Consumers with pets have been getting ripped off on flea/tick treatment pet medicines for years*. Pet owners paying for Advantage II and K9 Advantix II topical flea-and-tick treatments, for instance, could have saved hundreds of dollars by now had they switched to the generic versions that first hit the market six years ago. The problem is: Where do consumers find the generic versions of these pet medications? If they shop at popular pet pharmacy and pet specialty sites, they won’t. In fact, the generic pet meds** are nowhere to be found at many of the biggest pet specialty stores, like PetSmart or Petco. And they are missing from popular online pet pharmacies like Chewy.com or PetMed Express. The reason: According to a new federal lawsuit filed by one of the generic pet med makers, there has been a multi-year scheme by the brand-name pet med companies like Bayer to block competition.
The federal lawsuit filed by Tevra Brands in the U.S. District Court in Northern California, “offers a rare behind-the-scenes glimpse of the multibillion-dollar pet medication market, where a few major companies have a stranglehold on pricing. Tevra’s suit claims it lost tens of millions of dollars because Bayer Animal Health, a former subsidiary of the German pharmaceutical giant, conspired to maintain its monopoly over the treatment it created.
Tevra sells its generic topical treatments for cats and dogs on its website, on Amazon and elsewhere, but the company argues that Bayer*** prevented it from reaching pet owners where they’re most likely to shop and depriving them of a better deal.”
Other generic imidacloprid topicals are also on the market, but are equally absent from major pet specialty stores and online pharmacies. They include, PetArmor Max, Adventure Plus for Dogs and Amazon Basics Flea, Tick & Mosquito Topical.
How the scheme plays out to choke cheaper rivals out of the marketplace
Brand-name or patented versions of pet medicines dominate much of the pet medication market. Agreements from brand name pet med producers like Bayer that allow vendors to sell their popular brand name versions of pet treatments, block vendors – including pet stores, online pharmacies and wholesale distributors that supply retailers and veterinarians – from selling products that directly compete with their brand-name goods. Tied to those deals are often lucrative financial incentives such as discounts and rebates that vendors cannot afford to turn down, especially if their rivals are gaining an edge in the marketplace.
There are at least two large pet drug companies whose agreements banned national distributors from carrying the generic versions, or any similar versions, of their brand-name products.
Oversight agency does nothing
The Federal Trade Commission (FTC) has known about the dubious use of exclusivity deals in the pet medication market since at least 2012, but has done nothing to intervene. This, despite the Sherman Act which prohibits actual or attempted monopolization, as well as any contracts and conspiracies that result in the unreasonable restraint of trade, and the Clayton Act which bans certain discriminatory prices or services between merchants, as well as mergers and acquisitions that restrict competition.
Where the case is now
The lawsuit, which has survived several motions to dismiss, is still in the discovery and deposition stages. It could go to trial as early as July 2024.
*According to the 2023-2024 American Pet Products Association’s National Pet Owners Survey, 6 in 10 dog owners use some form of flea-and-tick treatment, ranging from collars and shampoos to pills or spot-ons, for which they spent an average of $92 in the past year. Some pet owners cannot even afford to protect their pets from fleas and ticks due to the high prices of the brand name products…consumer surveys show that cost is the top reason people do not protect their pets from fleas and ticks.
**The Tevra generic line includes TevraPet Activate II for dogs and ActiSpot II for cats, as well as Vetality Avantect II for dogs and Advotect II for cats. Its ActiSpot II 6-dose treatment for large cats cost $30 on Amazon.com, as of May 15. The brand-name equivalent, Advantage II for cats, cost more than twice as much – $64 – on Chewy.com.
***Bayer monopolized the pet flea-and-tick market, making roughly 85% of all sales in that market in 2018. Bayer sold its entire animal health division in 2020 to Elanco, an animal health business spun off from pharmaceutical giant Eli Lilly and Co., for $7.6 billion. Although Elanco is not named as a party in the lawsuit, it is now responsible for defending the case.