Submission Number: 560891-00205
Received: 8/29/2012 8:04:50 PM
Commenter: John Maddigan
Organization: Willamette Valley Animal Hospital
Agency: Federal Trade Commission
Initiative: Request for Comments and Announcement of Workshop on Pet Medications Issues, Project No. P121201
Attachments: No Attachments
I believe the commission should look very broadly at the intent of HR1406. Prima facie the intent of the act is to save pet owners money when filing prescriptions for their pets. While on this surface this sounds wonderful, we must critically look at the intent of the law, what is currently happening in the marketplace, and attempt to understand what will happen if the law is enacted.
From my perspective as a practice owner with an MBA, the marketplace is working well. Under current conditions veterinarians are required, and do, fill prescription requests from online pharmacies such as 1-800PetMeds daily. No fees are usually charged and medications are filled. The arrival of online competitors such as 1-800PetMeds was a shock to the veterinary marketplace, but as time has gone on veterinarians learned to either compete or simply give up prescribing medications in-house. Over the last few years 1-800PetMeds has stopped growing and are now in decline because veterinarians are now more competitive and there are many more competitors in the marketplace – the free market is working, clearly showing that no legislation is needed for consumers to be treated fairly. The current market situation clearly indicates that the margins on pharmaceutical products are dropping for veterinarians (while the costs continue to rise) and consumers are benefiting, regardless of where they are purchasing their pet’s medications. This bill is intended as a solution for a problem that existed 5 years ago but today does not reflect the current competitive situation for veterinary prescriptions.
What I can tell you is that if the bill is enacted it will have exactly the opposite result of its intent – to lower the OVERALL cost of veterinary medicine (including the costs of veterinary services and the medications prescribed) for pet owners because the Law of Unintended Consequences will prevail. Veterinary economics are currently under great pressure and the loss of revenue from pharmacy sales will either result in the closure of many vet hospitals around the country or result in higher prices for all services to compensate for the loss of pharmacy revenue. Because of the dire economic circumstances for veterinarians, they will be forced to raise service prices to compensate for this loss of revenue. Another reality is the if the bill passes, veterinarians will insist on a complete physical examination before any script is refilled (this is not the case currently for many refills) which will many times over, more than offset the loss of revenue from the prescription but will further limit access to veterinary medicine and the volume of prescriptions filled. In addition, instead of scripting inexpensive drugs like Clavamox , veterinarians will insist on much more expensive substitutes like Convenia, an injection that can only be administered by a veterinarian; yet another “unintended consequence” of this bill.
Sadly, the enactment of this bill will force veterinarians to act exactly as big banks have when faced with limitations on certain fees, other fees will rise to compensate for the loss. Pet owners will likely be worse off financially because the total cost of veterinary medicine will rise; the veterinary community will extract more for services and the big box stores will exact some on each prescription – an economist might call this a dead weight loss, others might call it an externality. Either way the pet owner will not benefit if the bill is enacted. Pet owners will save a little on some prescriptions, but pay markedly more to get that prescription filled. As Justice Potter Stevens concluded in the 1964 landmark case on a pornography, I am unable to provide a precise definition of pornography, but I know it when I see it. While the intent of this law is admirable, it has been overtaken by events in the competitive marketplace and one can no longer “see it” as fairness to pet owners, quite to the contrary in fact.
Willamette Valley Animal Hospital