The U.S. market for pet medications is growing, and is in a state of transition. Although many
pet owners continue to purchase their pet medications directly from veterinarians, this traditional
distribution model has been challenged by the entry and expansion of retail businesses (both
online and brick-and-mortar) that sell pet medications, as well as changes in the business
practices of pet medication manufacturers, distributors, veterinarians, and retailers. These
changes in distribution patterns and methods of sale have had varying effects on these market
participants who tend to have different perspectives on how consumers should obtain pet
medications. Some key observations regarding this industry include:
• Major manufacturers of pet medications have historically distributed their products
exclusively through veterinary practices. One reason for adopting this type of
distribution model may have been to promote sales by providing incentives for
veterinarians to learn about, recommend, and prescribe their products. Manufacturers
argue that this model is necessary to distribute their products efficiently and to ensure
the safe use of their products. Others have suggested that these exclusive distribution
policies restrict competition and have questioned whether the purported justifications
offered by manufacturers are valid, particularly with respect to OTC medications
approved for safe use without direct veterinary oversight.
• Most manufacturers use independent, authorized distributors who focus on sales to
veterinarians and veterinary practices. These distributors also argue that pet
medications should be distributed exclusively through veterinary practices. In
addition, some manufacturers may have agreements with distributors preventing them
from selling competing branded or generic animal drugs.
• Veterinarians traditionally have been the principal source of pet medications for
consumers, and many appear to believe that they are best suited to dispense these
products safely to consumers. In addition, veterinary practices typically derive a
significant portion of their income from the sale of pet medications, and many
veterinarians have expressed concern about the financial impact to their practices of
losing these sales. $IGEX
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