Internet Drug Sales for Veterinarians: Combat or Cooperate?

Many veterinarians feel like their bottoms lines are under attack when forced to write prescriptions for drugs stocked in their practices.
Author:
Publish date:
computer woman

More and more horse owners are buying drugs online and ask veterinarians to write a prescription.

It is likely that part of each day in the life of an equine practitioner involves faxing in a prescription to an online pharmacy or animal health supply outlet to accommodate a client’s request. Consumers now have the ability to compare the prices of drugs from online pharmacies with those set by their local veterinarians. Maintaining horses is expensive, which motivates clients to become savvy about how to save money. It is common for a horse owner to ask the vet for a prescription to buy medication elsewhere.

Prescription writing might be an irritating chore for practitioners who stock those same medications on their shelves. It doesn’t help to be resentful that an internet drug company is making a profit while providing a prescription takes time out of your day and necessitates the additional effort of documenting the horse’s medical record.

One equine practitioner offers a practical philosophy on how working with internet drug companies on behalf of your clients could be a plus in your practice. “Veterinarians put themselves in a conflict of interest situation whenever they prescribe and then sell medication,” said Mark Baus, DVM, of Grand Prix Equine in Connecticut. “Many, if not most, horse owners seem to understand this—and thankfully trust their veterinarians enough to purchase medications from them anyway.”

He offered an important piece of advice: “Ideally, I would like to see veterinarians make their living off of diagnosing and prescribing, while leaving the selling of medications to pharmacies. The human medicine model, which supports the role of the pharmacist much better than in the veterinary world, is the best option.”

Are Internet Drug Companies Trustworthy?

In most cases, the responsibility for selecting a pharmacy is the client’s and not the vet’s. “The best advice I give clients is to select a reputable pharmacy and to not make this decision based solely on the cost of individual medications,” stated Baus. “Many pharmacies have ‘price-matching’ policies that make it more attractive for their clients to use them as their default pharmacy.”

He pointed out that once a horse owner has a good experience with a pharmacy, that person is likely to continue ordering from the company over time.

There are means to determine the legitimacy of an internet drug company. Baus suggested, “The best way to check is to contact the state pharmacy board in the state in which the drug is being sold, and to also check with the Better Business Bureau (bbb.org). It is also often possible to find consumer feedback available online.”

Each internet company needs to be registered with the state in which it is selling and must have approval from each state to which it ships drugs. “The principal role of the internet drug company is as a pharmacist,” said Baus. “As such, their responsibility is to prepare and dispense drugs. Since the FDA does not oversee pharmacy activities, the governing body for pharmacies rests with the laws of each state.”

There are always concerns about fraudulent activities when medications are ordered from avenues over which a veterinarian has little control. Baus noted, “If any company is fulfilling a veterinarian’s prescription fraudulently, the consequences with the state pharmacy licensing board would be significant. I recommend selecting a pharmacy based on a combination of reputation, service and cost.”

In addition, Baus said that a horse owner should be able to ask his or her veterinarian about the choice of an internet pharmacy without feeling pressure to purchase from the veterinarian. “When they ask for a prescription, I do not, as a rule, offer to sell my clients the medication for a lower cost unless they ask me,” he explained.

Vaccine Sales

“It is possible that, historically, veterinarians have overcharged for inoculations and not enough for examinations,” stated Baus. “This motivates horse owners to seek out less-expensive options for obtaining immunizations. The USDA controls animal biologics, not the FDA. In many states, the only vaccination that is controlled is rabies. Although most of my clients are not inclined to purchase their own vaccines, they are readily available at animal health outlets and feed stores,” he said.

A veterinarian can play a huge role in educating clients on the necessity of handling vaccine products appropriately from manufacturer to horse. Often owners don’t realize the importance of consistent refrigeration—not letting the vaccines get too hot or too cold.

“Clients should have concerns about shipping vaccines in regard to proper chilling in transit,” cautioned Baus. “If a horse owner orders their vaccine online and it arrives un-chilled, it is their responsibility to bring this to the attention of the pharmacy before injecting it into their horse. If they don’t value their veterinarian and are motivated primarily by cost, the complications are their responsibility more than anyone else’s. Also, if they do have a complication or failure of the vaccine, it is more likely as a result of their own handling and not the shipping process.”

Those clients who have concerns about maintaining product efficacy through shipping and storage will be more likely to use their veterinarians to immunize their horses rather than purchasing vaccine elsewhere and trying to do it themselves.

Outdated Products

Horse owners might unknowingly obtain outdated medications through any outlet, including internet sales and veterinarians.

Providing written prescriptions to clients is one way of minimizing how much stock has to be kept on the shelf, which translates to money tied up in inventory. Limiting inventory also reduces the amount of oversight needed to track outdating of medications, or to monitor temperature extremes often experienced with products kept in veterinary vehicles.

Shrinkage and Margin

There are other practical arguments in favor of writing prescriptions to an internet drug company that make it better for the veterinarian to stock a smaller pharmacy: shrinkage and margin.

“Shrinkage occurs whenever a medication is purchased by the vet and not paid for by a client,” explained Baus. “This happens when an employee or client steals medication, when the vet forgets to bill for it, when medication outdates, or when the client is late to pay—or does not pay—their bill.”

While he noted that shrinkage is enormous in the veterinary pharmacy world, he added that it might be even more so in an equine ambulatory veterinary practice.

In actuality, a veterinarian—particularly a practitioner who might be solo or within a very small group practice— can’t always compete with the high-volume purchasing price points received by online pharmacies. As Baus commented, “Each equine practice is slightly different in terms of their clients’ needs. It is possible for equine practices to successfully compete with internet pharmacies, but it requires careful inventory control. Larger equine practices are usually able to purchase medications in a quantity that allows them to compete with outside pharmacies.”

For smaller practices, it is more practical to keep inventory as limited as possible.

Another key factor in favor of prescription writing is based on dwindling profit margins for medication. Baus commented, “Before catalogue or internet pharmacies were active, equine practices could mark up medications 100% or more. As it is now, our clients can easily find out what other practices and pharmacies charge for highly shopped items, making it difficult to justify a profitable markup for stocking and selling expensive drugs.”

Baus added another pertinent point: “When our clients see that their equine vet is charging significantly more for any medication, they are likely to also question fees for examination and other valuable diagnostic expenses. A client might wonder, ‘If my vet is ripping me off on medication, she/he must also be overcharging for a lameness exam.’ ”

Baus urged, “Charging a competitive price for medication dispensed, or instead writing prescriptions, builds credibility into the entire fee structure for the practice.”

Create Your Own Online Pharmacy

Some equine veterinarians have found success in working with companies that set up individual veterinary businesses with their own online pharmacies (such as Vets First Choice).

The veterinarian sets the prices (within certain parameters), but the company sets up the internet pharmacy website for that veterinary practice and handles all of the back-end and front-end inventory, shipping and billing.

That company will take a percentage of the profits from the veterinary practice’s sales, but the veterinary practice does not have to stock inventory, create a website or lose business to some other online pharmacy.

Take-Home Message

“If a favorable outcome is the successful treatment for a properly diagnosed case, then writing a prescription for an internet pharmacy will be favorable for all parties,” stressed Baus.

“In contrast, if a favorable outcome is based on the profit margin of medication sales, it is unlikely that an equine practice will compete successfully with an internet company,” he said.

“However, by writing prescriptions for outside pharmacy sales, an equine practitioner can generate goodwill, which is ultimately more valuable,” Baus said.

The bottom line: The best way to maintain good client relations is to provide great service at all levels, whether through your own online pharmacy or by writing prescriptions for clients.