An Overview of the

Pet Medication Industry

==========================

 Paul David Pion, DVM, DACVIM 

(Cardiology)

 Veterinary Information Network

Who and What are We 

Talking About?
Why Me?...

• never worked in either 

 drug manufacturing or distribution

• former academic and researcher

• co-founder of Veterinary 

 Information Network (VIN)

• For Veterinarians

• Subscription-based

• No advertising or sponsorship

• Medicine & Information 

• Generation / Quality / Delivery
Why Me?...

• FTC learned of VIN when they 

 found articles by the VIN 

 News Service (news.vin.com) 

 investigating veterinary drug 

 diversion for the gray market.
Disclosures

• I am...

• pro-veterinarian

• pro-pet owner

• pro-patient

• pro-fairness 

• pro-informed choice
Our Information Economy

 

ers

 

 

e

Information 

Consumers

Information

Manufacturers

Information

Distributors

- Wholesale

- Retail

Pet Medication
Our Information Economy

tors

Information 

Consumers

Information

Manufacturers

Information

Distributors

-Product Manufacturers

-Product Distributors

-Conferences

-Specialists

-Veterinarians

-Veterinary Schools....

-Pet Owners

-Publishers

-Authors

-Speakers

Pet Medication

-Product Manufacturers

-Product Distributors

-Conferences

-Specialists

-Veterinarians ---- Drug Retailers

-Veterinary Schools....

-Pet Owners

-Publishers

-Authors

-Speakers 

Online

Big Box
Our Information Economy

Information 

Consumers

Information

Manufacturers

Information

Distributors

-Goal?

-Currency?

-Ethics?

-Stake?

Pet Medication
Our Information Economy

Information 

Consumers

Information

Manufacturers

Information

Distributors

-Quantity

-Quality

Pet Medication

-Quantity

-Quality

-Safety
Our Information Economy

Information 

Consumers

Information

Manufacturers

Information

Distributors

-Supply

-Demand

Pet Medication

-Supply

-Demand

-Price
Pet Medication Market

Size and Make-up

• Bigger than a breadbox (8 to 10 billion dollars?)

• small compared to human biopharmaceuticals

• US animal health $$

• including pet and non-pet species

• so pet market is even smaller

 

 Human Animal

• Pfizer: 23.7B vs 1.38B

• Novartis: 17.8B vs 1.30B ???

• Pfizer - http://www.pfizer.com/files/annualreport/2011/financial/financial2011.pdf - p. 18

• Novartis - http://www.novartis.com/downloads/investors/reports/novartis-annual-report-2011-en.pdf - p.17, 52
Pet Medication Market

Size and Make-up

• MEGA-PRODUCTS

• Flea and Tick Prevention

• Heartworm Prevention

• Everything else

• MEGA-PRODUCTS – continual use

• Flea and Tick Prevention – OTC (EPA)

• Heartworm Prevention – Rx (FDA)

• Everything else – OTC and Rx

• short-term use – e.g. antibiotics

• chronic need is usually more 

 attractive/profitable

• is it worth seeking approval?
Pet Medication Market

Size and Make-up

• What else do we need to know?

• a large percentage of medications 

 prescribed by veterinarians are NOT 

 “LABELED” for the patient species

• same medications (and formulations) you and your 

 grandmother are taking.

• indications, safety, dose, drug interactions 

 often differ from grandma

• Information source / standard of practice

• literature / conferences
Pet Medication Market

Size and Make-up

• Growth trends and future projections?

• ?????
Pet Medication Market

The Supply Chain
The Second

Gray Zone

• Phantom 

inventory

• Virtual 

transactions

Pet Medication Market

But wait, there’s more...

• VetCentric

• VetsFirstChoice

• VetSource??
Pet Medication Market

Consumer Purchasing Patterns?

???
Pet Medication Market

Veterinary Reaction / Thoughts

Bayer comes “out”

Rest remain “in”

XX 

XX 

X 

XX 

XX 

XX 

RIP 

 X$X 

Danger 

 X$X 
Pet Medication Market

A Chain Reaction

How to 

Market? 

$$ 

$$ 

$$ 

Pet Medication Market

 A Chain Reaction or...
Pet Medication Market

A Brilliant Marketing Plan

How to 

Market? 

$$ 

• Direct to consumer too expensive

• Promise veterinarians exclusive

“these products need your expertise”

• Demand distributor exclusivity

• Happy/hero/dependent veterinarians

• Happy clients

• Once brand established ->Gray mkt

• Expands market, price not much 

lower, but larger volume

• Big box entry->end-game or oops??

• Trust in veterinarians damaged?

• Veterinary practices suffer from 

“undercharging” for services

WIN?

LOSE?

DRAW?
Cantor’s Law of the 

Preservation of Ignorance

A false conclusion, once 

arrived at and widely 

accepted is not easily 

dislodged and the less it is 

understood, the more 

tenaciously it is held
Questions 

are the ONLY 

answers