Prescription and OTC Pet Medications in the United States
Americans' interest in keeping our pets healthy has caught the attention of an important constituent – the investment community. As a result, the market for pet medications in the U.S. is experiencing considerable activity as companies such as Pfizer, Novartis, Artana, and others engage in a barrage of mergers, acquisitions, spin offs, and start ups that are shaping and reshaping the pet industry.
Patent expirations, such as the expiration of longtime flea and tick leader Frontline’s active ingredient fipronil, has big name companies facing intense competition in areas they once almost exclusively dominated. Several other fipronil products have made headway, stealing away Frontline’s market share. Meanwhile other flea/tick treatments are emerging, such as Bayer’s new flea collar Seresto, Elanco’s Trifexis, and Merial’s new answer to its Frontline erosion – NexGard.
All of this activity has piqued the interest of retailers. Previously, pet medications have long been the domain of veterinary clinics. While this is still undoubtedly the most important channel, brick-and-mortar retailers and online retailers have gained ground.
Scope and Methodology
Prescription and OTC Pet Medications in the United States analyzes the market for prescription and over-the-counter medications for dogs and cats, with a particular focus on brand-name products used by consumers and on antiparasitics. Areas covered include parasite prevention and control pain management (focusing on non-steroidal anti-inflammatory drugs), (flea, tick, heartworm, etc.), cognitive dysfunction, heart health, behavioral health, overweight/obesity, ear care and allergies. The report provides in-depth coverage of competitive trends, new product trends and marketing activity, and draws on insights from other reports in Packaged Facts’ extensive Pet Market Collection. Statistics provided include historical and projected market revenues, along with demographics and psychographics of pet med purchasers, based on data from sources including Simmons and Packaged Facts own pet owner surveys
Market Insights: A Selection From The Report
Channels Continue Diversification
Every year, several new retailers jump onto the pet med bandwagon. The range of channels carrying pet medications has broadened considerably, and the shift away from the dominant veterinary channel is ongoing. Veterinarians have an inherent advantage in that they are the most trusted source of pet health information, with a built-in base of potential pet medications customers. For certain types of prescription medications, moreover, they are at times the only source. Demonstrating this clout, veterinarians still garner more than half of sales of pet medications, with retail channels at more than a quarter (combining pet specialty and mass-market), and Internet/mail order at slightly less than 15%. According to Packaged Facts’ May-June 2013 Pet Owner Survey, veterinarians are the outlet of choice for more than three-fourths of purchasers of heartworm medications, which are sold by prescription only, and for almost half of purchasers of flea/tick spot-ons, most of which are nonprescription.
Packaged Facts believes that pet medications will be one of the highest growth areas of pet retailing during the next decade, as more ethical and prescription products migrate to OTC, and channels that have long made a big business out of selling human medications increasingly tap in on the companion animal side. In other words, the days of veterinarians having a virtual monopoly on sales of pet medications are a thing of the past, with the days of pet medication distribution increasingly paralleling that of human medications. Leading the shift of pet medications into additional channels are flea/tick spot-ons, whose sales are already weighted outside the veterinary channel.
U.S. Pet Medications at $8 Billion
U.S. retail sales of pet medications reached $8 billion in 2013, including sales through veterinarians, brick-and-mortar retailers, and online. This figure reflects a 2% increase over 2012 sales and a compound annual growth rate (CAGR) of 7% during the 2009-2013 period, according to Prescription and OTC Pet Medications in the United States, a report by market research publisher Packaged Facts.
Growth in the overall pet medication category is attributable to the strength of several new product introductions, the return of Novartis products to the market (following the closure in 2012 of its Lincoln, NE plant), as well as continued strength of non-flea & tick drugs in the veterinary channel. By animal type, dogs accounted for the lion's share of pet medication sales, at 77%, with cats representing the remainder.
Most marketers of pet medications in the U.S. slot into two groups: global pharmaceutical companies operating through animal health divisions and selling mainly through the veterinary channel, such as Merial; and pet product marketers selling through retail channels, including broad-line marketers like Central Garden & Pet and smaller companies focusing on over-the-counter pet health products. With the recent and ongoing cross-over into retail of formerly vet-only brands like Bayer's Advantage and K9 Advantix, the pharmaceutical/veterinary vs. pet product/retail distinction is blurring, however. For many companies, antiparasitics are a key part of the pet medications portfolio, with flea/tick products representing their best-known consumer brands.
Looking to the future, Packaged Facts projects that pet medications sales will experience healthy returns through 2018. The market will grow from its 2013 level to more than $10 billion in 2018, reflecting a CAGR of 5%. As always, the biggest wildcard will be the weather for flea and tick sales. But as new products emerge in the coming years, the industry should be poised for healthy growth, notes Packaged Facts research director David Sprinkle.
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About Packaged Facts -- Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, consumer financial products and services, consumer goods and retailing, consumer packaged goods, and pet products and services. Packaged Facts also offers a full range of custom research services. To learn more, visit: www.packagedfacts.com. Follow us on Facebook, LinkedIn, Twitter, and Google+.
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