Prescription and OTC Pet Medications in the United States

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.

Press Release

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.

For more information on Prescription and OTC Pet Medications in the United States, please visit http://www.packagedfacts.com/redirect.asp?progid=86053&productid=8014984.

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+.

Chapter 1: Executive Summary
Scope and Methodology
Market Definition
Product Regulation
Report Methodology
Market Trends
Market Size & Composition
U.S. Retail Sales of Pet Medications at $7.6 Billion in 2013
Share of Sales by Distribution Channel
Figure 1-1: Share of U.S. Retail Sales of Pet Medications by Distribution Channel, 2013 (percent)
Market Outlook
Table 1-1: Projected U.S. Retail Sales of Pet Medications, 2013-2018 (in billions of dollars)
Competitive Overview
Two Groups of Marketers
Pharmaceutical/Veterinary Channel Marketers
Table 1-2: Global Pharmaceutical Marketers: Total Sales vs. Animal Health Sales, 2011-2012 (in millions of dollars)
Pet Product/Retail Marketers
Notable Deals
Pfizer Spins Off Animal Health Division
Perrigo Acquires Sergeant’s, Then Velcera
Bayer Acquires Teva Animal Health
Aratana Leads the Way for New Entrants
In the Works
Retail Trends
Channels Continue Diversification
Online Channel Expands
Target and Walmart Jump into Pet Prescriptions
74% of Dog or Cat Owners Use Flea/Tick Products
Majority Of Pet Owners Choose Spot-On Flea/Tick Medications
71% of Dog-Owning Households Use Heartworm Meds
Figure 1-2: Purchasing of Heartworm Medications by Channel, 2013 (percent of U.S. dog or cat owners)
Antibiotics Top List of Other Pet Medications
Attitudes on Veterinarian/Professional vs. Store Products
Table 1-3: Levels of Agreement with Statement, “I Trust the Pet Medications My Veterinarian Recommends”: Dog Owners vs. Cat Owners, 2013 (percent)
Chapter 2: Market Trends
Market Size & Composition
U.S. Retail Sales of Pet Medications at $7.6 Billion in 2013
Table 2-1: U.S. Retail Sales of Pet Medications, 2009-2013 (in billions of dollars)
Share of Sales by Animal Type
Figure 2-1: Share of U.S. Retail Sales of Pet Medications by Animal Type: Dog vs. Cat, 2013 (percent)
Share of Sales by Distribution Channel
Figure 2-2: Share of U.S. Retail Sales of Pet Medications by Distribution Channel, 2013 (percent)
Market Outlook
Many Positive Indicators
Human/Animal Bond Bolsters Pet Health/Wellness Spending
Table 2-2: Level of Veterinary Expenditures by Human-Animal Bond and Animal Type, 2011 (mean dollar per household)
Table 2-3: Mean Number of Veterinary Visits: By Human/Animal Bond Among Dog and Cat Households, 2011
Figure 2-3: Level of Agreement with Statement: “I buy pet supplements and/or functional treats to make doubly sure that my pet gets all the special nutrition it needs,” 2012 (percent)
Premium Demographics
Figure 2-4: $70K+ Household Share of U.S. Pet Market Expenditures: By Category, 2002 vs. 2012 (percent)
The Aging Pet Population
Table 2-4: Age of Dogs and Cats, 2014 (percent of pet owners)
Figure 2-5: Percentage of Dogs and Cats Age 6 and Over: 1987 vs. 2011 (percent)
Overweight and Obese Pets Keep Costs Up
Table 2-5: Percentage and Number of Overweight and Obese Dogs and Cats, 2012
Figure 2-6: Percent with an Overweight Pet: Dog vs. Cat Owners, 2014 (percent)
Global Pharmas Are Major Investors
Morris Animal Foundation Advances Veterinary Research
Pet Insurance Shows Double Digit Growth
Figure 2-7: Projected North American Pet Insurance Market Revenues: United States, Canada, and North America, 2013 vs. 2018 (in millions of U.S. dollars)
Cautiously Optimistic Consumers
Table 2-6: Selected U.S. Economic Measures: 2008-2013 (percent and number in millions)
Some Pet Owners Still Spending Less
Table 2-7: Level of Agreement with Statement: “I am spending less on pet products because of the economy,” 2010-2014 (percent)
Table 2-8: Economic Mood of U.S. Pet Households: 2009-2013 (percent)
Table 2-9: Economic Outlook of U.S. Pet Households: 2009-2013 (percent)
Overall Veterinary Visits Up, But Percentages Down
Dog Visits Up, But Fewer Dog Owners Visiting
Cat Visits Drop Some More
Efforts to Reverse Trend
Table 2-10: Percentage of Dog and Cat Owners Who Have Visited Vet in Past Year: Routine Checkup vs. Sick/Emergency Care, 2012 vs. 2014
Highly Competitive Flea/Tick Segment
Generics and Channel Competition
Competition from Holistic and Natural Treatments
Figure 2-8: U.S. Retail Sales of Pet Supplements and Nutraceutical Treats: Total, Small Animal (Dog, Cat, Other), Equine, 2008, 2012, 2017 (in millions of dollars)
Table 2-11: Use of Specialty Nutritional Formula Pet Food, Treats, and Pet Supplements: Dog Owners vs. Cat Owners, 2013 (percent)
Illustration 2-1: Hill’s Prescription Diet Metabolic Pet Food Line
Table 2-12: Level of Agreement with Statements “If Natural/Organic Pet Products Were More Affordable / More Available Where I Shop, I Would Buy Them More Often,” 2013 (percent of U.S. pet owners)
Looking Ahead
Projected Market Growth: Sales to Top $10 Billion in 2018
Table 2-13: Projected U.S. Retail Sales of Pet Medications, 2013-2018 (in billions of dollars)
Table 2-14: Economic Outlook of U.S. Pet Households: 2009-2013 (percent)
Chapter 3: The Marketers
Competitive Overview
Two Groups of Marketers
Ten Leading Pharmaceutical/Veterinary Channel Marketers
Table 3-1: Global Pharmaceutical Marketers: Total Sales vs. Animal Health Sales, 2011-2012 (in millions of dollars)
Table 3-2: Global Pharmaceutical Marketers by Dollar and Percentage Change in Global Sales: Total vs. Animal Health, 2011-2012 (in millions of dollars)
Pet Product/Retail Marketers
Notable Deals
Pfizer Spins Off Animal Health Division
Perrigo Acquires Sergeant’s, Then Velcera
Bayer Acquires Teva Animal Health
Unicharm Takes Stake in Sumimoto’s Hartz
Aratana Leads the Way For New Entrants
In the Works
Other Deals
Generic Pet Medications on the Rise
Generics Take on the Frontline Franchise
Putney Grows Its Pet Generics Portfolio
Illustration 3-1: Putney Inc. Screenshot
Focus on Antiparasitics
Frontline Still Leads in Flea/Tick Sales
Table 3-3: Marketer Shares of U.S. Retail Sales of Flea & Tick Spot-Ons, 2013 (percent)
The Blockbuster of Animal Health
At the Cliff
Bayer Goes Rogue
New Generation Advantage II and K9 Advantix II
Advantage a Top Consumer Brand at Bayer
Zoetis and Revolution
The Novartis Portfolio
Elanco Innovations
Virbac Launches Fipronil Topicals
Ceva Fuels Growth with Vectra
Fipronil Wars: The Saga
Merial vs. Velcera
HVG and Ceva vs. Merial
A New Era of Creative Destruction
Merial’s Silver Bullet
Illustration 3-2: Trade ad for Merial’s NexGard
Bayer Reinvents the Flea Collar
Illustration 3-3: New Seresto Collar from Bayer
Merck Unveils Bioactivation
Illustration 3-4: Trade Ad for Merck’s Activyl
Competitors Challenge Hartz in the Mass Tier
Table 3-4: IRI-tracked Sales of Pet Medications, 2013
Focus on Retail Flea/Tick Brands
Central Garden & Pet Down for the Year
Illustration 3-5: Adams Smart Shield
Retail Brands and Fipronil
Illustration 3-6: Hartz First Defense Topical for Cats Website
Sergeant’s Offers Array of Brands
Trends in Advertising and Promotion
Illustration 3-7: Screen shot of Bayer’s PetParents.com web site
Illustration 3-8: Seresto Reminder Service with Coupon
Bayer
Central Garden & Pet
Ceva Animal Health
Illustration 3-9: Screen Shot from Vectra Website
Elanco
Illustration 3-10: Trade ad for Elanco’s Trifexis promoting consumer awareness campaign
FidoPharm
Hartz
Merial
Illustration 3-11: Frontline Branding in Pet Rescue Saga
Sergeant’s
Zoetis
Focus on Heartworm Medications
Growing Industry Concerns about Heartworm Treatments
New Directions in Heartworm Testing and Treatment
Advertising and Promotion
Illustration 3-12: Screen shot for Merial’s JoinPowerOf12.com web site
Illustration 3-13: Trade ad for Virbac’s Iverhart Max
Broad Spectrum Wormers
Trends in Developing Market Segments
Cancer
New Competitive Dynamics
Brain Health
Illustration 3-14: Pfizer CDSinDogs.com Website
Emotional/Behavioral Health
Market Pioneer: Clomicalm
Illustration 3-15: Screen Shot of Clomicalm Website
Reconcile: Prozac for Pets
Illustration 3-16: Screen Shot: Virbac Anxitane
Illustration 3-17: Screen Shot: Feliway L.O.V.E. Bus
Pain Management: A New Frontier
Major Brands
Illustration 3-18: Banner Ad for Merial’s Previcox
Illustration 3-19: Screen Shot: Deramaxx Website
Illustration 3-20: Trade Ad for Abbott’s OroCAM Spray-and-Go Formula
Illustration 3-21: Screen Shot: Onsior Pain Relief for Cats
Alternative Pain Treatments
Illustration 3-22: Screen Shot: Canna-Pet website for Canna-Cat and Canna-Canine
Pet Obesity and Diabetes
Slentrol
Illustration 3-23: Screen Shot: Zoetis Slentrol
Diabetes Support
Illustration 3-24: Screen Shot: Vetsulin Website
Illustration 3-25: Screen Shot: ProZinc Website
Heart Health
Illustration 3-26: Trade Ad for Boehringer Ingelheim Vetmedica’s Vetmedin
Ear Infections
Illustration 3-27: Trade Ad for Virbac’s EasOtic
Allergy Treatments Bloom
Illustration 3-28: Screen Shot: The Itch Cycle
Retail/OTC Pet Medications
Alternative Treatment Options
Homeopathic Remedies
Ear Cleaning Products
Table 3-5a: Selected Leading Pharmaceutical Marketers and Brands of Pet Medications: Product Type and Generic Drug Name, 2013
Table 3-5b: Selected Leading Pharmaceutical Marketers and Brands of Pet Medications: Status, Form, Animal Type and Description, 2013
Table 3-6: Selected Leading Retail Marketers and Brands of Pet Medications, 2013
Chapter 4: Retail Trends
Modern Consumers Challenge Distribution Structure
Channels Continue Diversification
Pethealth Tracks Channel Choices Among Pet Adopters
Online Channel Expands
Illustration 4-1: FetchRx’s LivingSocial Promotion
Vet-VIPPS Participation Grows
Companies Create Online Pharmacies for Veterinary Practices
Illustration 4-2: Vets First Choice Home Page
PetMed Express Slumping, But Analysts Optimistic
Table 4-1: PetMed Express Sales, 2007-2013 (in millions of dollars)
Table 4-2: Share of PetMed Express Sales by Category: 2007, 2009, 2011, 2013 (percent)
Veterinarians Confront PetMed Express
Illustration 4-3: 1800PetMeds.com TV Commercial
Amazon’s Wag.com Takes On PetMed Express
Illustration 4-4: Wag.com’s Pet Medications home page
Target Emphasizes Pets
Illustration 4-5: PetRx on Target’s website
Pet Meds at Walmart
Other Mass Retailers Join the Party
Illustration 4-6: Pet Department Endcap in Walgreens— “Pet Meds Covered”
Illustration 4-7: Pet Medications on Walgreens.com
Fairness to Pet Owners Act Dies, For Now
Flea & Tick Category Explodes in Pet Specialty Channel
Pet Specialty Online
Pet Specialty Eyeing Prescription Meds
Illustration 4-8: PetSmart.com’s Pet Pharmacy
Supplements at Specialty Retail
Illustration 4-9: GNC Pet Multivitamin Plus
Illustration 4-10: Petco Brewer’s Yeast & Garlic Tablets
Table 4-3: Selected Leading Third-Party E-tailers of Pet Medications, 2013
Chapter 5: Consumer Trends
Pet Medication Purchasing Patterns
74% of Dog or Cat Owners Use Flea/Tick Products
Table 5-1: Percent of Dog or Cat Owners Who Purchase Flea & Tick Care Medications or Medicated Products, 2010-2013 (U.S. dog- or cat-owning households in thousands)
Majority Of Pet Owners Choose Spot-On Flea/Tick Medications
Figure 5-1: Purchasing of Flea & Tick Care Medications: Share by Product Type, 2013 (percent of U.S. dog or cat owners)
Figure 5-2: Purchasing of Spot-On Flea & Tick Care Medications by Channel, 2013 (U.S. dog or cat owners)
Frontline Draws Almost Half of Spot-On Purchasers
Table 5-2: Share of Spot-On Flea & Tick Care Medication Purchasers by Brand, 2013 (U.S. dog or cat owners)
Natural Flea & Tick Product Usage
Demographics for Flea & Tick Brands
Table 5-3a: Index for Use of Flea/Tick Products by Brand, 2013 (U.S. dog- or cat-owning households)
Table 5-3b: Index for Use of Flea/Tick Products by Brand, 2013 (U.S. dog- or cat-owning households)
Sentinel Draws 38% of Oral Flea/Tick Medication Purchasers
Figure 5-3 Share of Oral Flea & Tick Care Medication Purchasers by Brand, 2013 (percent of U.S. dog or cat owners)
71% of Dog-Owning Households Use Heartworm Meds
Table 5-4: Index for Use of Heartworm Control Medications for Dogs, 2013
Figure 5-4: Purchasing of Heartworm Medications by Channel, 2013 (percent of U.S. dog or cat owners)
Heartgard Draws Half of Heartworm Medication Purchasers
Figure 5-5: Share of Heartworm Control Medication Purchasers by Brand, 2013 (percent of U.S. dog or cat owners)
Antibiotics Top List of Other Pet Medications
Table 5-5: Use by Type of Selected Other Pet Medications for Dogs and Cats, 2013 (percent)
Table 5-6: Purchasing by Channel of Selected Other Pet Medications for Dogs, 2013 (percent)
Table 5-7: Purchasing by Channel of Selected Other Pet Medications for Cats, 2013 (percent)
For Spot-On Flea/Tick, Pet Superstores and Mass Retailers Lead Brick & Mortar Retailers
Table 5-8: Purchasing of Spot-on Flea/Tick Care Medications by Retail Store or Channel: Dog Owners, 2013 (percent)
Amazon Shows Highest Online Draw
Table 5-9: Purchasing of Dog and Cat Medications by Online Source, 2013 (percent)
Benadryl Is Human OTC Med Most Commonly Used for Pets
Pet Med Psychographics
No General Trend Toward Increased Use of Pet Meds
Table 5-10: Levels of Agreement/Disagreement with Statement, “I Am Buying More Pet Medications Than I Used To”: Dog Owners vs. Cat Owners, 2013 (percent)
Table 5-11: Levels of Agreement/Disagreement with Statement “The Current Range of Pet Medications Is Not Adequate”: Dog Owners vs. Cat Owners, 2013 (percent)
Table 5-12: Levels of Agreement/Disagreement with Statement, “I Am Interested in New Types of Pet Medications”: Dog Owners vs. Cat Owners, 2013 (percent)
Age- and Weight-Related Triggers for Pet Meds
Table 5-13: Levels of Agreement/Disagreement with Statement, “Age-Related Conditions Are the Cause of Some of the Pet
Medications That I Buy”: Dog Owners vs. Cat Owners, 2013 (percent)
Table 5-14: Levels of Agreement/Disagreement with Statement, “Weight/Obesity-Related Conditions Are the Cause of Some of the Pet Medications That I Buy”: Dog Owners vs. Cat Owners, 2013 (percent)
Attitudes on Veterinarian/Professional vs. Store Products
Table 5-15: Levels of Agreement/Disagreement with Statement, “I Trust the Pet Medications My Veterinarian Recommends”: Dog Owners vs. Cat Owners, 2013 (percent)
Table 5-16: Levels of Agreement/Disagreement with Statement, “I Trust the Pet Medications Available at the Stores Where I Buy Pet Products”: Dog Owners vs. Cat Owners, 2013 (percent)
Table 5-17: Levels of Agreement/Disagreement with Statement, “With Spot-On (Topical) Flea/Tick Products, the Products Available in Stores Are Just as Effective as Those Available Through Veterinarians”: Dog Owners vs. Cat Owners, 2013 (percent)
Table 5-18: Levels of Agreement/Disagreement with Statement, “With Spot-On (Topical) Flea/Tick Products, I Would Trust Generic or Store-Brand Products if They Contained the Same Active Ingredients”: Dog Owners vs. Cat Owners, 2013 (percent)
Table 5-19: Levels of Agreement/Disagreement with Statement, “Veterinarian-Dispensed Spot-On (Topical) Flea/Tick Products Are Too Expensive”: Dog Owners vs. Cat Owners, 2013 (percent)
Resistance and Alternatives to Pet Meds
Table 5-20: Levels of Agreement/Disagreement with Statement, “I Avoid Using Pet Medications as Much as Possible”: Dog Owners vs. Cat Owners, 2013 (percent)
Table 5-21: Levels of Agreement/Disagreement with Statement, “I Prefer to Try Holistic/Natural Pet Treatments Including Nutritional Supplements Before Resorting to Pet Medications”: Dog Owners vs. Cat Owners, 2013 (percent)
Table 5-22: Levels of Agreement/Disagreement with Statement, “High-Quality Pet Foods Are Effective as a Preventive Pet Health Treatment”: Dog Owners vs. Cat Owners, 2013 (percent)

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