A stagnant economy and fierce competition in the veterinary medicine market made 2012 a tumultuous year for the veterinary industry, but there is reason to be hopeful in 2013.
New technologies, a renewed focus on service and communication and a pipeline of new treatments will help veterinarians increase client visits and provide better care to patients in the coming year and beyond. The industry may also receive some much-needed support from the federal government in the form of grants and loan repayments, but the notorious Fairness to Pet Owners Act is likely to resurface.
The first mass-produced personal computer, the Apple-powered Commodore PET, debuted in 1977 with a 1 MHz processor. Thirty-five years later, Apple put a device with 1,300 times the power of the Commodore PET into our hands with the iPhone 5.
Cellular devices will continue to affect the veterinary industry both in the practice and in marketing to clients.
A new device from San Francisco-based AliveCor can transform an iPhone into a clinical-quality electrocardiograph device.
Called the Veterinary Heart Monitor, the device attaches like a case to an iPhone 4 or 4S. It includes a pair of sensors that can record the electric activity of the heart and is “just as accurate” as traditional ECG machines, said David McCaman, director of marketing operations for AliveCor.
“We’re changing the way people view ECGs,” McCaman said. “It’s not just a cumbersome piece of equipment. We can make it an everyday piece of care.”
The device is undergoing clinical trials at the University of Oklahoma and Cornell University in dogs, cats and horses, but it’s also being used by exotic animal veterinarians in the field, including World Vets in Nicaragua.
Meanwhile, veterinary practitioner and blogger Patty Khuly, VMD, MBA, who writes a column for Veterinary Practice News, plans to debut an iPhone app to assist veterinarians in establishing weight-loss prescriptions for obese dogs.
With more than half of American consumers now owning smartphones, according to a recent Nielsen survey, veterinarians can reach out to clients through these devices to ensure compliance and create sticky customers, Dr. Khuly said.
Her app, which she plans to debut at the North American Veterinary Conference this month in Orlando, Fla., allows users to create a feeding regimen to help their dogs lose weight. The app accesses a caloric database of more than 1,000 foods and treats and creates a recommended feeding schedule based on factors including the dog’s breed, activity level and whether the dog is spayed or neutered.
“[The app] tells [pet owners] in plain English how much to feed their pets,” Khuly said. “That’s the hardest part of weight loss–coming up with an actual prescription for people to follow.”
The app does not have a corporate sponsor. Khuly shelled out about $15,000 to develop the application. She does not expect to turn a profit on it, and will offer it for free through her website and will be handing out free download cards at NAVC.
Service and Communication
Veterinarians have been feeling the squeeze of lost medication revenue from online and mass market retailers.
“We have for years, when I was in practice, charged an awful lot for vaccines and drugs and some really high markups on things that weren’t shopped much,” said Mark Russak, DVM, president of the American Animal Hospital Association. “Clients have started shopping those and found out how much we paid and how much we were up-charging. We started taking a hit in terms of credibility.”
In order to survive in the marketplace in 2013, veterinary practices will need to focus on communicating the value of the services they provide, Dr. Russak said.
“Clients need to look at what we’re doing and what we’re charging,” he said. “They’re not going to worry about [their veterinarian’s] economics. We need to wow people with service. Businesses that have survived and are thriving are doing so in a service world.”
AAHA recently unveiled a new partnership with Idexx that will provide discounts for members on software to help improve client communications. Other companies from Butler Schein to CareCredit have introduced programs to help veterinarians increase between-visit communications with clients.
Social media are among the tools clinics must use to thrive in today’s tech-driven economy, Russak said.
For instance, a Houston-based veterinary practice, Sunset Boulevard Animal Clinic, started hosting a “Pet of the Year” competition. Clients submitted pictures of their pets through the practice’s Facebook page, and the clinic’s staff chose a pet to become the face of the practice’s advertising, including the cover of the clinic’s 2013 magazine, billboards, direct mail, posters, websites, social media and appearances at special events.
“Every practice in the country needs to get on board with [social media],” Russak said. “If you’re not using social media, you’re way behind everybody else.”
As pets have moved from the backyard to the bedroom, owners are willing to go to greater lengths to keep Fido or Fluffy afloat, said Jeffrey Bryan, DVM, MS, Ph.D., Dipl. ACVIM (oncology), associate professor of oncology and director of the Comparative Oncology Laboratory at the University of Missouri College of Veterinary Medicine.
This trend away from automatic euthanasia in the face of life-threatening disease is leading to an increase in demand for specialized medicine, especially for treating the number one killer of companion animals, cancer.
“As people continue to see pets as part of the family, we’ll see more need for specialists, medicine and equipment to treat diseases like cancer,” Dr. Bryan said.
Two U.S. Food and Drug Administration-approved drugs are available specifically for dogs with cancer: Pfizer Animal Health’s Palladia (toceranib phosphate) Tablets and AB Science’s Kinavet-CA1 (masitinib mesylate) Tablets. Both drugs are indicated for treatment of mast cell tumors in dogs, but new treatment options for other forms of cancer are on the brink of being brought to the market, as well.
One such drug is being developed by a Fort Collins, Colo.-based startup company called VetDC, which has shown enough progress on its current drug to earn a recent $1.5 million round of private financing from a group of angel investors.
The drug targets canine lymphoma and has shown efficacy and safety in 62 dogs during clinical trials, said Steven Roy, president and CEO of VetDC. Perhaps of equal importance, VetDC’s business model could lead to a host of new treatment options in the veterinary industry.
The company has partnered with Colorado State University, where many human health pharmaceutical companies commission drug studies in dogs as part of the FDA approval process for a human drug.
Sometimes molecules intended for human health drugs get stalled during the rigorous FDA approval process or are no longer seen as being economically viable on the human health market.
In these cases, VetDC might step in and purchase the molecule and uses the data from the dog studies already performed by the human pharmaceutical company to accelerate the FDA new animal drug approval process.
“Where we’re shortcutting is that we don’t necessarily have to regenerate all those studies,” said Roy. “That’s the sweet spot for us.”
The lymphoma drug that VetDC is developing was originally owned by Gilead, a Foster City, Calif., human pharmaceutical company. Gilead abandoned the project during human clinical trials and sold the molecule, VDC-1101, to VetDC.
Another veterinary cancer treatment technology that is piggybacking on the human health industry is immunotherapeutic vaccinations.
These vaccines attempt to elicit a response from an animal’s immune system to attack cancer cells using the host’s natural defenses.
One such vaccine is being clinically tested at the University of Pennsylvania School of Veterinary Medicine on dogs suffering from appendicular osteosarcoma. The technology is being developed by the biotechnology firm Advaxis of Princeton, N.J., for the human health market, but principal investigator Nicola Mason, BVetMed, Ph.D., assistant professor of medicine and pathobiology at Penn Vet, believes Advaxis intends to bring the treatment to market for veterinary use, as well.
Another immunotherapy vaccine is being studied in a collaboration between the Texas A&M College of Veterinary Medicine and the MD Anderson Children’s Cancer Hospital of Houston. Like VetDC’s drug, the vaccine is intended to treat lymphoma in dogs.
Veterinarians across the United States collectively cringed last year when Rep. Jim Matheson (D-Utah) introduced House Resolution 1406, the Fairness to Pet Owners Act.
The bill would require veterinarians to provide a disclaimer to clients stating that the client does not have to fill a prescription through the veterinarian, and it would also require the veterinarian to provide a written prescription, regardless of whether the medication was to be filled in-house or not.
With the backing of legislative lobbying leviathan Wal-Mart Stores Inc., the bill seemed to have significant steam when it was introduced. But it ended up with only five co-sponsors and eventually stalled out in committee. It was unlikely to be passed by the lame duck congress, according to Mark Lutschaunig, director of the American Veterinary Medical Association’s Governmental Relations Division. But the bill could be re-introduced and the AVMA is particularly concerned that supporters may try to slip it through as a rider on separate legislation.
“We’re going to watch closely to make sure that the Fairness to Pet Owners Act doesn’t get attached to” the Animal Drug User Fee Act, which Dr. Lutschaunig said is must-pass legislation.
ADUFA is basically a negotiation between the pharmaceutical companies and the FDA about how much it should cost to get a drug approved.
Also of concern is that the Federal Trade Commission has yet to act on the Pet Medications Workshop it hosted last October. The FTC could recommend that Congress pass the Fairness to Pet Owners Act or something similar, said Dr. Lutschaunig.
The farm bill will also of interest to veterinarians.
The veterinary industry received several “wins” in the proposed farm bill, including a renewal of the Veterinary Services Investment Act, which provides a variety of federal grants for veterinarians, and the Veterinary Medicine Loan Repayment Program, which helps graduates who elect to serve in areas of need pay off their student debt.
If the five-year bill doesn’t pass in 2012, then a one-year extension of the current bill would likely be enacted as a stopgap measure until next session. However, the veterinary-friendly five-year bill includes federal savings in other areas, so it could be passed as part of the legislation to avoid the “fiscal cliff” that Congress faced in early December.