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8.18.2004
Pricing of Pet Meds
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In a David Brooks moment this weekend, three fairly-well-to-do professionals in their upper-30s talk around the barbecue grill about how much they are paying (and hence willing to pay) for Rimadyl, an arthritis drug for their aging dogs. The answer to this question is: we were willing to, and do, pay quite a lot. Not only does Rimadyl work wonders for my aging golden retriever, but it has a tasty liver flavor.
With price controls becoming more and more pervasive on human drugs, it is not hard to imagine two phenomena becoming more pervasive in the drug industry. First, drug companies will have to use their pet division medications which have human analog meds to more successfully price discriminate on the basis of willingness to pay. Perversely, the higher willingness to pay will come in the pet arena. Second, research will be shifted from human to animal drugs, at least on the margin, because price controls do not threaten what will be an increasingly robust pet med market. Admittedly, the market is smaller, but I can have some confidence that my next golden retriever (not that this one will ever die, of course, since I'll fly her to the doggie Mayo clinic for care) will be the catalyst to better arthritis drugs, much more so than the innovation-stunting Canadian price control system.
posted by Ray : 8/18/2004 09:29:47 AM
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