{"id":6304,"date":"2019-10-01T00:00:55","date_gmt":"2019-10-01T00:00:55","guid":{"rendered":"https:\/\/todaysveterinarybusiness.com\/?p=6304"},"modified":"2022-06-15T17:44:58","modified_gmt":"2022-06-15T17:44:58","slug":"better-taste-less-waste","status":"publish","type":"post","link":"https:\/\/navc.sitepreview.app\/todaysveterinarybusiness.com\/better-taste-less-waste\/","title":{"rendered":"Better taste, less waste"},"content":{"rendered":"

As practicing veterinarians, we often have many choices for what we prescribe our patients.\u00a0Many drugs come in multiple forms, such as caplets, liquids and chewables. Compounding pharmacies give us\u00a0even more options. Why do we choose one over the other? What do our clients prefer? In this article, let\u2019s explore chewable medications.<\/p>\n

Deliciously Good<\/h3>\n

From the perspective of pets, they like to consume something that tastes good to them, not necessarily what might taste good to us. The time my dog spends in the cat\u2019s litter box is a testament that pets have different tastes than we do.<\/p>\n

If you were a dog or cat, would you prefer a finger shoved down your throat or would you rather consume a \u201ctreat\u201d? We often get the pill down using butter, bread or a tasty pill wrap, but pets are talented at spoiling our trick. I sometimes find a lonely pill on the carpet or wood floor after a \u201csuccessful\u201d pilling of my dog. Regardless of the pet, they prefer chewables.<\/p>\n

Chewable medications can pose occasional challenges. Certain food allergy cases (rare) can limit the doctor\u2019s prescribing options. One of the biggest challenges is how palatable chewables can be, leading to overdoses in a few cases I have seen. You don\u2019t often see a dog consuming a 100-count prescription bottle filled with a bad-tasting tablet. It is possible, though not as likely.<\/p>\n

A Low-Stress Option<\/h3>\n

From the client\u2019s perspective, do you want to chase your pet around the house, your fingers covered with peanut butter and saliva, as you try to shove a pill down its throat? Clients want easy administration of pet medications<\/a>. They want to avoid stress, which can mean not coming into our clinic for an exam, not giving the monthly preventive every month or skipping the last four days of antibiotics.<\/p>\n

Cost is certainly a consideration with pet medications. In most cases, chewables are more expensive than tablets. How much more a client is willing to pay varies. The decision often is based on the perceived ease of getting a pet to take a medication. As veterinarians, we should not assume that clients won\u2019t pay an extra couple of dollars a day for easier drug treatments. It is cheaper than a daily cup of coffee. Give clients the option.<\/p>\n

From the veterinarian\u2019s perspective, our first goal is to do what is best for the pet and secondly, what is best for our pocketbook. From a business perspective, let\u2019s look at the math. A chewable that costs us $1 might be sold to the client for $2, earning us a dollar. In comparison, a tablet that costs us 70 cents is sold for $1.40, a 70-cent profit. This is a basic lesson in pricing. How I approach it is to charge the client $1.70 for the tablet, ensuring an equal margin on a\u00a0per-dose basis.<\/p>\n

A Competitive Environment<\/h3>\n

Now let\u2019s look at the competition. In many cases, a race to the bottom is going on \u2014 the dramatic cutting of margins. Some prices I see online indicate the sellers are using prescription drugs as loss leaders to drive customers to their websites. The vast majority of the low, low prices are tablets. There is less price competition with the more expensive chewables.<\/p>\n

Profit is revenue minus cost. Revenue is the number of units (volume) sold multiplied by the average cost of the unit. We do not have a lot of control over cost except during contract negotiations. Where we can drive profit, more than anywhere else, is through driving volume. Chewables will drive volume.<\/a><\/p>\n

Pet owners who can easily give a medication are more likely to give it. A chronic med that is given daily or monthly will be given more often if the task is easy. A course of medication prescribed for a short-term disease is more likely to be completed if giving it is easy.<\/p>\n

Lower Prices, More Profit<\/h3>\n

My experience with carprofen was dramatic. I decided to cut prices \u2014 non-chewable carprofen at a level competitive with online pharmacies and a chewable formula at about 20% over the internet price.<\/p>\n

In the 12 months before I lowered my prices, I sold $24,000 worth of non-chewables, for a $12,000 margin, and $50,000 worth of chewables ($25,000 margin). After the change, the first 12 months saw $30,000 in non-chewables sold, for an $11,000 margin, and $85,000 in chewables at a $35,000 margin. Overall, I drove the product margin from $37,000 to $46,000. I also was able to increase my medication monitoring screens by 15% and provide better medical care for what is often the geriatric canine.<\/p>\n

We should always be looking at dollars of profit, not the percentage of profit. In the example above, clients looking for the lowest possible price were driven to non-chewables at a price competitive with online merchants. The majority of clients wanted the chewable option and liked the convenience of getting it from me.<\/p>\n

By reducing the gap between online and in-hospital pricing, I was able to drive sales volume.<\/p>\n

I am aware that every hospital is different. We have different clients and a variety of competitors. In addition, each product has its own set of challenges and opportunities. Clients choosing a more expensive type of medication because it is easier to give likely are less price sensitive.<\/p>\n

You Can Do It<\/h3>\n

As practice owners and veterinarians, we have many ways to approach our pharmaceutical business. I have observed some colleagues writing scripts for all medications, making product sales less than 10% of their revenue. Others have approached today\u2019s market by partnering with a home-delivery platform, which can maintain the sales volume but dramatically decrease the margin percentage and sometimes the margin dollars. Others, like myself, believe that in-house sales of pharmaceuticals can still be a viable profit center.<\/p>\n

No, we cannot approach pricing and sales the same way we did when I started as a veterinarian. We need to be strategic, using script writing when it makes sense and a third-party home-delivery partnership when it is logical. The process can be made simple.<\/p>\n

The factors to look at are:<\/p>\n