Animals & Money: Making pet drugs cheaper

Human doctors can't sell prescription drugs because it would be a conflict of interest to have them dispense certain medicines for profit. A lot of veterinarians, however, count on prescription drugs as an income stream. DVM Magazine recommends charging a $20 dispensing fee and Veterinary Economics recommends an average markup of 150% to 175%.

So it's a relief to see some competition finally entering the area. Online pet sellers like 1-800-PetMeds and Doctors Foster and Smith have been making headway toward cracking what is something close to a monopoly on pet medications. Now Costco is getting in on the game. As the dog blogger Terrierman points out, Costco has started selling the expensive flea medication Frontline.

Veterinary Economics says that "practices typically mark up heartworm and flea control products 100%." That means half the amount you pay is going to your vet. Online pet retailers have already put price pressure on vets. But not all vets have to or will write prescriptions to be filled elsewhere. Having Costco enter the fray just puts added price pressure on the most common drugs.

Costco still hasn't matched Foster and Smith on price, however. Costco has a three-month supply of Frontline for a big dog at $45. That's definitely better than your vet's. It's better than 1800PetMeds, which charges $51. But Fosters and Smith charges $43. You'll have to check whether shipping charges and taxes apply. (The online sellers tend to ship this stuff free to make it more appealing.) And you have to add in convenience: if you're at Costco already, then that's probably easiest.

Costco stepping in means Frontline is finally going to be sold in other channels, which has drug reps unhappy. The next big step would be to have the heartworm pills sold widely. (Many, like Terrierman, think the pills are oversold as is.) Novartis, which makes the Sentinel and Interceptor brands, once sued the online retailers for re-importing their products and selling them here. The online sellers sold packages that were meant to be sold in Europe or Australia. Neither Costco nor Wal-Mart has broken into that highly lucrative market. Yet. But it's hard to believe that in this recession they won't find a way in.