We buy veterinary-only products! Limited time offer ...
YOU CAN MAKE OVER $5,000 IN MINUTES .... HERE'S HOW
That's an exact quote from the legal-sized letter I received in the mail earlier this week.
Underlined in flaming red caps, and highlighted in yellow for good measure, there was no mistaking the offer: This company buys so-called "vet-only" products from veterinarians so they can re-sell them to third parties (read: 1-800-You-Know-Who-We-Are and its ilk).
Let me explain: The big name pet product companies of all stripes (very few are exempt from this critique) have always marketed their products to veterinarians via this simple relationship: If you recommend our product over all others we promise to only sell them through you so that you can reap the benefits as a big thank you. In fact, we promise to never sell our products through non-professional retail establishments.
Fast forward twenty years and most companies are still saying that. They're still telling veterinarians and pet owners that these products should be bought and sold only through a veterinarian to control their proper use. Meanwhile, they're selling these products in bulk through less-than-transparent veterinary channels so that any old retailer can carry the stuff. The double sided mouth trick, you know?
"Veterinarian mules," I call 'em. And they do get a nice deal out of it.
All a veterinarian has to do is place a bulk order for the products. In this case, it's at least $37,121.52. The "vet supply" company then pays C.O.D for the order when it arrives so that no cash outlay is needed on the part of the individual vet doing the ordering. When the stuff shows up the company arrives to haul it all away and leave the vet a nice check. In the end, $5,511.28 is what the company claims the vet profits for all his/her hard work.
It's a simple transaction, really. Along the way the veterinarian also gets lots of bonus bucks in the form of "Brand Name Product Promotional Rebates" and "Brand Name Product Advertising Funds." In other words, it should be abundantly clear to the manufacturer of said-brand-name-product that Dr. X is a VIP who buys in quantities far greater than any veterinary hospital is likely to reasonably consume.
Conclusion: The manufacturer knows the product is being "diverted" to third party retailers. This, regardless of the party line the drug reps are supposed to parrot every time a veterinarian asks about their policy (i.e., "We do not sell products to third party retailers. Rogue veterinarians do.").
"But wait," you might say. "If 'vet only' is just a marketing gimmick for expensive products, and I can get them for less somewhere else because some brave veterinarian is willing to get into bed with a gray market company, then doesn't s/he deserve a medal? Isn't the manufacturer simply doing the right thing for the consumer? Aren't veterinarians who oppose such free-market ideals a bunch of whiny losers?"
OK, so maybe you have a point somewhere in there. But let's just back up a second and let me make one thing clear: I do not believe veterinarians deserve special treatment over other retailers with respect to the vast majority of non-Rx products on the marketplace (this includes foods, btw). Gone are the days when the vet was the only game in town for your pet needs. This is something most of us understand.
Problem is, small animal veterinarians have gotten used to this revenue stream and have a hard time giving it up — especially in a tough economy, where we're being squeezed from all sorts of directions. This is one reason why vet hospital prices are going up on services — to make up for losses on product sales.
In the end it'll sort itself out. Veterinarians will eventually whine a whole lot less about loss of product income and pet owners will buy their products from whoever offers them the best perceived value. Meanwhile, manufacturers (hopefully) will not have to resort to the same back room tactics to get the broad distribution they so transparently seek.
You may ask, "If that's how you feel, then why cry foul over one more piece of junk mail?"
I'll tell you why: Because given the duplicitous way things currently stand, junk mail like this means the gray market for products and services is alive and well. And wherever there's a gray market … there's a heady stink of counterfeit products going amiss.
That, my friends, is why you should still look that "vet-only" gift horse in the mouth. While you may trust your source, and your product may be completely free of the taint, there's no telling what the current lack of transparency in this industry is doing for the millions of pets whose people don't necessarily know any better.
Makes sense, right? Or not … you decide.
Dr. Patty Khuly