NCPA - National Center for Policy Analysis

Do Drug Companies Favor Pets Over People?

March 15, 2000

Astute pet owners have noticed that some prescription drugs used for both humans and animals are cheaper when bought from their veterinarian than from a pharmacist serving people. Are pets' prescriptions cheaper because drug companies favor animals over people?

Congressional investigators recently studied prescription drug pricing for pets versus people for the House Government Reform Committee.

  • The study compared wholesale prices of 14 popular drugs marketed to people and pets, often under different brand names, and found the cost for people can be up to five times higher.
  • For instance, Augmentin, a popular antibiotic marketed as Clavamox for pets, cost more than three times as much when the drug was intended for humans.
  • The study also looked at other, "directly comparable drugs" -- medications marketed under the same name and given in the same dosages to people and pets -- and found prices averaged 131 percent more when the drug was intended for human use.
  • For instance, a one-month supply of Medrol cost $3.90 when purchased as an anti-inflammatory medication for Fido but $20.10 when bought by Fido's owner for asthma.

A major reason for the difference in drug pricing, says the pharmaceutical industry, is that medicines given to animals "piggyback" on the lengthy and expensive approval process needed for use in humans. The cost of that process is absorbed by the drug's primary market -- humans.

Another reason is that insurers or government programs -- called third party payers -- frequently pay for people's prescriptions. Insurance increases the demand for drugs and the overhead expense of pharmacists, who must file claims to receive reimbursement. This tends to raise drug prices. Cash payment exerts downward pressure on prices because pet owners ration their pets' care to the amount the owners can pay out of pocket.

Source: Caren Benjamin, "Some Drugs Are Cheaper for Pets," Associated Press, February 23, 2000.

 

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