Diagnostics, wellness plans gain traction in 2012

by Constance Hardesty, AAHA editor in chief

If you’re not offering a wellness plan or planning to do so in the near future, you’d better get cracking.

This is the advice of Ron Brakke of Brakke Consulting, who highlighted recent trends, news and developments in the veterinary world at the Animal Health Breakfast Roundtable in Kansas City, Mo.

"If a vet doesn’t do it, he’s going to be out of business," Brakke, president of Brakke Consulting, said to a group of industry and professional leaders Wednesday, June 20, 2012.

Brakke spoke at the first Animal Health Breakfast Roundtable, hosted by Stinson Morrison Hecker, LLP. Brakke and Susan Warren, also of the Brakke consultancy, highlighted the trends and developments over the past six months. The event took place in the law firm’s office in Kansas City.

Here is a summary of major trends to look for in 2012 and going forward, based on Brakke’s presentation.


Diagnostics is one of the hottest and most promising fields in companion animal health, Brakke said. With the increased focus on preventive health care and the rise of prepaid wellness programs, diagnostics will take center stage at practices.

Spending on diagnostics has increased nearly threefold in the past seven years, according to Brakke figures. In 2005, $685 million was spent on diagnostics. Currently, that number is close to $2 billion – and most of the spending is directed at companion animals.

The numbers have nowhere to go but up, due in part to the AVMA-AAHA Canine and Feline Lifestage Guidelines, which recommend regular testing as part of overall preventive healthcare.

Technological advances will encourage this trend by simplifying sample collection and reducing the time to report results. Simpler processes and faster results will make extended testing more do-able and cost-effective for practices, Warren said.

Still another trend supporting the growth of diagnostic testing is crossover from human to veterinary medicine. As specialty testing for cardiac conditions, cancer, and bio-markers increase on the human side, Warren says practitioners can look for veterinary testing to follow.

One of the most exciting and potentially fruitful developments in diagnostic testing will take more time, Warren said. Commercial DNA diagnostic testing is about 2-3 years out for human medicine; practitioners can expect to see it in the veterinary field in 10 years, Warren predicted.


Veterinarians may see more products and lower prices in the wake of an FTC investigation regarding exclusive distributor agreements. As a result of the investigation, IDEXX has altered its distribution strategy, opening to the door to allow veterinary distributors to carry both IDEXX and competing products.

Specialties draw more traffic

Specialty practices are reporting increased foot traffic. These practices were hit hard by the recession, with fewer veterinarians referring cases and owners electing to postpone treatment.

Generics – mixed news, good and bad

In the face of concern about generics, reassuring news comes from the flea and tick area. In 2011, the largest flea/tick product [fipronil] went generic "and the world didn’t end," Brakke said.

Just the opposite. There are at least 12 generic labels for fipronil, and that has led to a flood of consumer advertising. The extra consumer advertising is creating a larger market for flea/tick products, even as the weather increases the need for it, Brakke said.

Another good sign: Generic fipronil is replacing the cheap and controversial flea/tick products that, until recently, were a popular alternative for low-cost flea and tick control, Brakke said.

Generics are gaining ground, and two converging factors will drive that trend over the next few years as patents on leading products expire and no new blockbuster products (estimated to generate $50 - $100 million) are developed to replace them, Brakke said.

Recent consolidations may help to mitigate that trend in the long run, however, because the resulting large, solid firms have the critical mass to conduct the basic research that yields important new products, Brakke said.

Over-the-counter sales

Expect cost-conscious consumers to continue to shift food and drug purchases to online, big-box pet stores, large retailers and grocery stores, Brakke said.

According to the Brakke Pet Owner Channel Use Survey, only one-third of 1,200 pet owners surveyed said they buy pharmaceutical products solely from the veterinary clinic. Slightly more than one-fourth (28 percent) said they buy mostly or exclusively from pharmacies.

That said, veterinarians fearing online pharmacies should look closer to home. About three-quarters (73 percent) of sales of over-the-counter products sold outside the practice are sold through pet specialty stores or mass stores like Target or WalMart.

Companies seeking consumers

Connecting with consumers is huge, according to Brakke. Large vendors are fast-tracking efforts to reach out to consumers with persuasive and educational information. VCA made the first splash with its purchase of VetStreet, an IT company that provides client outreach for veterinarians. (VetStreet is one distribution channel for the American Animal Hospital Association’s PetsMatter consumer e-newsletter.) IDEXX is currently involved in an initiative to reach consumers directly.