Vets market investigation: an update from the Inquiry Chair
Source: gov.uk (2025-03-21)

Speech delivered by Martin Coleman, Inquiry Chair of the CMA’s market investigation into veterinary services for household pets.

Introduction

I have owned dogs and cats for many years – I currently have a sprocker spaniel – and know from my own experience that veterinary professionals are caring, highly skilled individuals focussed on the wellbeing of the animals under their care. One of the great privileges of chairing this inquiry has been the opportunity to meet veterinary practitioners of different levels of seniority working in a variety of settings across the country and this has confirmed my previous impression of the profession.

I was pleased to see from a consumer survey (https://www.gov.uk/cma-cases/veterinary-services-market-for-pets-review#consumer-survey) that we undertook for this inquiry, that this is also the view of the vast majority of pet owners. 88% considered that their vets focus on the highest standards of care for their pets.

While the professionalism and commitment of individual vets is not in doubt there is increased public scrutiny of the business of providing veterinary services and this is the focus of our market investigation.

It is perhaps not surprising that the commercial aspects of vet services have risen up the public agenda. These services are mainly delivered by businesses who, in order to survive, innovate and grow, must of course charge a fee to pet owners. This is not new but in recent years the growth of large veterinary groups, who now serve around 60% of the market, has made this business facing element of veterinary services more apparent.

And there have been other developments which have focussed attention on the cost of vet services: important advances in medicines, diagnostics and treatments which, while beneficial to animals, come at a price; the increased cost of employing staff; a large increase in pet ownership during the pandemic, including by first time owners who are less aware of the costs of having a pet; the cost of living crisis and prices that have risen significantly – all this in the context of the strong emotional attachment between owners and their pets.

I know that some have sought to equate these concerns with the very existence of our market inquiry – the suggestion that by setting up this inquiry the CMA has created discontent where it did not exist before. This is misconceived. The trends that I have described long predate our inquiry which is in part a response to pet owners’ concerns. That said we are very conscious of our responsibility not to use language that improperly conflates justified scrutiny of the business practices of vets with lack of trust in the professionalism of individual practitioners.

Our job is to identify whether veterinary businesses, large and small, are providing pet owners with a good choice of fairly priced services. If some of the earlier criticisms are wrong, we shall say so. If some may be justified, we shall look for ways in which concerns can be addressed. In doing this we are part of the solution to building further confidence in veterinary services, not part of the problem.

Indeed, it appears that our inquiry may already be having a positive impact: we have heard that more vet businesses are displaying pricing information on their websites; the BVA has produced a guide on how to increase transparency; the RCVS has done work to increase awareness of the consumer-facing provisions in its Guidance, and – most importantly – there has been a widespread and constructive conversation about how the industry could change.

Businesses and consumers

Let me be clear on one thing. The provision of veterinary services on a commercial basis is not a recent development and can be entirely consistent with good animal care and responsive consumer service. There is no NHS for animals and this is not going to change in any foreseeable future. So if we want the best care for our pets this is going to be provided in the main by businesses – whether they be owned by individual vets or by corporate organisations. If businesses are to be incentivised to open and expand to meet pet owner needs and invest in training and equipment so that we have high quality treatments and innovative services, they have to charge prices that cover their costs and allow for a reasonable return.

Successful commercial provision is not inimical to animal welfare, it is a necessary foundation of good animal care. Efficient, well-run vet businesses that make a reasonable profit are good for pets and good for pet owners.

There has been much discussion about the differences between independent vet businesses and those owned by corporate entities. This can be too simplistic. Both independents and large groups have to respect commercial realities to survive and prosper. While large veterinary groups have features in common such as the size and scope of their operations and non-vets holding some key decision-making roles, there are also important differences between these groups including in ownership structure, business models, the relationship between the centre and individual practices and the extent of integration between first opinion practices and other services such as crematoria, referral centres and out of hours services. Similarly there are differences between independents including their business structure and levels of investment in training and facilities.

So, we need businesses earning profits to ensure that we have good vet services. We have these, so why the need for a market investigation?

The concern comes if those businesses are not facing sufficient pressure to ensure that the choices and prices offered to consumers are fair. In such circumstances costs can increase more than is appropriate, prices may escalate and choices between different types of practice and treatments could be restricted. This is often signalled by profits being much higher than one would expect in a well-functioning market – we are considering whether this may be the case.

I know that many vets bristle when we speak of vet services being provided in a ‘market’ with its connotation of transactions based principally on price and short-term opportunistic decisions. This is not what we have in mind when we think of a well functioning market in veterinary services. We know that the relationship between a vet and a pet owner is not commoditised – it is not like purchasing a mobile phone contract. It is based on trust and confidence in the vet’s professional expertise. At its heart is the welfare of animals. So a well functioning market in veterinary services is not one where vets are every day seeking to outbid each other on pricing offers and consumers are switching vets each time their animal needs a consultation. But neither is it one where consumers are oblivious to differences in price, service offering and quality between vets, and vets have no incentive to pass on efficiency savings in the form of lower prices or higher quality treatment.

Our investigation is seeking to determine how far competitive conditions are such that vets are properly compensated for their time, skills and investments and pet owners are able to benefit from efficiencies and differentiation by having a good range of choices at fair prices.

Let me illustrate this by highlighting 3 of the areas we are considering: transparency; choice of medicines and the role of regulation.

Transparency

Most would agree that consumers should know the price of a product or service before they commit to buying it. This ensures that the consumer knows they can afford the product before they enter into the commitment and, if they wish, they can make comparisons between suppliers. This particularly matters when a pet owner is choosing a new first opinion practice or faced with potentially expensive treatment for their pet.

Effective competition does not mean all pet owners always making comparisons or responding to price differences. Many people will value an existing relationship with a vet and decide that this is more important than any price differentiation. But this needs to be their choice not a default because they are unaware of the facts.

We found at the start of our inquiry that 84% of vet practice websites had no pricing information although we have heard anecdotally that this has improved. Even when prices are available on websites, they can be difficult to locate and are for a limited range of services not consistently described across different practices and therefore hard to compare. Our survey found that only 18% of pet owners compared prices before choosing a vet and that less than half (43%) recalled being given price information for non-routine treatment in advance.

While there are cases where it is very difficult for a vet to anticipate the price of a course of treatment, there are many circumstances in which this is possible and we are considering how far we might mandate greater awareness of veterinary costs to enable pet owners who wish to make comparisons to do so. There are services such as vaccinations and neutering where pricing is easier to assess and make known even where there are options associated with these procedures, for example a laparoscopic spay versus a standard open procedure. We are considering whether other surgical procedures such as cataract and Tibial Plateau Leveling Osteotomy (TPLO) surgery are capable of better pricing indication. We are aware that some centres offer fixed prices for such surgeries incorporating all necessary elements of the procedure.

As professionals subject to the The Royal College of Veterinary Surgeons (RCVS) Code, vets will always ensure that animal well-being is not compromised, and this gives assurance that pricing transparency will not drive substandard service. That said, provision can vary between vet practices even if they all are providing a good service – this may be reflected in the use of more advanced equipment leading to better clinical outcomes; staff with advanced qualifications or other factors such as the comfort of the waiting area.

So a vet charging a higher price may be a better option for some pet owners because that vet has invested in wider quality improvements. We are considering how this might be signalled to consumers to help their choices, though we know that this is challenging particularly when it comes to clinical matters.

It could be left to the individual vet practice to make clear on its website and marketing material what services it offers and consumers could assess the highlighted price against this information. We know that recommendations from friends and neighbours are an important source of information when choosing a vet, reflecting the real-world experience of the practice’s clients. Other suggestions that have been made to us include giving transparency to Net Promoter Scores as an indicator of client satisfaction or an enhanced form of the Practice Standard Scheme which indicates relative quality against defined markers.

Price and quality are not the only factors that matter when choosing a vet. Practice ownership is important to a sizeable minority of pet owners and among these there is a strong preference for independent ownership. Yet the majority of clients of those large veterinary groups which do not operate common branding are unaware that their practice is part of such a group. Knowledge of this ranged from around one fifth to one third depending on the group. We are considering whether and how levels of ownership transparency might be improved, including for affiliated services such as referral centres or even crematoria.

Medicines

Medicines represented at least 20% of pet owners’ spend on vet services in the past year including medicines used as part of treatments by vets as well as those dispensed from a practice or sold online.

We know that many vet practices apply a significant mark-up on medicines, with the prices paid by pet owners being sometimes 3 or 4-times vets’ purchase costs. This mark-up, or part of it, may be necessary to recover the costs of operating a dispensary, for example the wastage costs of short life injectable medicines. Some vets told us that their medicine revenues subsidise prices of other services, for example consultation fees.

Some medicines can be purchased from online pharmacies at a much lower price compared to vet practices. The price difference can be significant: for example, a 47% cost saving when purchasing ApoquelFootnote1 (https://www.gov.uk/government/speeches/vets-market-investigation-an-update-from-the-inquiry-chair#footnotes) from one online pharmacy compared to the typical price in practice. The cost savings for other commonly used medicines, such as MetacamFootnote 2 (https://www.gov.uk/government/speeches/vets-market-investigation-an-update-from-the-inquiry-chair#footnotes) and VetmedinFootnote3 (https://www.gov.uk/government/speeches/vets-market-investigation-an-update-from-the-inquiry-chair#footnotes), can be even greater (51% and 63%, respectively).Footnote 4 (https://www.gov.uk/government/speeches/vets-market-investigation-an-update-from-the-inquiry-chair#footnotes)

Although most vet practices display a notice telling clients they can request a prescription and purchase medicine elsewhere, a substantial proportion of pet owners (38%) are not aware of this, and those that are aware are more likely to have found out through word of mouth (42%) than from their vet (35%). Only a small proportion of pet owners purchase medicine from third-party suppliers (16%), although it is more likely that they will purchase on-going medication for chronic conditions in this way.

There will be many pet owners who prefer the convenience and assurance that comes from purchasing from their first opinion practice, even if this means paying more. That is their choice but to make a choice there must be awareness of the option to buy online and the extent of cost savings if one were to do so. There must also be the possibility of making comparisons and, while this can be easily done where the choice is between buying a particular brand and dosage at the first opinion practice or online, this is more difficult where, as is the case for some veterinary groups, the pet owner is offered a white label brand that is unique to that practice.

Only a small proportion of people choose a first opinion practice based on the price that the practice charges for medicines. However, over the lifetime of a pet this can be a considerable cost. We are considering how any concerns about medicine pricing might be addressed including how far pet owners should be given a better indication of a business’s approach to pricing.

Regulation

There appears to be a universal consensus that the current system of veterinary regulation is not fit for the modern age and legislative reform is needed.

Part of the discussion on regulatory reform involves questions of professional and clinical judgement that, as a competition regulator, we are not best placed to decide. We are nevertheless interested in regulation because it may have an impact on how businesses compete and the choices that consumers have.

In a well-functioning market, we might expect that the regulatory system contains only the requirements and restrictions that are necessary to protect important public interests and animal welfare; while giving consumers the confidence and ability to make informed choices and providers the freedom to innovate and offer a range of products, services, business models and practices to meet differing consumer needs.

For example, we know that much of the profession is supportive of clarifying or extending the range of activities that can be carried out by veterinary nurses. This is principally a matter for professional consideration but, in so far as it may mean that practices can operate more efficiently and cost effectively and consumers can be more confident in the services they are buying, we may have a view.

If making a form of practice standards scheme mandatory, with requirements above what is necessary to demonstrate competence, disproportionally drives up costs, with the result that smaller vets find it more difficult to open or expand, that may be a concern. On the other hand, a revised practice standards scheme could make it easier for consumers to better judge relative quality differences between vet practices and that may be helpful in improving transparency and driving quality improvements. These are areas in which competition and consumer interests have to be assessed in the light of broader public purposes.

Effective regulation requires appropriate oversight of the conduct of veterinary professionals and vet businesses with effective monitoring, enforcement and redress mechanisms, if they fall short. This is not just in the interest of animals and their owners but also the veterinary profession which is let down by the small number of vets who fail to observe acceptable standards. We are considering how far the current regime contains sufficient mechanisms for monitoring and enforcement and for consumers to obtain redress where problems occur.

Conclusion

We have not formed even provisional conclusions, let alone final views, on any of these topics. We are glad to have received constructive responses to our recent working papers from a range of stakeholders. Some have noted the thoroughness of our approach and our understanding of the sector and the issues it faces. Others pointed to areas where they believe we may have misunderstood certain issues. We will consider these responses as we develop our thinking through the next stage of the investigation. And we still have working papers to come – including on profitability and potential remedies in which we may set out for consideration some of the approaches I have outlined today along with other options.

Let me conclude by setting some context for our deliberations. Vets are highly trained professionals and the public rightly relies on the advice they give. A relationship of trust. Veterinary services are complex. Even very common services such as neutering can carry uncertainties and risks of complications. Medicines are the product of years of research and prescribing and administering animal medicines can be complicated. All this requires that, as an authority focussed on competition and consumers. we should proceed with care.

There is another perspective. 78% of pet owners we surveyed said that their pet’s healthcare was as important as that of family members (including six per cent who considered it more important). Most pet owners said that pet care costs should always or often be prioritised over other important household expenses. Significant costs are incurred and sacrifices made by pet owners to care for their pets. Pet ownership is not, thank goodness, the preserve of the wealthy. While there is a difference in annual spend on veterinary services between people with higher and lower incomes that difference is not proportionate – lower income families spend a higher proportion of their income on vets than wealthier households.

And the perceptions of the vet and practice when it comes to decisions over treatment appear to differ between those who are financially struggling and those who are more comfortable; for example, a much higher proportion of survey participants ‘finding life financially very difficult’ (35%) did not agree that their vet considers their personal circumstances when deciding which treatment options to offer compared to those ‘living comfortably (19%) or ‘doing alright’ (18%). The price of veterinary services and the ability to exercise choice within a safe and proportionate regulatory framework therefore matters. This is very much our territory as a competition authority.

Our role in a market investigation is to decide whether the market is working well and, if it is not, to consider solutions that are proportionate and effective. We are aware of the complexity of the issues and the risks of unintended consequences. We therefore very much welcome and appreciate the positive approach to this inquiry that the professional associations – including the BSAVA – the RCVS, vet businesses of different sizes and individual veterinary professionals have demonstrated. This spirit of constructive engagement will be incredibly valuable as we enter the final stages of our inquiry and, if problems are identified, we seek to come up with pragmatic solutions that work for vets, pet owners, animals and the sector.

Footnotes

Footnote 1: Treats itching associated with dermatitis

Footnote 2: An anti-inflammatory drug for the treatment of pain and inflammation

Footnote 3: Treats congestive heart failure

Footnote 4: These estimates of cost savings are taken from Pet Drugs Online (PDOL), an online pharmacy that is part of the IVC Evidensia (IVC) group.