After more than two years of analysis, the Federal Trade Commission published a much-awaited report on the pet medications industry. The FTC found that veterinarians will continue to face increasing competition from non-veterinary retailers on pet medication sales.
As you may recall, the FTC brought together a number of stakeholders, including the AVMA and our member veterinarians, for a public workshop in October 2012 to examine consumer protection issues within the pet medications industry. That workshop, along with more than 700 written comments, informed the agency’s report released yesterday.
With nearly $7.6 billion spent in 2013 on prescription and over-the-counter medications for dogs and cats, the agency aimed to answer three specific questions about the pet medications industry:
- To what extent, if any, is competition in the pet medications industry adversely affected by limited consumer knowledge of and access to “portable prescriptions” (i.e. written prescriptions that can be filled outside of a veterinary clinic)?
- To what extent, if any, is competition in the pet medications industry adversely affected by manufacturer distribution practices that restrict non-veterinary retailers’ access to pet medications?
- To the extent that competition in the pet medications industry may be adversely affected by current industry practices, are there less restrictive approaches that could be used to enhance competition without compromising animal health and safety?
Among the findings in the report, the FTC staff believes that improved consumer access to prescriptions would likely be beneficial to consumers, but does not show any evidence that veterinarians are withholding written prescriptions from their clients. The executive summary states:
“Staff concluded that portability likely benefits consumers, and therefore generally supports policies that would increase consumer awareness of the availability of portable prescriptions and veterinary release of prescriptions to consumers. Consumers could then choose whether to purchase pet medications from their veterinarian or an alternative retail outlet. More information is necessary, however, to determine the extent to which consumers are aware of their ability to receive portable prescriptions and the extent to which veterinarians refuse to provide portable prescriptions to their clients. Likewise, more information is needed to determine the full economic impact of greater prescription portability.”
The report also finds that exclusive distribution and exclusive dealing practices by pet medication manufacturers could come under increasing competitive pressure in the marketplace and may be difficult to sustain, particularly if prescriptions become even more widely requested by clients, and retail pharmacies continue to compete to fill them. The FTC staff said that a number of issues could benefit from further investigation, including: the pricing of pet medications across different channels of distribution; the rate of errors in pet medication dispensing by retail pharmacists and veterinarians; the need for and impact of automatic prescription release requirements; and details regarding the secondary distribution system for pet medications.
The report says what many of us have known for a while—that the pet medications industry is evolving. As consumers are presented with more choices of where to fill their pet’s medications, we, as veterinarians, hope that the health and welfare of our animal patients is central to that decision. We acknowledge, however, that more work needs to be done to improve the lines of communication and education between animal and human pharmacists, and the AVMA has been leading that dialogue on this important issue so we can ensure that our animal patients are not only given the right doses of the right medications, but that the medicine they are receiving is safe.
We understand that cost is an important factor when it comes to caring for pets and encourage pet owners to talk with their veterinarians about any concerns they may have so that together they can determine the best treatment options. That said, the AVMA continues to believe that a legislative mandate (S. 1200) on veterinarians to provide written prescriptions for every prescription for a companion animal, whether or not the client needs or requests it, is burdensome and unnecessary. The AVMA’s Principles of Veterinary Medical Ethics and its guide on Client Requests for Prescriptions already encourages veterinarians to write prescriptions when asked by a client, and due to the impressive advocacy work by many state veterinary medical associations, 35 states now have similar laws or policies.
The AVMA would like to thank those of our members who have been engaged with us on this issue by participating in the FTC’s 2012 workshop, submitting comments, and spreading the word within your state veterinary medical associations and other social channels. Together, we have been able to ensure that the commission hears and understands how changes in the pet medications industry present new challenges that can impact animal health and welfare and veterinary small businesses.
For more information, see the FTC’s press release and download the full report, “Competition in the Pet Medications Industry: Prescription Portability and Distribution Practices.” Feel free to let us know your thoughts by commenting on AVMA’s blog below or you can comment directly on FTC’s website here.