March 17, 2010
PetSmart first retailer to carry Advantage under new Bayer policy
Banfield and other clinics turn away
By: Edie Lau
For The VIN News Service
PetSmart has become the first pet specialty store to carry Advantage and K9 Advantix flea and tick medicines since Bayer Animal Health decided to market its products outside of veterinary clinics.
Bayer announced last month that it planned in March to drop a long-standing policy in the United States of selling only to licensed, practicing veterinarians. The company said the change was spurred by consumer shopping trends and demand for more convenient access to pet health products.
The decision also was an acknowledgment that consumers already have been buying Bayer products from sources other than veterinary clinics, owing to legal “gray market” suppliers who divert merchandise from clinics to retailers.
Bayer’s move has been both praised and denounced by practitioners. Some credit the company with recognizing the realities of diversion and being honest about the benefits of retail trade to their business. Others see Bayer as having used veterinarians to cultivate consumer loyalty to their products, then cutting them out of the sales loop now that the products are well-recognized.
So displeased are some about the change that they are turning away from Bayer. Among those that will no longer carry Bayer products is Banfield, The Pet Hospital, the nation’s largest veterinary practice chain with more than 750 clinics.
Bob Walker, spokesman for Bayer Animal Health, confirmed that Banfield will not carry his company’s products. He said the decision is practical, since Banfield clinics are located in PetSmart stores. As to any emotion behind the decision, Walker said, “I’m not close enough to it to know the sentiment.”
Walker also said he did not know the dollar value of Banfield’s lost business to Bayer.
Banfield CEO John Payne, a former president of Bayer Animal Health of North America, directed questions from the VIN News Service to Banfield Senior Director of Practice Communications Kathy Baumgardner, who declined to comment.
A Banfield employee who asked not to be identified said the decision to drop Bayer products was conveyed by company e-mail to its sites.
“The immediate change is that all Advantage and Advantix products are to be removed from the shelf,” the employee said.
In their place, Banfield is offering a private label flea and tick treatment called First Shield, made by Summit VetPharm, which also makes the parasiticide Vectra. The First Shield line debuted nearly a year ago, long before Bayer’s change in sales policy, according to Summit executives. But the Banfield employee said the new line wasn't pushed aggressively upon its debut.
“Eventually, we will phase out use of (Bayer's) other products as well, when time permits and new replacements can be substituted," the employee went on. "But we can still sell what we need until then, i.e., Baytril tabs, Baytril Otic, Droncit, etc.
“However I will not use any of their products because of the (sales) decision. I feel like I have been stabbed in the back by a company that I once did business with.”
The employee said Banfield as an organization shares that sentiment: “(They) feel betrayed. It’s that simple.”
“I used to sell tons of Advantage and Advantix in my own practice when the product hit the market,” the employee added. “It’s the best stuff, in my opinion.
“But Bayer’s decision to go (over the counter) with this product undermines veterinary medicine. Therefore, I feel Banfield’s decision is justified.”
Until Bayer changed its policy, the company — like most of the other animal health companies in the United States — said it wanted pet owners to obtain products only through veterinarians so that they would receive instructions in proper, safe and effective use.
For that reason, Walker said, Bayer will not sell its products to general retailers such as Costco, Target or Amazon.com or to grocery stores, feed stores or sporting goods stores.
“The philosophy is, we’re going to rely on the educated staff at these pet specialty stores to help consumers understand how to use these products,” Walker said. “We believe their staffs are better educated (than employees at general retail outlets) on pet care.”
PetSmart, which has 1,150 stores around the country, is the only retail outlet with which Bayer has established a sales relationship so far, according to Walker. He noted that unlike pet stores such as Petco, PetSmart had not previously carried Advantage and Advantix.
PetSmart spokeswoman Michelle Friedman declined to say why the chain in the past opted not to obtain the products from sources other than Bayer.
“We’re just really pleased to have been able to work with Bayer and be able to offer these popular products to our customers,” Friedman said. “It’s a win-win for everybody.”
Friedman added that PetSmart now also carries Frontline flea and tick treatments. Frontline products are made by Merial, a Bayer competitor. Under Merial sales policy, Frontline products are to be sold only by licensed, practicing veterinarians, although the line widely is available online and in bricks-and-mortar stores.
Dr. Zack Mills, vice president of pet sales for Merial U.S., said PetSmart is not obtaining Frontline from his company.
Friedman declined to reveal the company’s supplier nor would she discuss the gray market and diversion in general.
Walker said Bayer is hopeful that by developing relationships with retailers, the company will discourage diverters from peddling Bayer products any more. He said Bayer is seeking sales agreements with other national chains and perhaps eventually with independent pet stores. He said the retailers are free to price the products as they see fit.
In addition, the company intends to make available all of its animal health products, including prescription medications, through licensed online veterinary pharmacies, including the nation’s largest, Pet Med Express, commonly known as 1-800-PetMeds.
That decision deeply dismays Dr. Mike Thomas, a practitioner in Indianapolis, who is particularly offended by the involvement of online pharmacies, some of which have ads that encourage pet owners to skip visits to their veterinarians and save money by buying medications online. "Negativity toward veterinarians, insinuating that that we are ripping off pet owners and causing them great inconvenience, really annoys me and my colleagues," he said.
As a senior board member of Veterinary Study Groups, Inc. (VSG), a membership organization composed of 245 veterinarians who own or operate 330 practices in the United States and Canada, Thomas was in a position to make his displeasure known to Bayer.
Bayer had been one of 31 companies to enjoy “preferred partner” status with VSG, and Thomas was the group's liaison with Bayer. After he learned of their decision to go directly to pet stores and Internet pharmacies, VSG ended the relationship.
Thomas said he received news of the new sales policy directly from Bayer Animal Health President Joerg Ohle and another company executive, Roy Brackett, when it was time to renew VSG’s agreement with Bayer.
“Give the devils their due, they were very upfront about it,” Thomas said. “They could have kept it a secret when we signed the agreement with them. They were very forthright about it. They feel like they’re riding on a white horse, somewhat, because their products have been available — just as many products have been available — through these outlets (all along), and they feel now at least they have some control.”
Overall, Thomas has mixed feelings about the whole thing. “There are lots of ways you can look at it," he said. On the one hand, considering Bayer's position, he thinks: "It's your product to do with as you want."
In that same vein, considering the position of clinic owners, he says philosophically: "The Lord giveth, and the Lord taketh away. We didn’t have much flea business until these high-tech flea products came along. All of us have made money on them, and it was nice."
At the same time, he feels used. “It’s not unusual for a company to haul out veterinarians to build their brand, and then take it over the counter,” Thomas said. When they do that, he said, veterinarians can’t help but interpret the message as: “Screw you.”
VIN News Service commentaries are opinion pieces presenting insights, personal experiences and/or perspectives on topical issues by members of the veterinary community. To submit a commentary for consideration, email firstname.lastname@example.org.
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