market—forecast to hit $10.2 billion in sales by 2018—is in flux and has changed dramatically from the days when veterinarians dispensed virtually all prescription drugs.
According to the latest estimates, practitioners sell 58 percent of prescription and over-the-counter medications, brick-and-mortar pharmacies and retailers rake in 28 percent, and the growing Internet and mail-order segment accounts for 13 percent.
The American Veterinary Medical Association conceded that there is no going back.
“The report says what many of us have known for a while: that the pet medications industry is evolving,” said AVMA spokeswoman Victoria Broehm. “As consumers are presented with more choices of where to fill their pets’ medications, we, as veterinarians, hope that the health and welfare of our animal patients is central to that decision.”
A large portion of the FTC report focused on prescription portability—the right of clients in many states to leave a veterinary office with a prescription and have it filled at the pharmacy of their choice. One piece of federal legislation, the Fairness to Pet Owners Act, would mandate that veterinarians nationwide issue a prescription regardless of whether a client requested one.
AVMA believes that such a requirement would be burdensome and unnecessary.
“The AVMA’s Principles of Veterinary Medical Ethics and its guide on ‘Client Requests for Prescriptions’ already encourage veterinarians to write prescriptions when asked by a client,” Broehm said, “and due to the impressive advocacy work by many state veterinary medical associations, 35 states now have similar laws or policies.”
Encouragement and state guidelines may not go far enough, the FTC said.
“Some veterinarians refuse to provide prescriptions to clients when requested,” the report stated. “Furthermore, some veterinarians may try to actively discourage clients from filling prescriptions elsewhere by providing misleading information about non-veterinary retailers, requiring waivers of liability that exaggerate the dangers of purchasing from non-veterinary retailers or requiring extra fees for portable prescriptions.”
The report did not describe all veterinarians that way, noting that over one 12-month period the American Veterinary Distributors Association counted “4 million prescriptions to pet owners to be filled outside of the veterinarian’s office.”
Mandatory prescription writing may be better, the FTC stated, because of what the agency called client reluctance to ask for a prescription “for fear of offending their veterinarian.”
Some veterinarians told the FTC they questioned the ability of human pharmacies to accurately fill veterinary prescriptions and consult with pet owners.
“Many of these concerns relate to pharmacists’ training and knowledge,” the agency stated.
“Some pharmacists themselves acknowledge discomfort in dispensing pet medications when they do not have a strong working knowledge of veterinary pharmacology.”
The FTC added that “pharmacists may be more inclined to secure additional training” as they see greater demand for veterinary drugs.
Besides prescription portability, the staff report looked at how pet medications are distributed, how exclusive agreements keep some drugs out of the retail market and how current practices may limit the development of generic pharmaceuticals.
“Nearly all major manufacturers of pet medications appear to maintain formal policies that restrict sales … to veterinarians and veterinary distributors,” the report stated. “Some stakeholders report that despite these stated policies, large retail pharmacies and stores have been able to purchase pet medications directly from the manufacturers, although no manufacturers have confirmed that they engage in this practice.”
Many pharmacies still have a difficult time obtaining pet medications “directly from manufacturers or their authorized distributors,” the report found. Drugs they do stock often come by way of secondary suppliers who buy excess inventory from veterinarians themselves.
“It remains unclear how many veterinarians are involved in the diversion of pet medications, but it is thought to be substantial,” the report pointed out.
Leakage in the market may benefit pet owners, the FTC noted.
“The existence of this secondary distribution system likely results in lower prices than would otherwise prevail if exclusive distribution were being strictly enforced,” the report stated.
The agency discredited assertions that medications in nontraditional channels could be counterfeit or unsafe, saying no such evidence was presented.
The FTC report found a scarcity of generic animal drugs compared to the wide selection that permeates human medicine.
One of several reasons cited is that health insurance companies on the human side often require the dispensing of less expensive generic drugs when available. A relatively small number of pets, on the other hand, are insured in the United States.
The report noted that veterinarians sometimes prescribe generics out of concern for the ability of pet owners to “afford high-priced branded drugs.” However, some veterinarians may be reluctant to push generics because of a fear of hurting profits or opening the door to retail competitors.
“If a significant number of veterinarians view generics as less profitable, manufacturers may perceive lower potential demand, which could discourage further development of generic products,” the FTC staff noted.