The market for pet medications in the U.S. is experiencing considerable activity. Longtime flea and tick leader Frontline (from Merial) is finally feeling the effects of the patent expiration of its active ingredient, fipronil. Several other fipronil products have made a splash, gnawing away at Frontline’s market share. Meanwhile other flea/tick treatments are coming to the fore, such as Elanco’s Trifexis, Bayer’s new flea collar Seresto and Merial’s new answer to its Frontline erosion – NexGard.

The interest in keeping our pets healthy has caught the attention of one important constituent – the investment community. Pfizer spun off its Animal Health unit (renamed Zoetis) in the largest IPO since Facebook. Novartis’ Animal Health unit has drawn interest from several competitors. And Aratana, a now publicly traded biopharma focused on pet therapeutics, is leading a new wave of animal health start-ups.

All of this activity has gotten retailers interested. Pet medications have long been the domain of veterinary clinics. While this is still undoubtedly the most important channel, brick-and-mortar retailers and online retailers have gained ground.

In its third edition, Pet Medications in the U.S: Over-the-Counter and Prescription Remedies as Consumer Products analyzes the market for prescription and over-the-counter medications for dogs and cats, with a particular focus on brand-name products used by consumers and on antiparasitics. Areas covered include parasite prevention and control (flea, tick, heartworm, etc.), pain management (focusing on non-steroidal anti-inflammatory drugs), behavioral health, overweight/obesity, cognitive dysfunction, heart health, ear care and allergies. The report provides in-depth coverage of competitive trends, new product trends and marketing activity, and draws on insights from other reports in Packaged Facts’ extensive Pet Market Collection. Statistics provided include historical and projected market revenues, along with demographics and psychographics of pet med purchasers, based on data from sources including Simmons and Packaged Facts own pet owner surveys.

Table Of Contents

Chapter 1: Executive Summary

Scope and Methodology

Market Definition

Product Regulation

Report Methodology

Market Trends

Market Size & Composition

U.S. Retail Sales of Pet Medications at $7.6 Billion in 2013

Share of Sales by Distribution Channel

Figure 1-1: Share of U.S. Retail Sales of Pet Medications by Distribution Channel, 2013 (percent)

Market Outlook

Table 1-1: Projected U.S. Retail Sales of Pet Medications, 2013-2018 (in billions of dollars)

Competitive Overview

Two Groups of Marketers

Pharmaceutical/Veterinary Channel Marketers

Table 1-2: Global Pharmaceutical Marketers: Total Sales vs. Animal Health Sales, 2011-2012 (in millions of dollars)

Pet Product/Retail Marketers

Notable Deals

Pfizer Spins Off Animal Health Division

Perrigo Acquires Sergeant's, Then Velcera

Bayer Acquires Teva Animal Health

Aratana Leads the Way for New Entrants

In the Works

Retail Trends

Channels Continue Diversification

Online Channel Expands

Target and Walmart Jump into Pet Prescriptions

74% of Dog or Cat Owners Use Flea/Tick Products

Majority Of Pet Owners Choose Spot-On Flea/Tick Medications

71% of Dog-Owning Households Use Heartworm Meds

Figure 1-2: Purchasing of Heartworm Medications by Channel, 2013 (percent of U.S. dog or cat owners)

Antibiotics Top List of Other Pet Medications

Attitudes on Veterinarian/Professional vs. Store Products

Table 1-3: Levels of Agreement with Statement, "I Trust the Pet Medications My Veterinarian Recommends": Dog Owners vs. Cat Owners, 2013 (percent)

Chapter 2: Market Trends

Market Size & Composition

U.S. Retail Sales of Pet Medications at $7.6 Billion in 2013

Table 2-1: U.S. Retail Sales of Pet Medications, 2009-2013 (in billions of dollars)

Share of Sales by Animal Type

Figure 2-1: Share of U.S. Retail Sales of Pet Medications by Animal Type: Dog vs. Cat, 2013 (percent)

Share of Sales by Distribution Channel

Figure 2-2: Share of U.S. Retail Sales of Pet Medications by Distribution Channel, 2013 (percent)

Market Outlook

Many Positive Indicators

Human/Animal Bond Bolsters Pet Health/Wellness Spending

Table 2-2: Level of Veterinary Expenditures by Human-Animal Bond and Animal Type, 2011 (mean dollar per household)

Table 2-3: Mean Number of Veterinary Visits: By Human/Animal Bond Among Dog and Cat Households, 2011

Figure 2-3: Level of Agreement with Statement: "I buy pet supplements and/or functional treats to make doubly sure that my pet gets all the special nutrition it needs," 2012 (percent)

Premium Demographics

Figure 2-4: $70K+ Household Share of U.S. Pet Market Expenditures: By Category, 2002 vs. 2012 (percent)

The Aging Pet Population

Table 2-4: Age of Dogs and Cats, 2014 (percent of pet owners)

Figure 2-5: Percentage of Dogs and Cats Age 6 and Over: 1987 vs. 2011 (percent)

Overweight and Obese Pets Keep Costs Up

Table 2-5: Percentage and Number of Overweight and Obese Dogs and Cats, 2012

Figure 2-6: Percent with an Overweight Pet: Dog vs. Cat Owners, 2014 (percent)

Global Pharmas Are Major Investors

Morris Animal Foundation Advances Veterinary Research

Pet Insurance Shows Double Digit Growth

Figure 2-7: Projected North American Pet Insurance Market Revenues: United States, Canada, and North America, 2013 vs. 2018 (in millions of U.S. dollars)

Cautiously Optimistic Consumers

Table 2-6: Selected U.S. Economic Measures: 2008-2013 (percent and number in millions)

Some Pet Owners Still Spending Less

Table 2-7: Level of Agreement with Statement: "I am spending less on pet products because of the economy," 2010-2014 (percent)

Table 2-8: Economic Mood of U.S. Pet Households: 2009-2013 (percent)

Table 2-9: Economic Outlook of U.S. Pet Households: 2009-2013 (percent)

Overall Veterinary Visits Up, But Percentages Down

Dog Visits Up, But Fewer Dog Owners Visiting

Cat Visits Drop Some More

Efforts to Reverse Trend

Table 2-10: Percentage of Dog and Cat Owners Who Have Visited Vet in Past Year: Routine Checkup vs. Sick/Emergency Care, 2012 vs. 2014

Highly Competitive Flea/Tick Segment

Generics and Channel Competition

Competition from Holistic and Natural Treatments

Figure 2-8: U.S. Retail Sales of Pet Supplements and Nutraceutical Treats: Total, Small Animal (Dog, Cat, Other), Equine, 2008, 2012, 2017 (in millions of dollars)

Table 2-11: Use of Specialty Nutritional Formula Pet Food, Treats, and Pet Supplements: Dog Owners vs. Cat Owners, 2013 (percent)

Illustration 2-1: Hill's Prescription Diet Metabolic Pet Food Line

Table 2-12: Level of Agreement with Statements "If Natural/Organic Pet Products Were More Affordable / More Available Where I Shop, I Would Buy Them More Often," 2013 (percent of U.S. pet owners)

Looking Ahead

Projected Market Growth: Sales to Top $10 Billion in 2018

Table 2-13: Projected U.S. Retail Sales of Pet Medications, 2013-2018 (in billions of dollars)

Table 2-14: Economic Outlook of U.S. Pet Households: 2009-2013 (percent)

Chapter 3: The Marketers

Competitive Overview

Two Groups of Marketers

Ten Leading Pharmaceutical/Veterinary Channel Marketers

Table 3-1: Global Pharmaceutical Marketers: Total Sales vs. Animal Health Sales, 2011-2012 (in millions of dollars)

Table 3-2: Global Pharmaceutical Marketers by Dollar and Percentage Change in Global Sales: Total vs. Animal Health, 2011-2012 (in millions of dollars)

Pet Product/Retail Marketers

Notable Deals

Pfizer Spins Off Animal Health Division

Perrigo Acquires Sergeant's, Then Velcera

Bayer Acquires Teva Animal Health

Unicharm Takes Stake in Sumimoto's Hartz

Aratana Leads the Way For New Entrants

In the Works

Other Deals

Generic Pet Medications on the Rise

Generics Take on the Frontline Franchise

Putney Grows Its Pet Generics Portfolio

Illustration 3-1: Putney Inc. Screenshot

Focus on Antiparasitics

Frontline Still Leads in Flea/Tick Sales

Table 3-3: Marketer Shares of U.S. Retail Sales of Flea & Tick Spot-Ons, 2013 (percent)

The Blockbuster of Animal Health

At the Cliff

Bayer Goes Rogue

New Generation Advantage II and K9 Advantix II

Advantage a Top Consumer Brand at Bayer

Zoetis and Revolution

The Novartis Portfolio

Elanco Innovations

Virbac Launches Fipronil Topicals

Ceva Fuels Growth with Vectra

Fipronil Wars: The Saga

Merial vs. Velcera

HVG and Ceva vs. Merial

A New Era of Creative Destruction

Merial's Silver Bullet

Illustration 3-2: Trade ad for Merial's NexGard

Bayer Reinvents the Flea Collar

Illustration 3-3: New Seresto Collar from Bayer

Merck Unveils Bioactivation

Illustration 3-4: Trade Ad for Merck's Activyl

Competitors Challenge Hartz in the Mass Tier

Table 3-4: IRI-tracked Sales of Pet Medications, 2013

Focus on Retail Flea/Tick Brands

Central Garden & Pet Down for the Year

Illustration 3-5: Adams Smart Shield

Retail Brands and Fipronil

Illustration 3-6: Hartz First Defense Topical for Cats Website

Sergeant's Offers Array of Brands

Trends in Advertising and Promotion

Illustration 3-7: Screen shot of Bayer's PetParents.com web site

Illustration 3-8: Seresto Reminder Service with Coupon

Bayer

Central Garden & Pet

Ceva Animal Health

Illustration 3-9: Screen Shot from Vectra Website

Elanco

Illustration 3-10: Trade ad for Elanco's Trifexis promoting consumer awareness campaign

FidoPharm

Hartz

Merial

Illustration 3-11: Frontline Branding in Pet Rescue Saga

Sergeant's

Zoetis

Focus on Heartworm Medications

Growing Industry Concerns about Heartworm Treatments

New Directions in Heartworm Testing and Treatment

Advertising and Promotion

Illustration 3-12: Screen shot for Merial's JoinPowerOf12.com web site

Illustration 3-13: Trade ad for Virbac's Iverhart Max

Broad Spectrum Wormers

Trends in Developing Market Segments

Cancer

New Competitive Dynamics

Brain Health

Illustration 3-14: Pfizer CDSinDogs.com Website

Emotional/Behavioral Health

Market Pioneer: Clomicalm

Illustration 3-15: Screen Shot of Clomicalm Website

Reconcile: Prozac for Pets

Illustration 3-16: Screen Shot: Virbac Anxitane

Illustration 3-17: Screen Shot: Feliway L.O.V.E. Bus

Pain Management: A New Frontier

Major Brands

Illustration 3-18: Banner Ad for Merial's Previcox

Illustration 3-19: Screen Shot: Deramaxx Website

Illustration 3-20: Trade Ad for Abbott's OroCAM Spray-and-Go Formula

Illustration 3-21: Screen Shot: Onsior Pain Relief for Cats

Alternative Pain Treatments

Illustration 3-22: Screen Shot: Canna-Pet website for Canna-Cat and Canna-Canine

Pet Obesity and Diabetes

Slentrol

Illustration 3-23: Screen Shot: Zoetis Slentrol

Diabetes Support

Illustration 3-24: Screen Shot: Vetsulin Website

Illustration 3-25: Screen Shot: ProZinc Website

Heart Health

Illustration 3-26: Trade Ad for Boehringer Ingelheim Vetmedica's Vetmedin

Ear Infections

Illustration 3-27: Trade Ad for Virbac's EasOtic

Allergy Treatments Bloom

Illustration 3-28: Screen Shot: The Itch Cycle

Retail/OTC Pet Medications

Alternative Treatment Options

Homeopathic Remedies

Ear Cleaning Products

Table 3-5a: Selected Leading Pharmaceutical Marketers and Brands of Pet Medications: Product Type and Generic Drug Name, 2013

Table 3-5b: Selected Leading Pharmaceutical Marketers and Brands of Pet Medications: Status, Form, Animal Type and Description, 2013

Table 3-6: Selected Leading Retail Marketers and Brands of Pet Medications, 2013

Chapter 4: Retail Trends

Modern Consumers Challenge Distribution Structure

Channels Continue Diversification

Pethealth Tracks Channel Choices Among Pet Adopters

Online Channel Expands

Illustration 4-1: FetchRx's LivingSocial Promotion

Vet-VIPPS Participation Grows

Companies Create Online Pharmacies for Veterinary Practices

Illustration 4-2: Vets First Choice Home Page

PetMed Express Slumping, But Analysts Optimistic

Table 4-1: PetMed Express Sales, 2007-2013 (in millions of dollars)

Table 4-2: Share of PetMed Express Sales by Category: 2007, 2009, 2011, 2013 (percent)

Veterinarians Confront PetMed Express

Illustration 4-3: 1800PetMeds.com TV Commercial

Amazon's Wag.com Takes On PetMed Express

Illustration 4-4: Wag.com's Pet Medications home page

Target Emphasizes Pets

Illustration 4-5: PetRx on Target's website

Pet Meds at Walmart

Other Mass Retailers Join the Party

Illustration 4-6: Pet Department Endcap in Walgreens— "Pet Meds Covered"

Illustration 4-7: Pet Medications on Walgreens.com

Fairness to Pet Owners Act Dies, For Now

Flea & Tick Category Explodes in Pet Specialty Channel

Pet Specialty Online

Pet Specialty Eyeing Prescription Meds

Illustration 4-8: PetSmart.com's Pet Pharmacy

Supplements at Specialty Retail

Illustration 4-9: GNC Pet Multivitamin Plus

Illustration 4-10: Petco Brewer's Yeast & Garlic Tablets

Table 4-3: Selected Leading Third-Party E-tailers of Pet Medications, 2013

Chapter 5: Consumer Trends

Pet Medication Purchasing Patterns

74% of Dog or Cat Owners Use Flea/Tick Products

Table 5-1: Percent of Dog or Cat Owners Who Purchase Flea & Tick Care Medications or Medicated Products, 2010-2013 (U.S. dog- or cat-owning households in thousands)

Majority Of Pet Owners Choose Spot-On Flea/Tick Medications

Figure 5-1: Purchasing of Flea & Tick Care Medications: Share by Product Type, 2013 (percent of U.S. dog or cat owners)

Figure 5-2: Purchasing of Spot-On Flea & Tick Care Medications by Channel, 2013 (U.S. dog or cat owners)

Frontline Draws Almost Half of Spot-On Purchasers

Table 5-2: Share of Spot-On Flea & Tick Care Medication Purchasers by Brand, 2013 (U.S. dog or cat owners)

Natural Flea & Tick Product Usage

Demographics for Flea & Tick Brands

Table 5-3a: Index for Use of Flea/Tick Products by Brand, 2013 (U.S. dog- or cat-owning households)

Table 5-3b: Index for Use of Flea/Tick Products by Brand, 2013 (U.S. dog- or cat-owning households)

Sentinel Draws 38% of Oral Flea/Tick Medication Purchasers

Figure 5-3 Share of Oral Flea & Tick Care Medication Purchasers by Brand, 2013 (percent of U.S. dog or cat owners)

71% of Dog-Owning Households Use Heartworm Meds

Table 5-4: Index for Use of Heartworm Control Medications for Dogs, 2013

Figure 5-4: Purchasing of Heartworm Medications by Channel, 2013 (percent of U.S. dog or cat owners)

Heartgard Draws Half of Heartworm Medication Purchasers

Figure 5-5: Share of Heartworm Control Medication Purchasers by Brand, 2013 (percent of U.S. dog or cat owners)

Antibiotics Top List of Other Pet Medications

Table 5-5: Use by Type of Selected Other Pet Medications for Dogs and Cats, 2013 (percent)

Table 5-6: Purchasing by Channel of Selected Other Pet Medications for Dogs, 2013 (percent)

Table 5-7: Purchasing by Channel of Selected Other Pet Medications for Cats, 2013 (percent)

For Spot-On Flea/Tick, Pet Superstores and Mass Retailers Lead Brick & Mortar Retailers

Table 5-8: Purchasing of Spot-on Flea/Tick Care Medications by Retail Store or Channel: Dog Owners, 2013 (percent)

Amazon Shows Highest Online Draw

Table 5-9: Purchasing of Dog and Cat Medications by Online Source, 2013 (percent)

Benadryl Is Human OTC Med Most Commonly Used for Pets

Pet Med Psychographics

No General Trend Toward Increased Use of Pet Meds

Table 5-10: Levels of Agreement/Disagreement with Statement, "I Am Buying More Pet Medications Than I Used To": Dog Owners vs. Cat Owners, 2013 (percent)

Table 5-11: Levels of Agreement/Disagreement with Statement "The Current Range of Pet Medications Is Not Adequate": Dog Owners vs. Cat Owners, 2013 (percent)

Table 5-12: Levels of Agreement/Disagreement with Statement, "I Am Interested in New Types of Pet Medications": Dog Owners vs. Cat Owners, 2013 (percent)

Age- and Weight-Related Triggers for Pet Meds

Table 5-13: Levels of Agreement/Disagreement with Statement, "Age-Related Conditions Are the Cause of Some of the Pet

Medications That I Buy": Dog Owners vs. Cat Owners, 2013 (percent)

Table 5-14: Levels of Agreement/Disagreement with Statement, "Weight/Obesity-Related Conditions Are the Cause of Some of the Pet Medications That I Buy": Dog Owners vs. Cat Owners, 2013 (percent)

Attitudes on Veterinarian/Professional vs. Store Products

Table 5-15: Levels of Agreement/Disagreement with Statement, "I Trust the Pet Medications My Veterinarian Recommends": Dog Owners vs. Cat Owners, 2013 (percent)

Table 5-16: Levels of Agreement/Disagreement with Statement, "I Trust the Pet Medications Available at the Stores Where I Buy Pet Products": Dog Owners vs. Cat Owners, 2013 (percent)

Table 5-17: Levels of Agreement/Disagreement with Statement, "With Spot-On (Topical) Flea/Tick Products, the Products Available in Stores Are Just as Effective as Those Available Through Veterinarians": Dog Owners vs. Cat Owners, 2013 (percent)

Table 5-18: Levels of Agreement/Disagreement with Statement, "With Spot-On (Topical) Flea/Tick Products, I Would Trust Generic or Store-Brand Products if They Contained the Same Active Ingredients": Dog Owners vs. Cat Owners, 2013 (percent)

Table 5-19: Levels of Agreement/Disagreement with Statement, "Veterinarian-Dispensed Spot-On (Topical) Flea/Tick Products Are Too Expensive": Dog Owners vs. Cat Owners, 2013 (percent)

Resistance and Alternatives to Pet Meds

Table 5-20: Levels of Agreement/Disagreement with Statement, "I Avoid Using Pet Medications as Much as Possible": Dog Owners vs. Cat Owners, 2013 (percent)

Table 5-21: Levels of Agreement/Disagreement with Statement, "I Prefer to Try Holistic/Natural Pet Treatments Including Nutritional Supplements Before Resorting to Pet Medications": Dog Owners vs. Cat Owners, 2013 (percent)

Table 5-22: Levels of Agreement/Disagreement with Statement, "High-Quality Pet Foods Are Effective as a Preventive Pet Health Treatment": Dog Owners vs. Cat Owners, 2013 (percent)