Drug distributors accuse PetIQ of antitrust violations

Med Vets and Bay Medical Solutions say PetIQ’s purchase of VIP Petcare will lead to unfair competition.

Drug distributors accuse PetIQ of antitrust violations

Two veterinary drug wholesalers claim that PetIQ stands to monopolize the distribution of pet parasiticides, particularly Frontline Plus, to retailers following PetIQ’s takeover of the VIP Petcare chain.

Sister companies Med Vets Inc. and Bay Medical Solutions Inc. stated in their antitrust lawsuit that PetIQ’s $220 million purchase of VIP Petcare earlier this year provided PetIQ with “substantial buying power” and the ability to dominate retail distribution of brand-name pet parasiticides. While PetIQ manufactures and sells generic parasiticides to mass retailers such as Walmart, Kroger and Costco, VIP operates thousands of pop-up veterinary clinics nationwide, offering vaccinations and prescribing parasite preventives and treatments.

PetIQ is incentivized to capitalize on VIP Petcare’s drug purchase agreements, the lawsuit stated.

“VIP received from Merial and other manufacturers discriminatory pricing, permitting VIP to achieve a majority share of the distribution of Merial’s Frontline Plus and other manufacturer-limited OTC medications customarily supplied to retailers through the secondary distribution system,” the lawsuit claimed.

One of Bay Medical’s top offerings is Frontline Plus, a leading flea-and-tick product.

A PetIQ spokesperson called the lawsuit “meritless” and said, “We are confident we will prevail in any litigation related to our acquisition of VIP Petcare.”

“PetIQ is committed to the highest ethical and legal standards, and we intend to defend ourselves vigorously in a court of law at the appropriate date,” the spokesperson said. “PetIQ has focused on providing pet owners convenient access and affordable choices to a broad portfolio of pet health and wellness products across its network of retailers, and with this acquisition, we are now able to provide the same convenience and affordability with veterinarian care.”

The lawsuit was filed April 4 in U.S. District Court in San Francisco, near VIP Petcare’s Windsor, California, headquarters.

The plaintiffs’ attorney, Jonathan Rubin, said the merger of VIP Petcare and PetIQ “is bad for competition.”

“And that means it’s bad for consumers and pet owners, who’ll have to pay higher prices as a result,” Rubin said.