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Monday, June 14, 2010

Internet Veterinary Pharmacies

"The same medication I get from my vet...for half the price!" The internet pharmacies LOVE to advertise this message on TV. It used to bother me, but now, not so much. Thanks to these pharmacies, the veterinary business model is changing, maybe even for the better. Let me explain...

In the not-so-distant past, veterinarians derived most of their profit from two sources: vaccines (marked-up 500-1000%) and pharmacy items (marked-up 100-1000%). Makes us look like scoundrels, doesn't it? The other side of that equation was that we lost money on almost everything else! We used to charge $35 for an X-Ray taken on a $20,000 machine, or repair a fracture or do a bowel resection for $300. We lost money on these things because: 1)We were afraid to charge what we needed to to make them profitable 2)We were subsidized by our vaccine/pharmacy income 3)That's the way it was always done.

The emergence of the internet pharmacies is changing everything. Our vaccine and pharmacy mark-up is now lower, so we can compete with the internet on price. They do have some competitive advantages here. They buy in bulk, and often pay much less than we do for the same products. They also lack the overhead expenses of a full-service veterinary hospital. We still have to pay for that X-Ray machine, continuing education for doctors and staff, surgical instruments, emergency drugs and equipment, ECG, blood pressure, and other diagnostic equipment.

As a rule, we now charge more for our medical and surgical services (although I submit that an $800 fracture repair is a bargain when you consider the cost at a human hospital), and less for vaccines and medicine. It is actually a more logical business model, but it's a little scary for clients who don't have an extra stash saved up for emergencies. (I'm hoping that more of you will purchase Pet Health Insurance, but that's for another blog!)

There are some other things to consider. Numerous state pharmacy boards have found internet pharmacies guilty of selling veterinary drugs illegally. The EPA has fined a major internet pharmacy $100,000 for selling Australian products (that look like US products) to US pet-owners. Most heartworm products are guaranteed by the manufacturer only if purchased from a veterinarian. Unlike products purchased from your vet, drugs sold through over-the-counter channels are not monitored or regulated by any federal or state agencies like the Board of Veterinary Examiners. These medications may have been stored in an unregulated warehouse for an extended period of time.

Lastly, these pharmacies don't care squat about your pets. If there's a problem, you are on your own. Veterinarians stand firmly behind what we sell, and many of us are available for your pets 24/7. Internet veterinary pharmacies make HUGE profits, and that's all they're about. Hopefully most of us in private practice are motivated by something more meaningful.

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