Veterinarians — especially the younger ones — are struggling financially, and they’re not planning to ever live much more lavishly, because they know the world is changing around them.
The old model of a veterinary hospital as a locally owned small business is under pressure from all sides. And while that’s definitely not good for young veterinarians, it may not be all that good for pet-owners either, even if the transition model — lower-priced drug options outside the veterinary hospital and the cost of veterinary service still being shifted to the old-school in-house pharmacy– means lower overall costs for pet healthcare now.
The change in where you buy medication is but one of the earliest and, so far, the biggest waves to challenge the how veterinarians traditionally do business. But for a generation of younger veterinarians already drowning in educational debt, that wave looks like the beginning of a tsunami.
Or an invasion. By barbarians, no less.
“It’s a provocative title,” acknowledged Dr. Lowell Ackerman, giving the Pfizer-sponsored dawn lecture, “Barbarians at the Gate: Managing the Veterinary Pharmacy in a Time of Extreme Outside Competition,” at the North American Veterinary Conference here in Orlando. (Note: Pfizer is a PetConnection.com sponsor.)
In truth, the barbarians are already inside the gate, and most of the couple hundred veterinarians in attendance knew it well before Dr. Ackerman started speaking.
What they were there to learn were the terms of surrender.
“It’s not a sustainable business model to sell products at substantially higher prices than elsewhere,” said Ackerman, noting that any attempt to defend higher prices to customers isn’t going to end well. And in fact, he argued, it’s a lost cause: Clients who already take their drug purchases elsewhere aren’t coming back to make those purchases, he said, and those who haven’t yet changed their drug-buying habits need a reason to stay.
There were some mild suggestions for counter-insurgency: Veterinarians can choose name-brand medications specifically labeled for veterinary use over human generic equivalents. While human pharmacies can sell veterinary medications, few choose to, at least so far, keeping the business mostly in house. But that isn’t expected to remain the situation for long, said Ackerman, with the big-box chain Target already experimenting with selling veterinary-labeled medications. Ackerman also noted that veterinarians can choose injectible medications when warranted, a shot being something that won’t be sold outside the practice.
But the overarching message wasn’t one of resistance, but change. Veterinarians will need to charge closer to what their services really cost, since they can no longer shift costs to their pharmacy, and they will need to make sure pet-owners are getting good value for those services. Convenience — the ability to buy a pet’s medication on the spot — is one measure of value, but the price competition limits it: $5 vs. $25-40 for the same prescription of a human generic is going to have all but the most time-stressed customer thinking of going elsewhere. But if veterinarians add in the convenience of Web-based refills, auto-reminders and home delivery through a hospital’s website, Ackerman said, the balance may tip in their favor. And he again stressed the need for better service from veterinarians, who must, after all, be both doctor and pharmacist to their patients, with the responsibilities of both something no high-volume, deep discount pharmacy is willing or able to take on.
Still, what the changes mean in the long run is still but an educated guess as the global economy reshapes itself and the big box players get bigger and more powerful. I tell you this, though, based on the perspective of a couple decades of covering the pet-care field: If I had a child interested in being a veterinarian, I’d be tempted to suggest she follow her heart into something that she can make a better living at, like … oh … getting a Ph.D. in medieval English literature.
This story, as they say in the news biz, is still developing. Stay tuned.
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Alarming conference development: I came back to the room after it was cleaned and found a massive tick on the bathroom mirror (picture above). At first glance, I thought it was some kind of warning about bed bugs from the Marriott management, but then I realized the hotel had been paid to have housekeeping staff put the tick ad in my hotel bathroom. The lone star tick may well be on the move (and in fact, all ticks are, per a lecture at the AVMA conference last summer), but the one place I don’t want any ticks inserted is in a room I’ve paid for expecting privacy. Advertising FAIL.
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