The U.S. Market for Pet Medications: Prescription and Over-the-Counter Remedies as Consumer Products

Oct 1, 2008
254 Pages - Pub ID: LA1655768
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At the center of robust global animal health product growth, the U.S. market for pet medications is going gangbusters, with continued double-digit sales gains predicted for the foreseeable future as all of the world’s largest pharmaceutical companies move full-force into the segment, adapting human technologies and developing pet-specific ones. Also driving market growth are the aging pet population and rising rates of pet overweight/obesity, spurring the need for new product types. Although antiparasitics (flea/tick products and heartworm remedies) remain at the core of the market—Merial’s Frontline (fipronil) achieved “blockbuster” billion-dollar status in 2007, and Bayer’s Advantage is also going strong—companies are now branching out with new consumer-targeted pet medications, such as Pfizer’s Slentrol for weight-loss and Eli Lilly’s Reconcile for separation anxiety.

Bringing in broad pet market perspective based on more than a dozen other pet market reports, along with a unique “cross-market” focus examining trends in both the veterinary (pharmaceutical) and retail (OTC) sectors, this all-new report from Packaged Facts analyzes the market for medications for dogs and cats, with a particular focus on products marketed directly to consumers. Areas covered include parasite prevention and control (flea, tick, heartworm, etc.), pain management (focusing on non-steroidal anti-inflammatory drugs), mood disorders, overweight/obesity, cognitive dysfunction and oral care. Top U.S. marketers profiled include all of the largest pharmaceutical companies (Pfizer, Intervet-Schering, Bayer, Fort Dodge, Novartis, etc.) as well as the top marketers of retail pet health lines (Central Garden & Pet, Hartz, Sergeant’s).

Other high-interest areas examined in this report—all from the perspective of their potential impact on future market performance—include product diversion outside the veterinary channel, growth of online retailing via outfits including PetMed Express, the effects of the 2008 economic crisis, and the possibility of ethical brands’ moving officially into retail channels. Retail sales are quantified and projected forward through 2012, while the retail performance of pet medication marketers and brands is evaluated using Information Resources, Inc. InfoScan Review data. In addition, uniquely cross-tabulated consumer survey data from Simmons Market Research Bureau provides penetrating insight into pet medication consumer usage rates, demographics and psychographics.

Chapter 1: Executive Summary
Scope and Methodology
Market Definition
Definition of Ethical Products
Product Regulation
Report Methodology
Market Size Estimates
Consumer Trends
The Market
Animal Health Products a Massive Global Market
Figure 1-1: Share of Global Animal Health Sales: Production Animal vs. Companion Animal, 2003, 2007 and 2012 (percent)
U.S. Pet Medications Market Posting Healthy Retail Sales
Market Drivers
The Aging Pet Population
Pet Market Humanization
Premium Demographics
Pet Overweight, Obesity
Pet Insurance
Economic Factors
Risk and Criticism
Marketing Trends
Marketer Classifications: Pharmaceutical vs. Retail
Top Global Pharmaceutical Marketers Lead U.S. Market
Leading Retail Marketers
Priority No. 1: Building Consumer Brands
Antiparasitics: The Consumer Pet Medication Core
Veterinary Brands Rule the Roost
Top Retail Brands in Mass and Pet Specialty Channels
Developing Market Segments
Retail Pet Medications
Consumer Trends
Half of Households Keep Dogs or Cats
71% of Dog or Cat Owners Use Pet Meds
Figure 1-2: Percent of Dog or Cat Owners Who Purchase Pet Medications, 2008 (U.S. dog- or cat-owning households)
55% Use Spot-On Flea Prevention
Frontline Tops Hartz as Most Popular Flea/Tick Brand Line
Southeast, Southwest Strongest for Spot-On Flea Medications
Chapter 2: The Market
Market Size and Composition
Animal Health Products a Massive Global Market
Figure 2-1: Global Sales of Animal Health Products at the Manufacturers Level: 2003 vs. 2007 (in billions of dollars)
Sales by Classification
Sales by Region
Sales Shifting Toward Companion Animals
Figure 2-2: Share of Global Animal Health Sales: Production Animal vs. Companion Animal, 2003, 2007 and 2012 (percent)
U.S. Pet Medications Market Posting Healthy Retail Sales
Figure 2-3: U.S. Retail Sales of Pet Medications: 2003 vs. 2007 (in billions of dollars) Consumer Usage Rates of Pet Medications
Figure 2-4: Percentage of Dogs and Cats Given Medication and/or Drugs: 2000-2006 (percent)
Usage of Dog Medications by Type
Table 2-1: Types of Medication/Drugs Given to Dogs and Percentage Obtaining from Veterinarian, 2006 (percent of dog owners)
Usage of Cat Medications by Type
Table 2-2: Types of Medication/Drugs Given to Cats and Percentage Obtaining from Veterinarian, 2006 (percent of cat owners)
Percentage of Pet Medication Users Procuring Though Veterinarians
Dog and Cat Health Product Share of Independent Pet Specialty Retailer Sales
Table 2-3: Share of Independent Pet Store Dog Product Sales by Category, 2005-2007 (percent)
Table 2-4: Share of Independent Pet Store Cat Product Sales by Category, 2005-2007 (percent)
Market Outlook
Focus on Health a Key Driver Across All Pet Market Segments
Figure 2-5: Distribution of $25.3 Billion U.S. Pet Healthcare Market, 2007 (percent)
Aging Pet Population Underpins Healthcare Boom
Figure 2-6: Percentage of Dogs and Cats Age 6 and Over: 1996 vs. 2006 (percent)
Humanization a Three-Pronged Force Human/Animal Bond a Potent Force
Table 2-5: Mean Number of Veterinary Visits by Human- Animal Bond Among Dog and Cat Households, 2006
Table 2-6: Mean Veterinary Expenditures by Human-Animal Bond Among Dog and Cat Households, 2006 (in dollars)
Human Company Cross-Over, Marketing Muscle
Human Product Cross-Over
Premium Demographics Willing and Able to Spend
Figure 2-7: Share of Total U.S. Pet Market Expenditures: $70K+ vs. Under $70K Income Brackets: 1996, 2001 and 2006 (percent)
Table 2-7: $70K+ Income Bracket Share of U.S Pet Supplies and Veterinary Services Expenditures, 1996-2006 (percent)
Number of Dog and Cat Households on the Ups
Figure 2-8: Household Penetration Rates for Selected Dog- or Cat-Owning Classifications, 2003 vs. 2008 (percent of U.S. dog- or cat-owning households) Rising Rates of Pet Overweight, Obesity
The Veterinary Factor
Table 2-8: Most Important Factor in Dog and Cat Flea/Tick Product Selection, 2006 (percent of dog and cat owners) Pet Owners Visiting Veterinarians More Often
Table 2-9: Caring for a Pet’s Health: Veterinarian Visits, Expenses and Services Received, 2006 (number, percent and dollars)
Table 2-10: Average Annual Consumer Expenditures on Veterinary Services, 1996-2006 (in dollars)
Ethical Product Diversion and Veterinarian Discontent
Pet Insurance Boom a Good Sign for Pet Medications
Competition from Pet Supplements
Supplements on the Ups
Figure 2-9: U.S. Retail Sales of Pet Supplements and
Nutraceutical Treats, 2003, 2007 and 2012 (in millions of dollars)
Veterinary Usage of Supplements Expanding
Natural Pet Products Going Strong
Figure 2-10: U.S. Retail Sales of Natural Pet Products, 2003, 2007 and 2012 (in millions of dollars)
Impact of U.S. Economic Downturn
Table 2-11: Percentage of Adults with Little or No Confidence in Short-Term Prospects for the Economy, April 2003-April 2008 (U.S. adults)
Table 2-12: Percentage of Adults Who Are More Practical or Realistic in Their Purchases, Month Over Month: October 2007-April 2008 (U.S. adults)
Risk and Criticism
Looking Ahead
Illustration 2-1: Nestlé Purina’s Friskies Flea Repellent Drops (France)
Figure 2-11: Projected U.S. Retail Sales of Pet Medications: 2007 vs. 2012 (in billions of dollars)
Chapter 3: Marketing Trends
Competitive Overview
Marketer Classifications: Pharmaceutical vs. Retail
Top Global Pharmaceutical Marketers Lead U.S. Market
Table 3-1: Global Animal Health Sales of Top U.S. Marketers of Pet Medications, 2005-2007 (in millions of dollars)
Pharmaceutical Companies Consolidating
Human Cross-Over Synergies
Summit VetPharm Taps in with Unique Approach
Leading Retail Marketers
Second-Tier Retail Marketers and Specialists
Natural Product Marketers
Retail Market Also Consolidating
Priority No. 1: Building Consumer Brands
Pharmaceutical Companies Also Market to/Through Vets
The Problem of Product Diversion
The Internet Effect
Figure 3-1: Use/Influence of the Internet: Adults Overall vs. Dog or Cat Owners, 2007 (percent of U.S. adults overall vs. dog or cat owners)
Online Pet Pharmacies Competing Directly with Veterinarians
Retail Product Marketers Also Active Online
PetMed Express, Inc.
Overview
Table 3-2: PetMed Express Sales, 2004-2008 (in millions of dollars)
The PetMed Express Product Focus
Table 3-3: Share of PetMed Express Sales by Category, 2006- 2008 (percent)
Marketing and Advertising
Table 3-4a: Selected Leading Pharmaceutical Marketers and
Brands of Pet Medications: Product Type and Generic Drug Name, 2008
Table 3-4b: Selected Leading Pharmaceutical Marketers and
Brands of Pet Medications: Status, Form, Animal Type and Description, 2008
Table 3-5: Selected Leading Retail Marketers and Brands of
Pet Medications, 2008
Table 3-6: Selected Leading Third-Party E-tailers of Pet
Medications, 2008
Focus on Antiparasitics
Overview: The Consumer Pet Medication Core
Veterinary Brands Rule the Roost
Three Drug Companies Enter Market in 2007
Illustration 3-1: Trade Ad for Fort Dodge’s ProMeris(Veterinary Forum, March 2008)
“Prescription” Appeal
Figure 3-2: National Consumer Advertising Spending for Frontline and K9 Advantix, 2006 and 2007 (in millions of dollars)
Illustration 3-2: Online Printable Coupon for Merial’s Frontline
Illustration 3-3: Animal Hospital Coupon Mailer for Merial’s Frontline and Heartgard
New Ethical Products Focus on Anti-Diversion
Bayer Launches Prescription Version of Advantage
Top Retail Brands Inhabit Mass and Pet Specialty Channels
Central Garden & Pet Brands Lead Pet Specialty Channel
Table 3-7: Top Marketers of Flea/Tick Products in Pet Specialty Retailers, 2006 and 2007 (percent)
Hartz and Sergeant’s Brands Lead in Mass-Market Channels
Table 3-8: IRI-Tracked Sales of Pet Medications & Related Pet Healthcare Products, 2007 vs. 2008 (in millions of dollars)
Table 3-9: IRI-Tracked Sales of Pet Medications and Related Pet Healthcare Products, 2003-2007 (in millions of dollars)
Hartz Phases Out Advanced Care Spots-Ons
Hartz and Sergeant’s Launch Pet Specialty Lines
OTC Brands Take on Ethical
Illustration 3-4: Trade Ad for Sergeant’s Gold Flea/Tick Squeeze-Ons (Pet Business, June 2007)
Illustration 3-5: Trade Ad for Hartz’s UltraGuard Flea & Tick Drops (Pet Business, February 2008)
Illustration 3-6: Trade Ad for Central Garden & Pet’s Bio Spot Retail Flea/Tick Line (PET AGE, April 2007)
Illustration 3-7: Trade Ad for Central Garden & Pet’s Adams Plus Retail Flea/Tick Line (Pet Business, March 2007)
Channel Cross-Over and Exclusivity
Consumer Marketing Trends and Themes
Consumer Websites
Product Effectiveness
Illustration 3-8: Consumer Ad for Merial’s Frontline Plus (AKC
Family Dog, July/August 2008)
Proprietary Ingredients
Multifunction/Extra Benefits
Illustration 3-9: Sergeant’s Sentry Pro XFC Flea/Tick Squeeze-
Ons
Convenience, Packaging
Pest-Control “Systems”
Illustration 3-10: Trade Ad for Hartz’s InControl Flea/Tick Line (Pet Business, February 2007) Wide Product Lines
Illustration 3-11: Trade Ad for Central Garden & Pet’s Zodiac Flea/Tick Line (PET AGE, April 2008)
Illustration 3-12: Consumer Ad for Bayer’s Advantage and K9 Advantix Products (AKC Family Dog, July/August 2008)
Value
Spotlight on Safety
Illustration 3-13: Trade Ad for Sergeant’s WormXPlus Wormer
Going Natural
Focus on Developing Market Segments
Pain Management and NSAIDs
Merial’s Previcox Is Newest Market Entrant
Illustration 3-14: Trade Ad for Merial’s Previcox NSAID
(Veterinary Forum, March 2008)
Veterinary Advertising
Illustration 3-15: Trade Ad for Pfizer’s Rimadyl NSAID
(Veterinary Forum, March 2008)
Illustration 3-16: Trade Ad for Vetoquinol’s Vetprofen NSAID
(Veterinary Forum, March 2008)
Building Consumer Awareness, Brands
Mood Disorders
Novartis and Clomicalm
Eli Lilly and Reconcile
Illustration 3-17: Trade Ad for Eli Lilly’s Reconcile (Veterinary
Practice News, July 2008)
Obesity/Overweight and Diabetes
Pfizer Debuts Slentrol
Marketing Appeals
Illustration 3-18: Consumer Ad for Pfizer’s Slentrol (Martha
Stewart Living, Spring 2008)
Illustration 3-19: Trade Ad for Pfizer’s Slentrol (Veterinary
Forum, March 2008)
Slentrol Goes Abroad
Diabetes Support
Illustration 3-20: Trade Ad for Intervet-Schering’s Vetsulin
(Veterinary Practice News, June 2008)
Cognitive Dysfunction
Oral Care
Retail Pet Medications
Illustration 3-21: Doctors Foster & Smith OTC Itch Stop Line
Chapter 4: Company Profiles
Bayer Animal Health
Overview
Advantage Key to Segment Sales
Table 4-1: Bayer Consumer Health Segment Sales by Division: 2006 vs. 2007 (in millions of dollars)
Bayer Launches Animal Health MBA Education Program
Bayer AG Corporate Overview
Central Garden & Pet
A Top Multi-Category Pet Market Player
CG&P Acquires Farnam
Central Life Sciences Fields Important Proprietary Molecules
Elanco Animal Health (Eli Lilly and Company)
Overview
Company Launches New Companion Animal Group
Eli Lilly and Company
Table 4-2: Eli Lilly and Company Sales, 2005-2007 (in millions of dollars)
Fort Dodge Animal Health
Overview
Companion Animal Sales Growing
Table 4-3: Fort Dodge Animal Health Sales by Segment, 2004- 2007 (in millions of dollars)
Wyeth Corporate Background
Table 4-4: Wyeth Sales by Division, 2004-2007 (in millions of dollars)
Hartz Mountain Corp
A Top U.S. Pet Care Brand
Table 4-5: IRI-Tracked Sales and Market Share of Hartz Mountain Pet Supplies, 2003-2007 (in millions of dollars)
Disappointing Returns
Looking Abroad
Intervet-Schering-Plough Animal Health
Schering-Plough Acquires Intervet
Schering-Plough Corporate Overview
Table 4-6: Schering-Plough Sales by Division, 2005-2008 (in millions of dollars)
Merial Limited
Company Structure and Sales
Figure 4-1: Merial Limited Global Sales, 2005-2007 (in millions of dollars)
Companion Animal Product Types and Brands
A Joint Venture
Novartis Animal Health
Overview
Novartis AG Corporate Background
Table 4-7: Novartis Group Sales Growth, 2003-2007 (in millions of dollars)
Pfizer Animal Health
Overview
Revolution, Rimadyl Lead Companion Animal Sales
Table 4-8: Pfizer Animal Health Sales by Animal Type, 2005- 2007 (in millions of dollars)
Pfizer Corporate Overview
Table 4-9: Pfizer, Inc. Sales by Division, 2005-2007 (in millions of dollars)
Sergeant’s Pet Care, Inc.
Overview
Table 4-10: IRI-Tracked Sales and Market Share of Sergeant’s Pet Care, 2003-2007 (in millions of dollars)
Bulking Up Through Acquisitions
Focusing on Flea and Tick
Sergeant’s Expands “Look at the Label” Educational Campaign
Chapter 5: Consumer Trends
Overview of Pet Owners
Notes on Simmons Data
Half of Households Keep Dogs or Cats
Figure 5-1: Household Ownership Rates for Selected Dog- or Cat- Owning Classifications, 2008 (percent and number of U.S. dog- or cat-owning households) Ownership Rates Edge Up
Figure 5-2: Household Penetration Rates for Selected Dog- or Cat-Owning Classifications, 2003 vs. 2008 (percent of U.S. dog- or cat-owning households)
Retail Shopping Patterns for Pet Products
Figure 5-3: Retail Shopping Patterns for Pet Products, 2008 (percent and number (000) of U.S. dog- or cat-owning households)
Pet Owners on the Web
Shopping Psychographics
Figure 5-4a: Use/Influence of the Internet: Adults Overall vs. Dog or Cat Owners, 2007 (percent of U.S. adults overall vs. dog or cat owners)
Figure 5-4b: Use/Influence of the Internet: Adults Overall vs. Dog or Cat Owners, 2007 (index for U.S. dog or cat owners)
Figure 5-5: Dog or Cat Owners as Consumers: Selected Shopping Psychographics, 2008 (percent and index for U.S. dog or cat owners)
Figure 5-6: Dog or Cat Owners as Consumers: Selected Media & Marketing Psychographics, 2008 (percent and index for U.S. dog or cat owners)
Figure 5-7: Dog or Cat Owners as Consumers: Selected “Green” Psychographics, 2008 (percent and index for U.S. dog or cat owners)
Pet Owner Demographics
Figure 5-8: Dog Ownership Rates by Household Income Bracket, 2008 (percent of U.S. dog-owning households)
Table 5-1: Dog or Cat Ownership Rates by Age Bracket, 2003 vs. 2008 (percent of U.S. dog- or cat-owning households)
Table 5-2: Demographics for Dog or Cat Ownership, 2008 (percent, number, and index among U.S. dog- or cat-owning households)
Table 5-3: Demographics for Dog Ownership, 2008 (percent, number, and index among U.S. dog-owning households)
Table 5-4: Demographics for Cat Ownership, 2008 (percent, number, and index among U.S. cat-owning households)
Purchasing Rates for Pet Medications
71% of Dog or Cat Owners Use Pet Meds
Figure 5-9: Percent of Dog or Cat Owners Who Purchase Pet Medications, 2008 (U.S. dog- or cat-owning households)
Figure 5-10: Number of Dog or Cat Owners Who Purchase Pet Medications, 2008 (U.S. dog- or cat-only households in thousands)
Usage Up Across the Board
Figure 5-11: Percent of Dog or Cat Owners Who Purchase Pet Medications, 2003 vs. 2008 (U.S. dog- or cat-owning households)
Figure 5-12: Percent of Dog or Cat Owners Who Purchase Pet Medications, 2003 vs. 2008 (U.S. households owning dogs only or cats only)
55% Use Spot-On Flea Prevention
Figure 5-13: Percent of Dog or Cat Owners Who Purchase Flea/Tick Products by Type, 2008 (U.S. dog- or cat-owning households)
Frontline Tops Hartz as Most Popular Flea/Tick Brand Line
Figure 5-14: Usage Rates for Selected Flea Prevention or Treatment Brand Lines/Marketer (Product Range), 2003 vs. 2008 (percent of U.S. dog- or cat-owning households)
Figure 5-15: Percent of Dog and Cat Owners Obtaining Heartworm and Flea Medications from Veterinarians: Dog vs. Cat Products, 2006 (U.S. dog or cat owners)
Pet Med Psychographics
Alternative Streak Among Cat Owners
Store Brands Over $$$ Brands
Figure 5-16: Selected Healthcare Psychographics for Pet Owners and Pet Med Buyers, 2008 (percent for U.S. adults overall, dog or cat owners, and pet medication buyers)
Figure 5-17: Selected Healthcare Psychographics for Pet Owners and Pet Buyers, 2008 (index for U.S. dog or cat owners and pet medication buyers)
Figure 5-18: Levels of Agreement or Disagreement With Statement, OTC Store Brands Work Just Like Advertised Brands: Selected Brand Lines and Product Types, 2008 (percent of U.S. adults overall vs. dog or cat owners and pet medication purchasers)
Figure 5-19: Levels of Agreement or Disagreement With Statement, Most Expensive Medications Are Usually the
Best: Selected Brand Lines and Product Types, 2008 (percent of U.S. adults overall vs. dog or cat owners and pet medication purchasers)
Pet Med Demographics
Southeast, Southwest Strongest for Spot-On Flea Medications
Distinct Demographics for Frontline
Figure 5-20: Top Demographic Indicators for Use of Frontline Spot-On Flea Medication, 2008 (percent and index of U.S. dog- or cat-owning households)
Figure 5-21: Top Demographic Indicators for Use of Hartz Flea Products, 2008 (percent and index of U.S. dog- or catowning households)
Demographics for Heartworm Products: Dog vs. Cat Owners
Figure 5-22: Usage Rates for Dog or Cat Heartworm Medications by Age Bracket of Pet Owner, 2008 (percent and index for U.S. dog and cat owners)
Table 5-5: Demographics for Use of Spot-On Flea Medications for Dogs or Cats, 2008 (percent, number, and index among U.S. dog- or cat-owning households)
Table 5-6: Demographics for Use of Heartworm Medications for Dogs, 2008 (percent, number, and index among U.S. dog-owning households)
Table 5-7: Demographics for Use of Heartworm Medications for Cats, 2008 (percent, number, and index among U.S. catowning households)

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