3 Ways to Boost Veterinary Pharmacy Revenue

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Quick Facts: 

  • The veterinary compounding market is expected to increase from US$ 1.1 Bn in 2020 to over US$ 2.7 Bn by 2031, expanding at a CAGR of around 8.5%
  • CNS agents and anti-infective agents show the most lucrative market opportunity
  • 2/3 of the market share will come from oral formulations 

Source: Persistence Market Research

  • Pet healthcare accounts for about 30% of the $100 billion-plus pet industry (American Pet Products Association)
  • Animal medication sales, including over-the-counter and prescription, added up to roughly $10.8 billion in 2020 (Packaged Facts)
  • Pet medication sales have grown at a healthy CAGR of 9% since 2017 (Packaged Facts)
  •  

Veterinary practices are unique in that they can sell medications directly to their clients, which provides an important revenue stream for the business. However, retail stores and online pharmacies have stolen a lot of market share, especially during the pandemic. An article in Veterinary Practice News claims that one “online pet retailer added more than five million customers during 2020 and net sales grew 45 percent.”

These online retailers not only pose a threat to veterinary practices’ revenue, but they also create challenges in regulating quality animal healthcare standards. Most U.S. states require veterinarians to issue prescriptions to clients upon request, allowing the client to fill the prescription at the pharmacy of their choosing. Clients who used to depend on the vet for prescriptions now have more freedom, but veterinarians continue experiencing lost revenue from what used to be a high-value revenue stream with large margins.

So how can veterinary clinics regain market share in pet pharmaceuticals and ensure the best quality of care for patients? Vet hospitals and clinics have to adapt to retain pharmacy revenue, but they can still be competitive, and in the process, increase client loyalty.

Explore how these three approaches can help your practice:

1. Elevate Your Veterinary Pharmacy

Use the 80/20 rule to identify in-demand commercial and compounded drugs and keep those in stock. Consider limiting the pharmaceuticals you carry to those that serve your clientele the best, and most often. Carrying multiple versions of similar items is expensive, especially flea and tick preventives which are more of a commodity. Stand out from the mass retailers and refocus your offerings on the highest quality, in-demand medications.

When stocking medications, pay close attention to shelf life. When ordering compounded medications, keep in mind that 503B manufactured products have a shelf-life range of months to years, without compromising quality. Medications from 503A pharmacies with beyond-use dates (BUDs) have small usage windows – as little as 12 hours for sterile products – which can create a lot of waste. Stocking niche medications is another way to differentiate and increase revenue.

2. Take Control with Online Ordering

Today’s pet owners value convenience and expect online ordering, automatic refill reminders, and home delivery. Relying on clients to remember prescription refills, without calling the clinic in a panic, is not a sound business model. Avoid the hassle and provide the service your clients expect by setting up an online ordering system. Use the system to send reminders about required lab tests and blood work – this simple activity can remove barriers to prescription refills.

Explore more tips for improved inventory management processes – for both your practice and your clients!

inventory-management-guide

3. Stock 503B Manufactured Drugs to Maximize Profits

When a commercially available drug is not available and you look for a compounded medication to fill this need, consider stocking manufactured drugs from a 503B outsourcing facility before purchasing from a 503A compounding pharmacy. 503B manufacturers adhere to FDA guidelines and meet strict quality regulations regarding sterility, stability, and potency. Did you know that per federal law, hospitals are permitted to purchase 503B medications for unlimited hospital administration and dispensing (FDA Federal SEC. 503B. [21 U.S.C. 353b])? By stocking these drugs, veterinary hospitals can offer their clients a wider range of treatment options and earn a higher profit margin on each sale.

Why Carry 503B Medications?

Offering 503B medications can help veterinary clinics remain competitive by growing revenue, all while helping vets deliver the best possible service to clients and patients. When selecting an outsourcing partner, be sure to choose one with a proven track record of quality and safety, which even includes how the products are packaged (more on that here!).

Want to review more best practices for dispensing and managing veterinary pharmaceuticals?

Our eBook offers more guidance on how to improve your veterinary pharmacy revenue:

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Easing Pet Anxiety and Empowering Owners

Imagine a dog trembling at the sound of thunder or a cat hiding for hours after a trip to the vet. These aren’t just quirks, they’re signs of anxiety, a condition that affects countless pets and often leaves their owners feeling helpless. Whether it’s separation stress, loud noises, or unfamiliar environments, anxiety can disrupt a pet’s well-being and strain the bond between animal and human. Advancing the standard of care for animals doesn’t just happen in veterinary practices; informed ownership leads to better care all around. By getting to the root of pet anxiety and educating on effective responses, veterinary professionals can empower and ease pet owners and their pets alike. Getting to the root of a pet’s anxiety Anxiety manifests in humans through rapid heart rate, rapid breathing, sweating, trembling, feeling weak, restlessness, nervousness, paranoia, and more. Animals are no different. Pets experience anxiety from the anticipation of a fear-inducing stimulus. It can be situational or related to specific triggers such as being left alone, a visit to the vet, or fireworks during holidays. The most common forms of pet anxiety are: Separation Anxiety – when pets get nervous or uncomfortable when they are alone or separated from their family. Fear-Related Anxiety – stems from several factors, including early life experiences, environmental influences, or even genetics. Examples of triggers are loud noises, specific situations, and unfamiliar people/animals. Age-Related Anxiety – often associated with older dogs with cognitive dysfunction syndrome (CDS), where memory, learning, perception, and awareness can decline and lead to confusion/anxiety. Helping pet owners understand the root of their pets’ anxiety can also help them understand the symptoms can show in many different forms, including but not limited to: Destructive Behavior Restlessness Hiding Loss of Appetite Clinginess Excessive Vocalization Urination or Defecation Aggression Empowering pet owners through education Pet anxiety doesn’t just affect the animal; it deeply impacts the owner’s emotional well-being and confidence in caregiving. When owners understand the signs of anxiety and the science behind it, they’re better equipped to respond with empathy and effectiveness. Education can foster trust between veterinarians and pet parents, creating a collaborative approach to care. It also helps demystify behaviors that might otherwise be misinterpreted as disobedience. For example, a dog chewing holes in the carpet when left alone can be sign of separation anxiety rather than the pet acting out. 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Desensitization and Counterconditioning: Gradually expose pets to anxiety triggers in a controlled way with professional guidance from a certified behaviorist or trainer, pairing the experience with positive reinforcement. Routine and Predictability: Pets thrive on consistency. Regular feeding, walking, and play schedules can reduce uncertainty and stress. In severe cases, you may recommend anti-anxiety medications based on the short-term or long-term needs of a pet. For example, short-term medications can help pets relax when they come to your practice for a visit, making their appointment as stress-free as possible Common pet anxiety medications include: Fluoxetine – a selective serotonin reuptake inhibitor (SSRI) often used for long-term anxiety management. Trazodone – frequently prescribed for situational anxiety, such as vet visits or travel. Clomipramine – a tricyclic antidepressant used for separation anxiety. 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Meet Marylu Ernsting: Championing Equine Health with Passion and Purpose

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