Target tests market for pet medications

Trend in retail sales of veterinary drugs accelerating

Published: December 22, 2010
By Edie Lau

Target, the retail big-box giant with 1,750 stores in the United States, is testing the market for veterinary pharmaceuticals by selling prescription drugs for pets in four states.

The company began this fall filling prescriptions for animals at pharmacies in 35 stores in Minnesota, North Carolina, Tennessee and Georgia, according to Target communications staff.

In addition to filling pet prescriptions for medications used by humans, Target carries veterinary-specific medications, said a communications staff person who asked not to be named, per company policy. Examples of veterinary medications she named are Atopica for skin conditions, the canine antibiotic Clavamox and the heartworm preventive HeartGard.

The company will evaluate the pilot in spring, she said, and if judged successful may expand to other stores. “It’s another way that Target continues to add convenience and value," she said.

Target’s foray into veterinary pharmaceuticals represents deepening involvement by mainstream retail stores and pharmacies in the lucrative animal-health market. The trend answers consumer demand for greater access and price competition on pet health products. At the same time, it raises concerns in the veterinary community about product quality, appropriate counseling in drug use and lost business.

Historically, veterinarians in the United States have filled their patients’ prescriptions at the clinic. Indeed, most of the major veterinary pharmaceutical companies have policies of selling small-animal drugs only to licensed veterinarians with valid veterinarian-client-patient relationships. (A notable exception is Bayer Animal Health, which in March began selling directly to specialty pet stores and online pharmacies, stirring controversy and debate in veterinary circles.)

Drug manufacturers say their exclusive sales policies help ensure that pet owners are advised by medical professionals in the correct use of medications. The policies also serve to garner brand loyalty from veterinarians, who influence which products pet owners choose.

But retail outlets want a piece of the market, which is worth billions of dollars. Sales of spot-on flea and tick prevention products alone generate some $1.3 billion a year in the United States.

When Walgreens started a “prescription savings club” about three years ago, it included pets under the family plan. For a $35 annual membership fee, families can obtain any of more than 400 generic medications for $4 per one-month dose, and discounts on a variety of other drugs.

Unlike Target, Walgreens fills veterinary prescriptions only for medications that it stocks for people. “Even with those limitations, we fill scripts for a lot of pets,” the company wrote in an internal publication obtained by the VIN News Service. “Between January and October 2009, we filled nearly 400,000 prescriptions for Fido and Fluffy. Our Ecommerce team is looking at expanding in many areas, and a dedicated pet medication section might be in the cards for the future.”

A spokesman for Walgreens was not immediately able to provide updated figures or details about the company’s future plans for pet medication sales.

Meanwhile, the pet store chain Petsmart enjoyed a significant bump in revenue this spring due to its introduction of the non-prescription flea and tick prevention  product lines Advantage and Frontline. Those product sales were credited with spurring same-store sales revenue growth of about 1.2 percent in the second quarter of the year — a boost estimated to be worth between $16 million and $21 million to the company.

A stock researcher who noticed the surge predicted that other large retail companies would take Petsmart’s results as a cue to follow suit, potentially as early as this spring and summer.

“There’s no way that Wal-Mart and Target are going to sit idly by and watch Petsmart take share,” said the researcher, who is precluded by her employer’s policy from being identified by name.

The researcher also speculated that competition from companies with bricks-and-mortar stores could pinch online pharmacies such as the veterinary drug giant PetMed Express.

Certainly the expanding availability of pet medications beyond the clinic is putting pressure on veterinary hospital owners.

“Depending on which region you’re in, a veterinary hospital’s revenue from flea, tick and heartworm products (alone) is easily $100,000 or more a year,” said Wendy Myers, a veterinary practice consultant and partner in Animal Hospital Specialty Center, a referral hospital in Highlands Ranch, Colo.

In an online discussion of the Veterinary Information Network (VIN), an online professional community, reactions to Target’s new program range from irritation and dismay to resignation and acceptance.

“As more of our pharmacy income drops, the more we will have to charge for our services,” said Dr. Spyros Geneos, a practitioner in Dacula, Ga. “So, does the client really benefit? In my opinion, no!”

Dr. Jessica Schoell, a practitioner in southern New Jersey, sees a benefit for patients in retailers getting into the veterinary pharmacy business. “I actually wish they would sell something like enrofloxacin, because it is still really expensive,” she posted.

In an interview by e-mail with the VIN News Service, Schoell, who is not a clinic owner, acknowledged the concerns of owners who generate significant income through pharmaceutical sales. “However, I also see that if (pet) owners see that you are open to trying to help them keep costs down, they will keep coming back and will try to do what you recommend,” she said. “Ultimately, more money is made in the long run with a client who trusts that you are not just out to get their money.”

Dr. Don Hoover, a clinic owner in Durham, N.C., one of the cities where Target has rolled out the pilot, said the chain’s move came as no surprise to him.

“At our hospital, we are focusing on practicing medicine and decreasing reliance on our pharmacy,” he said by e-mail. “We are reducing our drug inventory and working with clients to help them get their pet’s medication in the most economical manner.”

Reviewing a price sheet on Target’s veterinary drug offerings, Hoover said he did not see “huge savings” for clients buying from Target rather than from their veterinarians. “But for generic medications that carry a human label there is typically more savings,” he observed.

Practice consultant Myers advises veterinarians to prescribe veterinary drugs instead of human generics where possible. She gives the following reasons:

• Veterinary drugs are FDA approved for use in animals.
• Research studies are available on the drugs’ effects in animals.
• Pharmaceutical companies have staff veterinarians and sales representatives available for training and support.
• Clients can pick up their prescriptions immediately from the veterinarian rather than waiting at a human pharmacy.
• Human pharmacists typically are not able to counsel pet owners on side effects or how to give a pet a pill.

President of Communication Solutions for Veterinarians, Myers wrote a tip sheet for veterinarians titled “Fight for your pharmacy in a competitive market.” She said in an interview that human pharmacies have a powerful incentive to add pet medications to their inventory.

“When you bring in the prescription, the pharmacist will tell you, ‘Do you have some shopping to do? It’ll take us about 30 minutes.’ So you go get a cart and fill it with cat litter, laundry detergent, lipstick and more. Pharmacies and retailers are using prescriptions as loss leaders to generate ancillary income,” she said.

Myers predicted that mainstream pharmacies will try to answer demand for parasite preventives and medications that manage chronic conditions, leaving drugs for acute conditions to veterinary hospitals.

“Veterinary pharmacies may become more of a sick-pet pharmacy,” she said. “If your pet has explosive diarrhea, you’re not going to want to stand in line at Walgreens (waiting for medicine)....

“If we know that preventives and chronic medications are going to be going to human pharmacies,” she said, “then veterinarians need to change their pricing strategies and offer Target pricing (for those drugs).”

Besides being concerned about lost business, veterinarians and their advocates question the source and quality of drugs sold by retail outlets. Since most of the major veterinary pharmaceutical companies maintain that they do not sell their products to anyone but licensed veterinarians, retailers likely are purchasing drugs on what is known as the gray market — a secretive world populated by importers and domestic brokers who buy product from veterinarians and possibly other sources in a process known as diversion.

Not necessarily illegal, diversion is widely considered unethical in the veterinary community.

“Where is Target getting these branded veterinary drugs?” Gigi Davidson, director of clinical pharmacy services at North Carolina State University College of Veterinary Medicine’s Veterinary Teaching Hospital Pharmacy, wants to know. “Does Target employ licensed veterinarians? Maybe, but probably not. Otherwise, one would have to seriously question the quality of these branded drugs if not obtained through legitimate channels.”

Target did not respond to questions from the VIN News Service about the sources of its veterinary-specific medications.

Representatives from Merial, Novartis and Pfizer — makers of HeartGard, Atopica and Clavamox, respectively — said they are not supplying Target and that Target is not an authorized dealer of their drugs.

“They do not get it from us, so we don’t know how they would be sourcing it,” said Dr. Mike Wallace, group director of U.S. veterinary operations in Pfizer’s companion animal division.

Wallace did not know specifically whether Target asked Pfizer if it could buy product directly from the company, but he said Pfizer has been approached by big-box retailers with that question. “We’ve consistently said no, we’re not interested,” he said.

In addition to raising worries about product sourcing, Davidson and others questioned the level of training in veterinary pharmacology received by pharmacists in mainstream pharmacies.

“I understand that it is our responsibility to educate our clients about drug interactions and be aware of their current prescriptions,” said Dr. Michelle Scott, a practitioner in Carlyle, Ill., in the VIN message-board discussion. “I was just wondering if the Target (and every other) pharmacists are going to be aware of drug interactions, dosages, pharmacokinetics, etc., of these drugs, since they will be dispensing them and refills could potentially be dispensed for uses that our clients have not communicated with us.

“I suppose we could require a brand-new prescription with an exam instead of offering refills, but that doesn’t seem entirely practical,” Scott added.

Davidson echoed Scott’s concerns. “Steroids and NSAIDs (non-steroidal anti-inflammatory drugs) are commonly used in humans with no adverse effects,” she said, by way of example. “This combination is potentially deadly in dogs, (causing) gastric perforation.”

One problem is that education requirements for pharmacists lag behind the trend in mainstream pharmacies dispensing veterinary drugs. “Current accreditation standards for pharmacy education do not require any education regarding veterinary pharmacotherapy,” Davidson said.

Donald Plumb, author of Plumb’s Veterinary Drug Handbook, said that pharmacists who have special knowledge of veterinary medicine generally learn it on the job.

“Veterinary pharmacist is a self-appointed description because there is no true boarding of veterinary pharmacists,” said Plumb, who retired in 2004 from the University of Minnesota where he was a veterinary pharmacist and later served as director of the veterinary teaching hospital.

He added that professional groups serving veterinary hospital pharmacists offer various credentials, but those are not geared for personnel in mainstream pharmacy settings.

“Does the average pharmacist working in a drug store or wherever have the knowledge to do the best job professionally for that veterinary patient? The answer, generally speaking, is no,” Plumb said.

“Now,” he continued, “do they have the background and training that they could learn that relatively quickly? The answer is yes. If they had some education in the differences between human and veterinary patients and access to decent reference materials, could they do a professional job? The answer is yes.”

Plumb said that while an 8-hour crash course may not turn most pharmacists into experts in veterinary pharmacology, such training should at least provide them enough knowledge so that veterinarians could be more comfortable working collaboratively with them.

“The bottom line is that we want the very best for our patients, whether furry or not,” Plumb said. “If we agree that each one of us doesn’t know everything, then we need to work with people with different areas of expertise. Pharmacists can contribute a lot to the care of veterinary patients.”

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