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CHAPTER 1: BACKGROUND

In the animal health field the term over-the-counter (OTC) medicines commonly describes products that can be sold without the issuing of a prescription by a veterinarian. Therefore, they can be sold through retail outlets to members of the public, including commercial farmers and companion animal owners. This report focuses on companion animal products sold to consumers rather than products for commercial livestock. The sector is small compared to the total market, but has significant commercial potential for the following reasons:

·         The products are branded, allowing premiums to be charged, brand loyalty to be developed and brands to be leveraged from other products, eg pet food.

·         There is scope for innovation in terms of packaging and delivering methods (eg dermal and oral applications, flavouring, etc).

·         Since the product is sold and used in small volumes, relatively high prices per unit of active ingredient can be charged.

·         As consumers gain more knowledge and take more responsibility for their pet’s health – along with their own health – they are more likely to buy OTC products rather than visit their vet. An important aspect that might contribute to the former option is the desire to save money.

·         The restrictions that apply to the advertising and marketing of medicinal products are chiefly not relevant for OTC products. Therefore, modern channels such as the Internet provide scope for both marketing to consumers (through the provision of technical and brand information) and product supply (through online sales).

The OTC sector is not currently well defined and may include both pharmaceutical products, such as antiparasitics, and non-pharmaceuticals, such as nutritional supplements and certain cosmetics. The following is an overview of the main product segments within the OTC sector:

1.       Pharmaceuticals

·         Flea and tick control (ectoparasiticides)

·         Worming products (endoparasiticides)

2.       Nutritional supplements

·         Vitamins/minerals

·         Other essential nutrients such as amino acids, fatty acids, antioxidants

·         Joint supplements (chondroprotective agents)

3        Non-pharmaceutical medicated animal care products

·         Shampoos and sprays

·         Ear and eye products

·         Dental products

·         Other remedies based for instance on herbal compositions (eg laxatives, anti-diarrhoea products, breath tablets)

Obviously, there are wide variations from country to country as to which of the products in any of these segments would be classified as OTC, depending on the substance classes of the active ingredients. Also, in many markets the differentiation between OTC and prescription-only is not very clear and various intermediate legal levels are used. In some countries there are various categories of OTC animal health products, including those that can be sold from any outlet, those that can be sold only from stores that fulfil certain criteria and have specifically trained staff and those that can be sold only through drug stores, pharmacies or veterinary practices.

For the purpose of this report, OTC products are defined as:

‘medicinal products and other animal health products, which do not require a veterinary prescription’.

The terms ‘OTC products’ and ‘non-prescription products’ are therefore used synonymously. Chapter 4 considers the legal classification of OTC products in the major markets.

Prescription animal health products can only be supplied by vets or pharmacies. OTC products can of course be sold by any retailer or supplied by mail order. A number of sales channels thus compete for market share. These include small, usually privately owned pet shops, large chain pet shops, high street and out-of-town supermarkets, farmers’ shops, garden centres, pharmacies and veterinary practices. The importance of each channel varies between countries, and sometimes between regions within in a country.

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