Trends in the veterinary industry continue to change both for the positive and negative. At a Brakke Consulting Inc., veterinary industry roundtable this week at the Kansas City, Mo., office of law firm Stinson Morrison Hecker LLP, Brakke’s Susan Warren discussed the industry’s ever-shifting landscape.
Warren noted some recent and ongoing events that have created a ripple such as:
- The Pfizer/Zoetis IPO which created a lot of interest in the field.
- Veterinary student debt load and lower salaries making main stream news (NY Times, Feb. 24). “This is an area that needs to be addressed if we are going to have a healthy veterinary profession,” Warren said.
- IDEXX and Federal Trade Commission settlement ended a law suit and changed the distribution channel for medical devices, which has impacts for animal and human diagnostic companies.
- The economy continues to slowly recover, as is the veterinary industry.
Specifically on the food-animal side, Warren mentioned these situations:
- Farmland prices have increased 20%+ in many areas.
- Values for both animals and grain are at record highs and likely to continue.
- Drought has had an impact on animal numbers and food prices.
- Suppliers and products dependent on annual doses (vaccines, dewormers, etc.) have been impacted by reduced food animals numbers.
Warren discussed three major trends that have occurred and are occurring in the animal health industry:
1. Changing industry ownership
- Bayer acquires Teva and KMG Chemicals. Warren said Teva could change the generic products competitive landscape, and it strengthens Bayer’s position in companion and food animal sectors. KMG provides a broad range of parasiticides and will increase the market share in food animal lines.
- Warren noted that smaller strategic acquisitions will accelerate the shift of veterinary clinic dispensing to over-the-counter, reduced investment in R&D, fewer but larger companies and will create challenging relationships within distribution and manufacturing.
2. Generic drugs
- Increased use will continue.
- China is already supplying product, but now is establishing U.S. operations.
- Some products going off patent 2013-2018 include Deramaxx, Comfortis, Trifexis, Advantage multi, Gastrogard and Paylean.
3. Use of technology
- Companies will be more involved with practices to educate clients and increase visits.
- Top performing practices will develop comprehensive communication strategies.
- Smart technology will enable an increasing menu of rapid diagnostics and sharing of information.