Earlier this week, the BBC’s “Watchdog” ran a programme on the costs of veterinary medicines. This is a perennial favourite (some readers may remember the Marsh / Competition Commission reports from the early 2000s where they concluded that there was a “complex monopoly” on veterinary medicines). The conclusion many viewers drew from the way the programme was presented was that vets were ripping off their customers by over-charging for medicines. I’m in the unusual situation of having worked in veterinary practice, but also having run a small online dispensary, and I think there are several issues we need to look at here. There definitely are significant differences in pricing strategies between different veterinary practices and companies, and it’s worth exploring why this is.
What did the programme find?
That (shock, horror!) it’s cheaper to buy many medications online, rather than through the vets. (Just out of interest, I wonder if Watchdog is next proposing to do a shock expose of how high street retailers are ripping customers off because you can buy most things more cheaply on Amazon… but probably not.)
Are vets ripping off animal owners?
To be completely honest, a few probably are. However, this is the exception not the rule – veterinary practices are very, very expensive to run, and ultimately there’s no NHS for pets. Apart from anything else, all veterinary practices are required by law to have a large notice displayed informing clients that they can always request a written prescription to buy any medications they need elsewhere. I don’t know of any practices that don’t have these posters up (sometimes very large and prominent) – unfortunately, for many clients they become the “background wallpaper” of the practice.
Why do vets charge more?
As I’ve said above, practices are expensive to run. The premises often attract premium business rates; the equipment we need to work is expensive and needs regular servicing, maintenance and often replacement; and there are a lot of regulations regarding health and safety, radiation protection, medicine storage and so on that, while necessary, are also expensive to comply with. Then of course there are staff costs – contrary to popular opinion, vets are not especially well paid as professionals; surveys suggest that most vets start at about £30,000 (which is a good wage, although I’ve never worked in a practice that paid a new graduate that much!), but salary for employed vets (which is the vast majority of us) averages about £43000 – good money, but when compared to the average salary of £115000 for doctors, not especially well paid. Veterinary nurses, meanwhile, are much worse off, with most of these highly trained professionals earning less than £20000. However, there are additional costs here to bear in mind as well – vets and nurses are obliged to continue in education (a minimum of 35 hours a year for vets, 15 for nurses), and this is also expensive, as is the legal obligation to either be open, or pay someone else to be open, 24/7 for emergencies.
Now, the funding for all this doesn’t come from the government, or in most cases charity. It comes from the fees animal owners pay, and historically, vets have used markups on medicines (usually a 1-200% markup, which is a LOT less than most high street chains!) to subsidise the business, keeping professional fees (consult charges etc) lower than they otherwise would be. As vet Robin Hargreaves said on the programme, ‘I could push people into getting online prescriptions but then I would have to put my fees up’. So, would you rather pay high medicine costs IF your pet needs the medication, or higher consult charges every time you see the vet? It’s an interesting question, isn’t it?!
Compared to this, an online pharmacy or dispensary has much, much lower overheads – they can operate from a warehouse (paying lower business rates!) and don’t have the same equipment costs, don’t need to provide an emergency service around the clock, and just need one dispensing vet or pharmacist on-site, everyone else can be low-paid workers (potentially on minimum-wage, zero-hours contracts if they want to save money). And this is assuming that you’re buying from a reputable legal business, not a warehouse in the far east selling cheap imitation products (the nightmare scenario for vets in practice, because it’s the vet who has to pick up the pieces when the animal doesn’t respond or is poisoned by the “medicine”).
The second complication is the cost of the drugs themselves. Most practices, even if they’re part of a larger corporate entity, are only buying relatively small quantities of drugs at a time – because the medicines have a limited shelf-life and they don’t want to risk being left with lots of expensive out-of-date drugs; plus they probably don’t have the cashflow to be able to purchase £100,000 worth of flea treatments in one go. However, as with most things, the best discounts come with bulk buying – and in many cases, the big online companies can buy the drugs in from the manufacturers a LOT cheaper than practices can. In fact, in some cases, medicines are being sold by the online pharmacies (including VAT) cheaper than vets in practice can buy them. (Sadly, it is illegal for vets to source drugs from another retailer – we’re only allowed to buy from wholesalers).
Which is better?
‘Price isn’t everything and you can’t beat the professional service that most vets provide’ (Judge Rinder). When you buy from the vets, you are getting an end-to-end service – as Robin pointed out, ‘There’s more to the service when I prescribe something for a client two weeks later they say I’m not quite sure whether its working, they are going to ring me and I will spend time supporting the product’. The online businesses can’t do that – not their legal obligation, and it doesn’t really fit into their business model.
On the other hand, they genuinely are cheaper – I buy most medicines for my own animals online – as long as you remember to factor in the prescription charge from the practice. Buying a prescription-only medicine without a prescription is in fact illegal, which does close the gap a little.
Is there a way forward?
Personally, I think vets usually charge too much for medicines, and too little for professional fees – we are constantly underselling ourselves. However, any change to pricing models (even to keep the same overall income for the practice) risks hitting the poorest owners the hardest. If you want to buy online, that’s absolutely fine – I would actually quite like to see a situation where vets move away from selling drugs, except those for immediate or emergency use, and make up the money instead from the prescription fee (prescribing is actually one of the most complicated and risky parts of a vet’s daily life). That way the pricing is at least transparent, and of course it’s also more similar to how our medical colleagues work – it also removes any bias in terms of what drugs we prescribe.
From the perspective of the animal owner, I have no problem with using online retailers. HOWEVER… make sure it’s a reputable company! The VMD (the UK veterinary medicines regulator) has a list of accredited retailers, those who abide by a code of conduct that is set well above the legal requirements. And do NOT buy from overseas, no matter how tempting the prices seem – it’s illegal, the drugs may not be what you expect, and may even be dangerous.