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Report Predicts Continued Growth in Pet Drug Sales

U.S. medication purchases are expected to rise from $7 billion this year to nearly $9 billion by 2019.

Veterinarians sell an estimated 59 percent of all pet medications.

Isabelle Francais/I-5 Studio

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U.S. sales of pet medications are forecast to reach $7.02 billion this year, a 6.9 percent jump from 2014, according to the market research firm Packaged Facts.

The newly released report “Pet Medications in the U.S., 4th Edition” calculated that sales of prescription and over-the-counter drugs by veterinary hospitals and Internet and brick-and-mortar retailers should rise to nearly $9 billion by 2019. Excluded are sales of nutritional supplements as well as drugs for horses and food animals.

The report’s author, George Puro, predicted that veterinarians will end this year with a 59 percent share of the pet medications market, up 1 percentage point from 2014.

The third edition of the report, released in early 2014, projected $8 billion in sales this year, but the total was slashed because of what Puro termed a “somewhat more conservative sizing of the market.”

“As we’ve done with our ‘Pet Market Outlook’ and several other Packaged Facts products in the last couple of years, we’ve revised our methodology based on additional information and resources we have about the market,” Puro explained.

The new report projects that the $8 billion mark won’t be surpassed until 2018. Sales in 2019 should hit $8.87 billion.

Puro linked strong sales growth in 2014 and 2015—under the recalculated numbers—to “several blockbuster product introductions.” The new drugs include Apoquel, an anti-itch medication that Zoetis Inc. has been unable to produce in large amounts; NexGard, a flea and tick killer from Merial Ltd.; and Bravecto, a flea and tick preventive from Merck Animal Health.

Total U.S. drug sales would be even higher, Puro wrote, except that Frontline Plus, a popular flea and tick spot-on from Merial, has faced “intense competition” from competing products sold through retail channels, “where margins are lower.”

Among other highlights in the report:

  • Large chain retailers such as Walgreens, Walmart and Target have captured an 18 percent market share for over-the-counter and prescription pet medications. Overall, traditional retailers, including pet stores, hold a 31 percent share, and the Internet segment makes up 10 percent.
  • Zoetis remains the world’s largest animal health company, with global revenue of $4.79 billion in 2014. Next in line, in order, are Merck, Merial and Elanco Animal Health.
  • The leading manufacturers of over-the-counter pet medications are Hartz Mountain Corp.; Perrigo Co., whose brands include Sergeant’s and PetArmor; and Central Garden and Pet Co.
  • Hartz and Sergeant’s products are commonly found at supermarkets, mass merchandisers and drugstores, PetArmor is a top brand at Walmart, and Central Garden and Pet does well in pet specialty stores.
  • Merial has used a “two-pronged approach” to defend its foothold in the flea and tick market. “On the one hand, the company launched NexGard,” the report noted. “On the other hand, Merial has been able to stabilize the Frontline brand.”
  • 60 percent of dog owners and 68 percent of cat owners choose spot-on flea and tick products over oral medications.
  • 68 percent of dog owners give heartworm preventives.
  • More than 80 percent of dog and cat owners say they “trust the medications recommended by their vets.”
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Puro predicted that pet drug sales will grow by at least 6 percent a year through 2019, partly because of the veterinarian’s role.

“The veterinary channel continues to be critical to the industry,” according to the report, “as animal health companies understand that the veterinarian will continue to hold considerable sway over pet owner decisions, especially for products that require a prescription.”

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