Distribution Channels: Veterinary

| 4 minutes

As pharmaceuticals are heavily regulated, veterinary medicines are regulated but less so in most countries. And just as pharmaceuticals require a prescription by a doctor or pharmacist, veterinary medicines usually require a prescription by a veterinarian. Given this regulation, the channels through which veterinary medicines are administered and sold are limited mostly to veterinary clinics and hospitals, vet supply and feed stores and farmers. But due to being subject to less regulation than pharmaceuticals, veterinary medicines are sometimes easier to obtain and more readily available. Especially in developing countries, the gap in regulation between pharmaceuticals and veterinary is often greater.

Types of Veterinary Products

In general terms, and relative to AdvaCare’s veterinary range, our veterinary products can be divided into the following categories:

1. Veterinary medicines:

Various therapies of medicines for large and small animals available in 13 different dosage forms.

2. Veterinary vaccines:

Injectable vaccines that prevent infectious diseases by stimulating an animal’s immune system to produce protective antibodies.

3. Nutritional Supplements:

Vitamins, minerals and herbal nutrients for large and small animals available in various dosage forms.

Note: Vitamins and minerals in injection form are classified as veterinary medicines. Also, many veterinary medicines will include vitamins and minerals, but are still classified as medicines.
4. Veterinary medical devices:

Medical devices that are for veterinary use.

What is Product Registration?

In most countries, it is still required that a veterinary medicine, and sometimes the manufacturing facility as well, must be “registered”. This is often a lengthy process, which can take between 6 months to 2 years depending on the country, in which AdvaCare has to submit a compilation of many various technical documents, called a dossier, along with product samples, to the local health authority (FDA, Ministry of Agriculture or other name of the national agency for veterinary drug enforcement).

Once the process is completed, the distributor can import our registered veterinary products, and start to distribute through various channels. The distribution channels through which veterinary products get from AdvaCare to the end consumer, being the farmer, can vary.

Unique Dynamics of our Veterinary Range

Veterinary products are a strategic priority for AdvaCare as we foresee substantial growth in this sector. Given somewhat less competition compared to pharmaceuticals and medical devices, less sensitivity to many of our vet medicines being made in China and our capability to leverage our strengths in marketing and branding, we have the ability to significantly grow our veterinary business.

Although obvious, yet still notable, it is important to remember that while patients and animals are both the end consumer of the products, it is the farmer that is the decision maker as animals do not decide which products they consume.

Advantages vs. Disadvantages

Before getting started with the details of our Distribution Channels, it is important to understand the competitive advantages and disadvantages of our veterinary product range:

VETERINARY
ADVANTAGES DISADVANTAGES
  • USA brand with competitive price points.
  • Veterinary medicines are less sensitive than pharmaceuticals to the sometimes negative “Made in China” image, which coupled with our USA brand gives us a strong marketing position.
  • Both an advantage and disadvantage, veterinary medicines are a bit less competitive than pharmaceuticals in terms of number of manufacturers, and therefore offer more opportunity for growth.
  • Manufacturers cannot produce such a wide scope of dosage forms, usually 5-10 forms at most because each form requires a production line. AdvaCare has ~250 veterinary products in 16 dosage forms and medical devices as well.
  • Manufacturers are restricted to countries for which they have sufficient certifications to meet regulatory requirements. AdvaCare has a wide network of manufacturers to match certifications to country requirements.
  • CMOs (Contract Manufacturing Organizations) are not organized or have sufficient infrastructure to undertake the complexity of coordinating hundreds of data points: products, countries, certifications, etc. AdvaCare is well organized with substantial infrastructure.
  • CMOs lack in-house regulatory capability. AdvaCare has a dedicated Regulatory Affairs Dept.
  • China and India-based manufacturers are respectively limited to the products which they are strong for production China is generally a larger producer of veterinary medicines, but India is still a player. AdvaCare can leverage both China and India.
  • Some distributors only want to work directly with manufacturers because they perceive prices to be more competitive. Veterinary manufacturers tend to be more competitive on prices than for pharmaceuticals, making price points a more difficult challenge to overcome for us. However, AdvaCare has a wide manufacturing network to leverage lower cost options.
  • Veterinary medicine manufacturers generally produce a wider range of dosage forms than pharmaceutical manufacturers, so our advantage in a wide product range is more diminished than for pharmaceuticals.
  • Some distributors want to work directly with manufacturers because they perceive decreased risk with quality control as another party in between manufacturing and the distributor can create more barriers for reimbursement.
  • Some distributors want to work directly with manufacturers because they perceive product registration to be more direct without the involvement of a third party in between the manufacturer and distributor.
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