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Prescription-Only Veterinary Medicines – Consultation on Proposed Order:
The Kennel Club’s Response

The KC welcomes the Department of Trade and Industry’s draft legislation to implement the remedies recommended in the 2003 Competition Commission report on the supply of prescription-only veterinary medicines (POMs). The KC also welcomes measures to open up competition within the POM market in order to provide customers with affordable POMs, thereby increasing the likelihood of suffering animals receiving treatment. The KC believes that the DTI can further achieve this goal by amending the draft legislation in the following areas.

Charging Clients for Writing Prescriptions

Paragraph 2.11: "For three years, veterinary surgeons will not be able to charge a client for writing a prescription. But they will be able to recover the costs they incur in giving prescriptions (for example by including an amount in their consultation fees)…"

The KC does not believe that the ‘three year’ proposal is compatible with the overall tone of the proposed legislation, drafted to "be of particular benefit to owners of animals requiring long-term medication" (paragraph 37, Draft Regulatory Impact assessment) and "result in lower prices…benefiting animal owners" (paragraph 48, Draft Regulatory Impact Assessment).

Paragraph 9 of the Draft Regulatory Impact Assessment further strengthens the argument that clients should not be charged for vets writing prescriptions: "The availability of free prescriptions should open up the market generating scope for pharmacies to significantly increase their involvement…The buying power of pharmacy operations is likely to have direct and indirect benefits for animal owners as it has the potential to apply very real pressure on the POM manufacturers and wholesalers, allowing them to offer lower prices. This will…exert pressure on existing suppliers to veterinary surgeries who, to protect their market share will need to lower their prices and exert increased pressure on their supply chain and ultimately the POM manufacturers – again to the benefit of the animal owner" (paragraph 9, Draft Regulatory Impact Assessment).

By the Department of Trade and Industry’s own admission that "such developments will not happen over night" (paragraph 9, Draft Regulatory Impact Assessment), the KC believes that to reverse the draft legislation after three years (or at any point in the foreseeable future) is unjustified on the grounds that noticeable changes may well be reversed soon after they come about. The KC views the proposed legislation as drafted to be appeasing veterinary surgeons whose revenue would be likely to increase after the necessary three year suspension on prescription charges and therefore recommends prescription charges be abolished.

Realigning Professional Fees

Paragraph 9 of the Draft Regulatory Impact Assessment: "Each veterinary practice will need to make its own decisions on whether to realign its professional fees in the light of steps to open up POM supply to competition"

The KC remains concerned that despite the fact that paragraph 9 goes on to state: "There is no reason to believe that any increase in professional fees need to be greater than the actual profit foregone on lost POM sales" there are no provisions in the draft legislation to restrict this.

Further, the KC would argue that if any increase in professional fees were equal to the actual profit foregone on lost POM sales the total cost to the consumer would not change.

To illustrate:

In addition, should the DTI ignore the KC’s comments on imposing only a three-year ceiling for veterinary surgeons not being able to charge for writing out prescriptions, costs to the customer (and revenue of veterinary surgeons) will likely increase further. The KC is concerned that once three years has elapsed, veterinary fees will remain constant and consumers will have to pay an additional cost for the prescription to be written out – despite the fact that the profit lost from the lack of prescription charging would already be accounted for in the veterinary surgeon’s fee.

Prescribing Emergency POMs

Paragraph 27 of the Draft Regulatory Impact Assessment: "Veterinary surgeons are not required to comply with the obligations to advise clients of the price of POMs, the availability of, and charge for, prescriptions and the costs relating to repeat prescriptions in emergency situations where, in the view of the veterinary surgeon, it would not be reasonable on the grounds of animal health or welfare to delay the supply and administration of the POM until such advice could be given.
Further veterinary surgeons are not required to comply with the obligation to advise clients of the availability of and charge for, prescriptions where the POM to be supplied is to be administered by injection and is only available in packs containing multiple doses".

While the KC accepts that in the case of an emergency, in the interests of an animal’s well-being, veterinary surgeons should be able to administer POMs without having to consult with clients about their price, the veterinary surgeon should consult with clients about the cost and necessity of their actions following this. This would ensure POMs are not administered unnecessarily or at an unreasonable cost. Further, to ensure clients continue to treat suffering animals as veterinary surgeons recommend, the KC propose that drugs used in cases of emergencies (and long-term drugs) be available at lower prices by prescription.

Self-Regulation

The KC agrees with the DTI’s statement in paragraph 22 of the Draft Regulatory Impact Assessment: "It is envisaged that the Royal College of Veterinary Surgeons would not stop veterinary surgeons from charging for prescriptions for three years and therefore this remedy would have to be implemented by Order". The KC recommends that in the interests of consistency, the DTI follow the route of legislation rather than self-regulation.

Summary

The KC recommends:

Abolishing veterinary surgeons charges to write prescriptions. The KC does not deem this to be unreasonable given that around 20% of veterinary surgeons do not currently charge for prescriptions (paragraph 44, Draft Regulatory Impact Assessment).

Imposing a ceiling on how far veterinary surgeons can realign professional fees in light of this; fee increases should not account for incorporation of the prescription fee but rectify the veterinary surgeon’s supposed tendencies to undercharge for their professional services.

The DTI undertake an inquiry into the claim that veterinary surgeons do undercharge for their professional services.

Drugs used in cases of emergencies and long-term drugs are available at lower prices by prescription.