Pet owners deserve the wider choice and better prices that true competition in the pet-drug market could create.Carmelka/Getty Images/iStockphoto
In human medicine, a physician writes a prescription and a pharmacist dispenses a drug. In animal medicine, a veterinarian is both the prescriber and the dispenser.
A pet owner may wonder: Why is that? Are pharmacists legally barred from dispensing animal drugs? Is there some special skill only a veterinarian can possess? Is there a serious public safety risk? Does this make drugs for pets more affordable?
The answer to those questions is … no. Pharmacists are legally allowed to dispense pet drugs. Any skills they don’t have they can learn, as they do to handle a variety of human treatments. If there were a serious public safety risk, no doubt we would have seen it in other countries that allow pharmacies to dispense pet medicine, such as the United States and Britain.
Yet Canadian pharmacies cannot stock drugs for animals for the simple reason that drug companies and the domestic veterinary industry will not let them. The result is higher prices.
That needs to change. Pet owners (about 60 per cent of all households) deserve the wider choice and better prices that true competition in the pet-drug market could create. It is just one of a number of business practices in the veterinary industry that regulators need to examine.
Of all the potential competition issues in the sector, the sale of pet medication is the most problematic. The makers and distributors of pet medication have created a sort of cartel, whereby they refuse to make the products available to anyone who does not run a veterinary clinic.
Why would the drugmakers favour veterinary clinics? They are easier to influence. Veterinarians have an inherent conflict of interest in both prescribing and dispensing medication, because they could make financial gains based on what they prescribe. This link was severed in human medicine for a reason.
Pharmaceutical companies sometimes install software on clinic computers so they can closely track sales of products and encourage veterinarians to sell more. And they provide regular financial rebates to vets based on sales volume.
Those rebates and the general revenue from medication makes up a large share of a clinic’s annual revenue. Some veterinarians argue losing that revenue would be a serious financial blow. The Competition Bureau in May argued for opening up the market and said more affordable medication could boost pet ownership.
Some veterinarians are willing to write a prescription to be filled at a pharmacy, if there is a human equivalent of the pet drug. That is a good practice, but unfortunately not all vets do this and not all drugs are available this way.
There are other factors that have added to the cost of veterinary care – including ownership. Global corporations have bought up at least a fifth of all clinics in recent years to assert control over care, pricing and staffing. Of Canada’s three largest chains, two – VetStrategy and NVA – are backed by international private equity, while a third – VCA – is owned by Mars Inc., the U.S. firm better known for chocolate.
The Globe this week reported on one pet owner who saw the price of a prescription rise to $509 from $330, after her independent clinic was bought by a corporation. A recent report from vet-trade publication VIN News Service said staff at one chain have been pressured to increase prices every three or four months, and increase their markup on medication.
Britain’s Competition and Markets Authority recently launched a review of the veterinary sector. It was concerned that the cost of vet services was rising higher than the pace of inflation.
Part of the reason is consolidation. In Britain, corporate-owned clinics went from 11 per cent of the market in 2013 to 55 per cent in 2021.
All these worries are present in Canada’s vet business. The Competition Bureau should begin its own market review, which would be a good early test of proposed new powers in the works from the federal government. Provincial vet associations should release their annual fee guides publicly, so pet owners can assess their own vet’s prices. And corporations should be transparent about their ownership, so pet owners know who is really setting prices.
Caring for a sick animal can be a stressful and emotional experience for pet owners. That makes transparency in pricing and business practices all the more important.