Check out this informative article from Veterinary Information Network News Service about major distributors, generic drugs and the effect that blocking agreements have on veterinary care…
In her daily quest to provide pet owners affordable treatments for their animals, Dr. Julia Lucas routinely seeks out generic versions of drugs. Finding sources for most generics isn’t simple, she discovered a couple of years ago.
The reason is that dominant veterinary-supply distributors in the United States are bound by exclusivity agreements with Zoetis, the world’s largest animal drug manufacturer, that prevent them from selling generic drugs that compete with the Zoetis brand.
Smaller distributors carry generics, but Lucas said making multiple calls to figure out who’s got what is impractical for small practices. Moreover, veterinarians may not even know to look for a lower cost generic because often they rely on big distributors to tell them what’s available.
“We are missing opportunities for our clients because we don’t get the whole information from our distributors,” said Lucas, a practitioner in Maine. “There may be a superior product or cheaper product that is of equal quality out there, but because our distributors may be limited (by) one of these contracts, we don’t have access to the whole information.”
The consequences can be big. Not knowing about or having access to a cheaper drug option, Lucas said, could result in a client forgoing treatment of a pet. Further, being able to offer clients more affordable medications “creates a sense of trust, so that helps us in every other aspect of patient service,” Lucas said. “They know we’re looking out for not just the dog, but them, as well.”
Exclusivity agreements, also referred to as blocking agreements, aren’t new in the industry, but a report released in May by the U.S. Federal Trade Commission about competition in the pet medications industry drew attention to their possible role in stunting the companion animal generics market.
Citing conflicting testimony from stakeholders, FTC staff did not determine whether the agreements do, in fact, impede competition. However, Jean Hoffman, president and CEO of Putney Inc., a leading manufacturer of veterinary generic drugs, has no doubt.
“Putney has achieved a lot of success with our generic drugs, but it has been slow and expensive because we haven’t had access to any of the national distributors for those products where Zoetis controls the brand,” Hoffman told the VIN News Service. “Where we have access, we are able to vigorously compete and achieve market share more rapidly.”
She added: “There’s no amount of money we can invest to make the blocking agreements go away. Distributors are very important to the fragmented veterinary market to getting product to the veterinarians.”