Business , Featured

Fighting the good fight

Thwarting gray-market suppliers is a challenge for manufacturers.

Fighting the good fight
For one veterinarian, drug diversion was a way to keep his business afloat and his staff employed. It wasn’t about helping the enemy. It was a question of survival.
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The direct-channel relationship between veterinarians, drug manufacturers and distributors ensures clients that the medications prescribed for their pets are safe, effective and of the highest quality.

In the internet age, however, consumer websites offer pet drugs at discounted prices, and many national stores, such as PetSmart, Walmart and Target, sell name-brand prescription pet products. How some retailers acquire pet pharmaceuticals is controversial because the majority of manufacturers say they sell to veterinarians only or to a handful of recognized national distributors.

What is not in dispute is that many prescription products sold outside the veterinary channel have been diverted to gray-market distributors, who in turn sell directly to consumers or to other unauthorized sellers. It’s a shadowy, multimillion-dollar operation with potentially serious consequences for manufacturers, veterinarians and pet owners, experts say.

“At Zoetis, we believe diversion of veterinary medicine is a very significant problem,” said Steve Leder, senior vice president of Companion Animal and U.S. Distribution. “In fact, so much so that all of our contracts have anti-diversion clauses in them.”

Fake Drugs

Consumers who purchase pet medications online or at a big-box store might enjoy the convenience and cost savings, but the benefits come with risks, warned Carmen Catizone, MS, RPh, DPh, executive director of the National Association of Boards of Pharmacy. The biggest danger is that a pet could become sick or even die because a drug is counterfeit.

It’s not hyperbole. On the human side, the NABP has uncovered websites shipping counterfeit drugs that contained paint, pesticides and other dangerous compounds, Dr. Catizone said.

It’s an issue of concern to veterinary industry manufacturers as well.

“We don’t believe the availability of prescription veterinary products, especially a product as medically significant as, say, a heartworm preventative, outside the veterinary channel represents the best interest of pets or pet owners,” Leder said. “We can’t be certain how our products reach unauthorized gray-market aggregators or diverters, and therefore we can’t ensure the product’s authenticity, nor can we ensure that products coming through that channel were properly stored or shipped.”

The latter point is important because improperly stored medications may lose their potency, rendering them useless.

Not Against the Law

Online and big-box retailers that sell veterinary drugs without permission are reluctant to discuss how they acquire the products. (PetSmart, PetMed Express Inc. and PetCareRx did not respond to repeated requests for comment.) However, PetMed Express, which operates 1-800-PetMeds.com, offered some insight in its 2017 annual report to shareholders, noting: “Historically, many of the major pharmaceutical manufacturers have declined to sell prescription and nonprescription pet medications directly to us. In order to assure a supply of these products, we purchase medications from various secondary sources, including a variety of domestic distributors.”

What is important to note, Leder and Dr. Catizone said, is that the unauthorized resale of veterinary drugs, while bad practice, is not against the law. However, the sale of prescription drugs to consumers without a prescription is unlawful, which is why the more prominent companies require a prescription from a veterinarian before an order is filled.

Manufacturers like Zoetis say they work hard to curb the diversion of veterinary drugs.

“We have a number of things that we do internally in that regard, but it is proprietary information and I’m not at liberty to go into that,” Leder said. “One thing I can tell you is that we regularly monitor our customers’ ordering patterns, and when we detect anything out of the ordinary, we investigate to ensure that nothing irregular is going on. We also have a responsibility to alert veterinarians who may be providing pet owners with prescriptions to be filled outside their practice that Zoetis can’t guarantee the authenticity or proper storage and handling of such products purchased by pet owners outside of the veterinary channel.

“Moreover, we reserve the right to stop selling our products to a customer if that customer has been found to be diverting product to unauthorized resellers.”

Zoetis will not honor any guarantees for products a pet owner purchases from unauthorized sources and will not provide financial support in the event of an adverse experience or lack of efficacy.

“In all incidents, Zoetis reserves the right to ask for verification of purchase from Zoetis or one of our four select authorized distributors,” Leder said.

Monitoring Orders

Boehringer Ingelheim monitors sales and takes steps to control the diversion of its veterinary medications, said Mike Hamby, head of the company’s U.S. pet business.

“The efficacy, safety and integrity of our products is of paramount importance to us and the veterinarians who recommend them,” Hamby said. “As the quality and efficacy of diverted products are unknown, we have established protocol in place to monitor for and address reported instances of diversion of our products. We encourage veterinarians to report any suspected diversion of our medications so we may take appropriate action.”

On the distribution end, Henry Schein Animal Health, which stocks pharmaceutical products from many different manufacturers, stated that it watches customer purchases for signs of diversion and acts accordingly.

“We have internal controls in place that monitor customer orders to identify and prevent inappropriate controlled substance distribution,” the company said in a statement. “These internal controls, which we have developed with ex-DEA experts, require all customers to provide detailed information about their practice to ensure that orders are appropriate for the scope of that practice.

“As practices grow, we actively monitor opioid sales and adjust accordingly. When we find orders that fall outside what would be appropriate for the scope of the practice, based on the account history, size, and ordering pattern and frequency, we determine the acceptability for the completion of the order.”

Rogue Websites

The National Association of Boards of Pharmacy is attempting to curb drug diversion by monitoring spurious online pharmacies.

“We have a team that searches the internet every day and identifies sites that we believe are operating illegally or rogue sites for which we can’t gather enough information and suspect are not operating legally,” Dr. Catizone said. “We publish that information on our website. Of the 14,000 websites we have identified, we believe around 95 percent are illegal or rogue sites. That’s how large the problem is.”

In the past, the NABP issued a seal to be placed on the websites of accredited pharmacies that dispense prescription drugs and devices for companion and non-food-producing animals. But it recently stopped the program because unauthorized websites were taking the seal and using it without permission.

Now the association issues a “.pharmacy” domain to sites that pass its vetting process.

“The domain says that we have verified the website, who it is affiliated with, and that they are appropriately licensed and appear to be doing business properly,” Dr. Catizone said. “Around 500 pharmacy sites, including a handful of veterinary pharmacies, use the .pharmacy domain.”

Veterinarians can help reduce drug diversion by purchasing medications directly from manufacturers or approved distributors, and explaining to clients why the use of unauthorized distributors may be dangerous, Dr. Catizone said.

“I would also encourage veterinarians to do some research for clients and create a list of approved pharmacies or websites for the fulfillment of prescriptions outside the office,” he added. “At least the veterinarian will know that the client is going to a legitimate site and will not be causing injury to their pet.”


Red flags

Unauthorized drug distributors and sellers know what attracts customers and have become quite savvy at luring unsuspecting pet owners looking for a bargain. However, there are numerous signs that a website is illegitimate, said Carmen Catizone, executive director of the National Association of Boards of Pharmacy.

They include:

  • The website contains no information on where the company is physically located.
  • The state board of pharmacy has no record of the website or can’t find information for the website.
  • The website provides no contact information for an affiliated veterinarian or pharmacist.
  • The website does not require a prescription to fill an order.
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