I recently attended the WOAH 92nd Congress in Paris, which is attended by representatives from over 150 countries along with the WOAH staff and invited guests, to review and manage the global animal health situation.

This year’s forum centered around vaccination and its benefits for not only animal health, but also the potential benefits to One Health, AMR reduction, and climate impact mitigation.

A referendum on increasing vaccine availability and usage was passed unanimously (view on the WOAH.Org website) but for its effect and impact, will require a stronger partnership between the private and public organizations involved. And most importantly, aligning potential vaccine usage with the WTO policies, which can create challenges.

Of note, during the program there was a special event where Brazil was declared FMD free without vaccination. Congratulations to Brazil for this tremendous effort as it took a multi-stakeholder effort by the livestock industry, animal health companies and government support to achieve this result.

On another note, I would like to also congratulate Ceva on its recent round of financing, resulting in a new valuation of nearly $10B USD. It’s an incredible story of growth through the years led by Dr. Marc Prikazsky, but also congratulations to many of my friends who also worked there and certainly were a big reason for the success! Maybe it will be the next publicly traded animal health company?

In my view, tremendous value creation is happing in animal health which offers not only growth- but consistent,  sustainable growth. Nice to see the investment community interest is following!

Paul Casady

We have been studying the changing distribution channels and home delivery of pet medications for years now.  Our first study on this was in 2019 where we detailed the way manufacturers were selling, and pet owners were buying pet medications and we most recently studied the home delivery trends with a report issued early last year – a very well received report by our clients.   We plan to survey pet owners and veterinarians late this year and issue an updated and expanded report early next year.

In thinking about this report, a recent McKinsey article caught my attention because of an unexpected change in consumer preferences.  Surprisingly, speed of delivery was the #1 preference in 2022, but it slipped to #5 in 2024 based on their survey of 1,000 US consumers.  This chart shows the results of their study:

Their data suggests that 90% of consumers are willing to wait two or three days for deliveries, especially if it lets them avoid shipping costs.  I thought we were all so impatient that we expected next-day delivery?  Their data also suggests that consumers are becoming more sensitive to costs and place more value on reliability of delivery.

We look forward to collecting new data from pet owners and veterinarians later this year and if you have aspects of e-commerce and home delivery you would like us to explore, let us know.

Bob Jones

Animal Health and Nutrition, though a bit conservative, is a refuge from the tumult of the tech and cyber world, right?

Wrong.

Have you heard of Venom Spider? I’m not talking entomology. Venom Spider is a phishing group specializing in social engineering. They cull sensitive data about organizations to attack them financially, organizationally, and strategically. “The attacks involve the use of email, telephone, or text messages that look legitimate and cause unsuspecting recipients to fall for the scam and put private information at risk,” offers SHRM. This is no small thing.

Their latest target? HR departments and hiring managers. Bit by bit, they enter the host’s ERP. Arctic Wolf Labs, a cybersecurity firm noted, “The recruiters and hiring managers who work in HR departments are often considered to be the weak point in an organization by attackers.”

If you’re in a larger organization, you may have received cybersecurity training. If not, common sense should prevail. Beware of attachments from unknown sources or those with suspicious titles. Check the sender’s email address before opening the attachment. Look them up via a search engine before proceeding.

We’re fortunate to enjoy a friendly, intimate industry. Still, vigilance is always appropriate.

Jeff Santosuosso

Recently, Amazon and Vetsource announced they are partnering to offer hundreds of prescription pet medications through Amazon.  While the partnership with Vetsource may come as a surprise, it shouldn’t surprise anyone that Amazon is moving into the pet prescriptions space. They have offered human prescriptions since 2020 through their Amazon Pharmacy subsidiary; and pet supplies are already big business for them, generating over $22 billion in revenue in 2024.

How much business can Amazon grab from specialty pet pharmacies like Chewy and PetMedExpress?  According to the pet owner survey in Brakke’s 2024 Home Delivery Report, Amazon is already the #2 source for online pet medication purchases (which includes non-prescription products).  And since more than 9 in 10 adults in the USA are active Amazon users, with the right marketing it would seem only a matter of time before Amazon takes over the #1 spot.

Amazon appears to be keenly interested in growing their position in the pet space.  In 2023 there was talk that they might launch a veterinary telehealth service, and they launched human telehealth services in 2024.  It seems inevitable that before long, Amazon will be a one-stop shop for pet owners.

Lynn Fondon

This week I attended the Animal Health and Nutrition Innovation conference in Boston.  This was my second trip to Kisaco’s animal health event here in the US and I thought I would highlight one of the panel discussions that I felt most of us haven’t thought through the consequences of its adoption.

The title of the panel discussion was “AI in Veterinary Practices – Impact on Productivity, Client Engagement, Quality of Care (Clinical Decision Making) and Revenue.  That’s a lot to cover in 30 minutes. One of the panelists, Adam Little, President, Exponential Animal Health, Inc., said something that really caught my attention, “…soon, the veterinary clinic that doesn’t use AI will provide substandard care.”  He went on to say that AI will allow veterinarians to do things they would rather do and reiterated how fast AI will change the quality of care.

What’s happening in human medicine is coming over to veterinary medicine.  AI will improve medical diagnoses by enhancing imaging, predicting risks, analyzing pathology and processing clinical data.  It will be integrated into how veterinarians provide care to pets and more likely will be a “second opinion” for veterinarians. The large language models used, like those from Open ai and Xai, will continue to improve performance and accuracy as they are better and better trained.  We might be experiencing AI fatigue about now, but we need to keep thinking about how our industry is about to change.

Bob Jones

Last weekend I was invited to speak at the Little Fish Conference in Los Cabos, Mexico.  The focus of the conference was business and economics, with a high-protein roster of speakers from both within and outside of the veterinary industry.  Featured were several prominent economists and bankers who provided perspective on the global and US economy, as well as trends within the veterinary industry and the broader consumer market.  My takeaway from the speakers was that the current chaos and uncertainty in the market made economic predictions difficult, but the attendees seemed positive about their outlook for the year.

Now in its 8th year, the Little Fish Conference was conceived by industry veteran Darin Nelson as a meeting and educational venue for executives of smaller corporate veterinary practice companies, hence “little fish.”  Zoetis has been the principal sponsor from the beginning.  Now, the conference attracts leaders of practice-owning companies both large and small, and many were well represented at last weekend’s meeting.   Kudos to Darin Nelson and Zoetis for hosting an outstanding event.

John Volk

Cost of Animal Health represents 0.4% of cwt price in the Brazilian cattle farming
Animal health in Brazilian livestock farming accounts for only 0.4% of producers’ revenues, despite the importance of vaccines and preventive treatments for productivity and sustainability. The low investment contrasts with the high financial risks associated with diseases and parasites.

Vaccines against rabies, clostridial infections, and brucellosis, along with parasiticides, are cost-effective and play a crucial role in disease prevention. The average annual investment in animal health per head is just 20 BRL (USD3.00), ensuring herd protection and financial stability for producers.

Emílio Salani, Executive Vice President of Sindan, emphasizes that the low costs of medicines and vaccines are evident, especially when compared to the risks that diseases and parasites pose to livestock. “In a scenario where a producer has a herd of 100 cattle, the expenditure on vaccines and parasiticides would represent a tiny fraction of the annual operating costs. It is essential that the veterinary industry is valued among large producers.”

In my opinion, based on my long experience working for the Animal Health industry for more than 30 years, this represents a huge opportunity for our industry to help develop the full potential of cattle farming. It has evolved significantly in the last decades, but it has a long way to go towards to what other beef producing countries has already achieved.

Your thoughts on the Brazilian cattle opportunity are welcomed.  And if you would like assistance entering the Brazilian livestock market – or improving your existing business – we are ready to help.

Mauri Ronan Moreira – LATAM Brakke Consultant
*Source – SINDAN

This week, I draw your attention to the notice in the Newsletter regarding Glenmark Pharmaceuticals, Inc. and the issuance of a recent FDA Warning Letter stopping importation and recall of 39 different generic products manufactured at the Glenmark facility in India.

While this recall should have virtually no effect on the availability of drugs to veterinarians, it comes at the same time as the US administration’s establishment of substantial tariffs on pharmaceuticals made outside the US in an effort to shift overseas production of pharmaceutical products back to the United States, primarily for national security and balance of trade reasons.

There is no question that the US is vulnerable to shortages outside of its control due to the high volume of imported medicines, for both animals and humans.  Some estimates are that over 90% of antibiotic APIs sold in the US are imported from China.  It is not known how much of veterinary drugs are imported from China, but we feel 20-40% might be a good estimate.

Generic, non-patented, low-cost products often don’t support the high cost of establishing production in a US based site when lower cost sources can be found overseas.  The threat of tariffs can certainly cause companies to plan production moves, but the time and cost associated with moving from off-shore to a US production site means this is a very long-term solution to an immediate problem.  Look for trade deals soon between major exporters and the US.

 Jim Kroman

The Hidden Math Behind Veterinary Rx Sales: A Tale of Two Channels

How do margins really stack-up for pet Rx products in-clinic vs. clinic online store sales?

Let’s crunch the numbers: A 30-day supply of Carprofen priced at $50 (wholesale $30) appears to offer a healthy 40% margin. However, VHMA benchmark data shows the reality is far different. In-clinic dispensing incurs labor costs ($5-$10 per prescription), inventory carrying costs (20-30% annually), and credit card processing fees (averaging 3.5%). Factor in 5-10% annual inventory loss from spoilage and 2-5% shrinkage reported by VHMA, and that 40% margin mirage evaporates to roughly 14.5%.

And while vet clinic-owned online stores through platforms like Covetrus, Vetsource and Blue Rabbit will help ease physical inventory costs and reduce labor burden, they also introduce platform fees, marketing costs and competitive pricing pressures. AVMA Economic Reports suggest the automation and efficiency gains can help preserve margins while freeing staff time for higher-value services.

Also consider, the 2024 Brakke Pet Rx Home Delivery Study revealed “pet owner demand” is the main reason vet clinics have online stores, and nearly 80% of pet owners said home delivery helps Rx compliance. Today, people expect to buy everything in a couple of smartphone clicks and have it delivered to their door.

Smart practices are adopting hybrid strategies to maximize overall practice profitability by leveraging online platforms for maintenance medications while maintaining in-clinic inventory for acute needs. According to AAHA guidelines, this approach optimizes inventory investment while enhancing customer service.

Richard Hayworth

One can say that we certainly live in interesting times!

The US administration believes that a “rebalancing” of trade conditions is required, and part of the rebalancing involves tariffs.  This has sparked a huge debate and also a panic in the stock markets- resulting in wild swings in the days after.

Those of us that have been involved in international trade are well aware of the “inconsistencies” that occur in trade across the globe and maybe we have just become “immune” to the impacts that they make. In fact, tariffs are just one of the trade issues that impact our business. Biosecurity measures, inconsistent regulatory requirements, and other controls actually have a far greater impact. Access to markets both ways are manipulated to control imports and exports to protect national interests. And it certainly impacts the animal health industry.

My suggestion is to do your own homework to understand the issues and the dynamics. WTO.ORG provides a nice, consolidated list of tariffs by country. Also, a great study in tariff strategy is the history of the Australian automobile industry. As for the veterinary pharmaceutical industry, my view is that the tariff impact will be limited, but time will tell. The bigger threat is supply chain disruption if events escalate.

Meanwhile, try not to look too often at your 401K…and have multiple suppliers of critical items in your products.

Paul Casady