'Gray markets' in veterinary medicine and 1-800-PetMeds (and its ilk)
(As you may well have noticed, my posting has become far less frequent than my typical. For that I heartily apologize--it seems that blogging does not work well on Royal Caribbean Cruise Line (just letting you know should you ever try it). I have been unable to upload my posts due to poor connection (the connection times out before I'm able to upload) and my trusty Mac is not supported.
Next week you'll be seeing posts in the double-digits but this week it's slim pickings until I can find another person with a PC and enough patience to survive the long upload.
For that reason, I've decided to re-schedule some of the most popular posts of the past until I can get back to my home base on dry land. Here's the first:)
Have you ever heard this term before? As in, not black, not white…but gray. Somewhere between the legal and the illicit market lies this amorphous zone of unease we call the “gray market.”
Vets have become all-too familiar with this term since online pharmacies began taking “vet-only” product sales out of our hands. These are the “gray” products—the supposedly “vet-only” items that have somehow managed to end up in the hands of these online retailers.
Merial, Novartis and Pfizer won’t sell their Heartgard, Frontline and Revolution directly to the likes of 1-800-PetMeds. They don’t want to be seen by vets as the bad guys who help others take the retail business out of veterinary hands. So where are online pharmacies getting these products if the manufacturers claim they aren’t selling them to non-vets?
The gray market for these products exists when some vets sell their surplus products back to online pharmacies or when third-party companies in other countries (less regulated than we are here) do the same. It’s technically not illegal, since the vet-only pharmaceuticals don’t have the same regulations as human meds and products.
The Merials and Pfizers of this world decry the gray market that allows these products to get re-routed to a third party retailer like PetMeds. And to show us how much they dislike this practice they stand up for their vets by refusing to stand by their products when sold through third parties.
But think about it: Isn’t it convenient for Pfizer to sell Revolution in a wider marketplace while shirking any legal responsibility for its safety or efficacy once it hits the gray market? It’s more profitable. It keeps vets happy. And so it’s brilliant!
Just because I’m critical of the whole industry doesn’t mean I wouldn’t buy from companies like this. In fact, I’ve ordered from PetMeds and I respect the science behind Pfizer’s products. What I object to is the marketing strategy shell-game that goes on behind the products that keep our pets healthy. The hypocrisy is not just odious on principle, its opacity hurts everyone but the big guys who know how to play the Goldilocks game—that is, they’ve got their moves down just right.
I started thinking about all this after I mentioned in my VetCentric post’s comments that it’s illegal for a vet to refuse scripts for products. And, so you know, that’s true for all states. There’s a Federal law that prohibits any medical provider from not offering a choice. Here’s a pharmacist’s explanation (as it appeared on the Veterinary Information Network):
There is trade law that applies (Robinson-Patman Act). No state specific law is required.
Under a menu driven business model (which is the traditional manner of veterinary practice) clients have the legal right to get their prescriptions filled at the source of their choice. If you interfere with that right you have committed a Robinson-Patman (Federal trade law) violation.
For guidance contact the Federal Trade Commission and talk to someone in the antitrust division who is knowledgeable about Robinson-Patman. Be prepared for a long conversation. Last time I talked with FTC it was a 5-hour long-distance phone call (on their dime). Unfortunately they sometimes don't get it right, either. I had to point out errors to the "expert" I was talking to - and she later called back to say that I was right.
I expect that PetMed is fully aware of the implications of Robinson-Patman. For a while they seemed to be gathering data about veterinarians' refusal to issue prescriptions. They can also afford to spend the dollars on the lawyers in private practice who will become experts in this area of law before they remove your skin.
-Doug Kemp, Pharm.D.
During the course of my research, I also read about a significant percentage of vets (including a well-respected vet in my area) who explain that they won’t write scripts for vet-only products if the retailers and manufacturers won’t stand by them. They claim (although there’s no precedent for this) that this scenario makes them liable for any issues a client might have with these pharmaceuticals. So they won’t write scripts. Period.
Under these conditions I can understand a vet who says ‘no’ to vet-only drugs—but antibiotics? Thyroid meds? Vitamins?? There’s no excuse for denying a non vet-only script according to Federal law. That seems pretty clear.
But now that I’ve heard the argument against gray market scripts I’ve got to wonder: Am I liable for my indiscriminate scripting of vet-only meds? Do I need to inform my clients before scripting? Should I include a caveat on all these scripts? What’s my legal position here? Does the Federal law protect us if we script out gray market vet-only meds? Are we breaking the law if we don’t?
I wouldn’t be so concerned for my own scripting except I’ve heard confirmed reports of PetMeds and others sourcing their products from overseas. I’ve heard tell of expiration date counterfeiting and expired product sales. It’s enough to make any legally nervous vet a nervous wreck. What if I’m hurting my patients with these drugs? What if some of the “flea and tick resistance” I’m seeing is because my clients are using expired or counterfeit drugs? How would I know?
I know that sounds alarmist but this is a relatively new concept for me. I don’t know what the answer is but I do know that vets are between a rock and a hard place on this one, convenient though that may seem to the yellow-eyed among us.
I do know, however, that VetCentric (the subject of the post that spawned this revelation) sells only on behalf of vets. This gives them the ability to buy vet-only drugs with impunity. But the PetMeds thing? I’m looking into it. I’ll let you know when I have more answers. In the meantime, I’ll rely on you to fork ‘em over if you’ve got ‘em.