Pharmacist alleges firms curb supply of pet medicine to hike prices

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An Ontario pharmacist has launched a complaint with the national Competition Bureau that alleges veterinary drugmakers and distributors are restricting the supply of pet medicine and causing higher prices for consumers.

Wendy Chui, who owns a brick-and-mortar pharmacy in Toronto called Canada Chemists and an online store called PetsDrugMart.ca, alleges in the complaint filed last week that pharmacists are being blocked from stocking pet medicines, which they are legally allowed to dispense.

She said the practice is anti-competitive because it limits clients’ options for purchasing medicine and has the effect of raising prices because she charges, on average, 40-per-cent less than what veterinarians charge for the same drugs.

For example, Ms. Chui said that at her store she dispensed 15 ml of Clavamox drops, a broad-spectrum antibiotic, to a patient for $29.61, less than half of the $62.01 that a veterinarian charged.

In human medicine, usually a medical professional will write a prescription for a patient to bring to a pharmacist to dispense. In animal medicine, a veterinarian is usually both the prescriber and dispenser of a drug. In Ontario, veterinarians are required to fill out just a prescription, and not dispense, if a client asks. Some veterinarians will write a prescription that can be filled at a regular pharmacy if the drug is also used for humans.

Ms. Chui began dispensing veterinary drugs from her retail location in 2010, and online in 2013. She said the sole Ontario distributor of those drugs – the veterinarian-owned Veterinary Purchasing Co. Ltd. (VPCL) – refused from the beginning to supply her with stock and so she turned to other veterinarians to order products for her.

Ms. Chui has also approached more than a dozen pharmaceutical companies about buying their products directly and been refused.

In 2015, VPCL and drug manufacturers found out about the arrangement with the veterinarians and stopped selling to them. That same year, the College of Veterinarians of Ontario, which oversees the profession, changed its regulations to bar veterinarians from supplying pharmacists with products intended for resale. Ms. Chui’s veterinarian suppliers responded by switching to Montreal-based CDMV Inc. as their distributor, instead.

The pharmaceutical players then went after the professionals involved. A veterinarian employed by Bayer Inc. filed complaints with the Ontario College of Pharmacists against Ms. Chui and another pharmacist who worked for her.

A disciplinary committee dismissed the complaints in 2018 and said there were no risks to public safety. “The panel is concerned that the complainant is utilizing the College’s complaints process in an attempt to stifle competition for veterinary medications by inappropriately invoking the Pharmacy Act,” the panel wrote in its final report. “The panel emphasizes that this is an inappropriate forum in which to raise business issues, as the mandate of the College is the protection of the public.”

Bayer also lodged a complaint with the College of Veterinarians of Ontario against Richmond Hill veterinarian Howard Covant, who was one of Ms. Chui’s suppliers. In 2020, two members of the three-person disciplinary panel found Dr. Covant violated the regulations. The third dissented, arguing there was no evidence of a public-safety risk. Dr. Covant appealed and lost at the Ontario Superior Court of Justice in 2021 and is awaiting a hearing at the Ontario Court of Appeal.

Jan Robinson, chief executive officer of the College of Veterinarians of Ontario, denied pharmaceutical companies had any input into the regulatory language changes in 2015. She said veterinarians should only dispense medication they are prescribing, except in some limited emergency situations.

“A veterinarian is not a drug wholesaler,” she said.

Ms. Robinson said that Ms. Chui’s issues getting supplies of pet drugs are between her and the pharmaceutical companies and distributors, and should not involve veterinarians.

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Rich Verman, co-owner of ThePetPharmacist.ca, an online store attached to a physical pharmacy in Concord, Ont., said he has gone through the same issues as Ms. Chui and has also had to find veterinarians willing to resell products to him.

“Veterinary drug manufacturers, while allowed and morally and legally obligated to sell to all authorized persons, they have willfully not allowed their products to be sold to anyone but the handful of vet distributors,” he said.

VPCL did not respond to a request for comment from The Globe and Mail.

Bayer said only that it was not aware of a complaint with the Competition Bureau and that it sold its pet business to U.S. pharmaceutical Elanco Animal Health Inc. in 2020.

In the 2020 report of the veterinary college’s disciplinary panel, witnesses from Bayer and VPCL confirmed it was their policies not to distribute products to pharmacies.

Tamara Hofstede, then Bayer’s manager of veterinary scientific affairs, is cited in the report as testifying that the company does not offer its animal products for sale to human pharmacists so that it can better track where its products end up, as it cannot track sales from pharmacists the same way it can from veterinarians.

Another employee of Bayer is cited in the report as testifying that the company had – with a veterinarian’s permission – installed software on a clinic’s computers to track sales of their products so that it would be in a better position to offer customers other Bayer products based on their sales patterns. The employee testified that Bayer began to suspect the veterinary clinic was reselling some of its stock to a pharmacy, based on the sales patterns it was monitoring.

Ms. Chui said she thinks the dispute is about companies wanting to control of all aspects of the supply chain. “If there is one single line of distribution, you know who is selling, and you know what to do to sell more,” she said.