We took her to our local vet, who established that her known osteoarthritis had flared up acutely, and that her immobility was the result of inflamed, painful joints. An overnight stay for rehydration and parenteral analgesia, and she was much improved.
I took the call when the veterinarian contacted us with the diagnosis, and where she asked permission to initiate treatment. We have socialised medicine in the UK, but of course this is for owners and not their pets: she was seeking financial – as well as medical – consent. During the conversation, she recommended treatment with a subcutaneous analgesic called Librela (bedinvetmab: Zoetis, UK), a monoclonal antibody that targets nerve growth factor (NGF) and is given monthly.
I paused. In my world of human pharma, many of the monoclonals I have worked on are priced in four figures – if not five – per month. I love my dogs dearly, but could I afford to pay those sums of money, as her pet insurance only covered a certain amount?
I asked the question I didn’t want to ask: “What sort of cost are we talking about?”. “Around 120 pounds a month,” came the reply. Thankfully, that was a no-brainer: even if not covered by the insurance (it turns out it was), I could find a way to pay for this. After I put the phone down, grateful that Tilly was getting great care and was on the mend, the obvious question popped into my head: “Why is this monoclonal antibody 10 times less expensive than the human ones I have been involved with?” I set out to find answers…
The “answers” are myriad and oblique. One unifying theme, however, is that we pay for what we value. The contours of that ethical and sociopolitical design may differ based on a variety of tangible and not-so-tangible inclinations. The idea, however, holds true: What we value drives access, regulations, competition, and all the downstream effects therein.
This is not a new concept. Of course, you pay for what you value. But the economics of this market, fellow dog lovers, is a bit labyrinthian.
Here's what I found: The first observation is that veterinary medicine isn’t a homogeneous entity. There is a big difference between treating pets (“companion animals”) versus livestock. The latter has welfare issues, and of course potential human health consequences because of the food chain. The former has more subjectivity within it: treatment choices based on owners’ preferences (including cultural differences in attitudes towards companion animals) and affordability. The market in human pharma isn’t devoid of such pricing considerations by any means, and there are substantial disparities between different parts of the world regards to healthcare access.
In fact, there are certain drugs that will cost more for pets than they do for their owners. A 2018 report by the Animal Medicines Australia titled "Pet Medicines in Australia: A National Survey of Prices and Affordability" found that pet medications in Australia were generally more expensive than comparable human medications, with some pet medications costing up to ten times more than the human equivalent.
However, a study published in the Journal of the American Veterinary Medical Association in 2015, which compared the prices of human and animal versions of several drugs used to treat hypertension in cats, found that the animal versions of the drugs were generally less expensive than the human versions. This also highlights that there are differences between markets on pricing that also impact any differential (true for both the human and animal equivalents). An interesting observation, therefore, is that the pricing of some products used in a veterinary context is higher than for humans, while in other cases it is lower.
The question is: What drives these price differentials? There are several factors of relevance:
Research and development costs: Developing new animal pharmaceuticals can be just as expensive as developing new human pharmaceuticals, but with a smaller potential market, companies may need to charge more to recoup their costs. However, as many drugs used in animals are repurposed from man, the initial components of pre-clinical development may not be required, and indeed they have proven utility in one species (our own) that substantially improves the probability of technical success.
Regulatory requirements: The regulatory requirements for animal pharmaceuticals are typically less stringent than those in humans, with a commensurate impact on clinical development costs. However, the testing and approval process for animal pharmaceuticals can still be lengthy and expensive. In the case of Librela, the pivotal efficacy trial recruited 287 client-owned dogs with osteoarthritis, who were randomized to LibrelaÒ or placebo. As you might expect, the primary endpoint was owner (as opposed to canine) assessment of pain. This reminds me of a quote from one of the psychiatrists who trained me at medical school: “the interview is what distinguishes the doctor from the veterinarian”. It is also the first time I have seen “Labrador retriever” and “German shepherd dog” in the baseline characteristics of a patient population! It is worthy of note that blockade of NGF with monoclonal antibodies has been trialed in humans, but development was terminated because of fractures and cases of rapidly progressive osteoarthritis, despite emerging efficacy of pain efficacy.
Market size: The market for animal pharmaceuticals is generally smaller than that for human pharmaceuticals, which can lead to higher prices to offset the lower volume of sales. A lower cost of development of course may offset this issue.
Manufacturing costs: The cost of manufacturing animal pharmaceuticals may be higher than for human pharmaceuticals, due to the need for specialized production facilities and equipment.
Competition: The animal pharmaceutical market may have fewer competitors than the human pharmaceutical market, which could result in higher prices. An example of this is the relatively few manufacturers of insulin for dogs and cats in the US.
Insurance coverage: Many animal owners do not have insurance coverage for their pets, which means that they may be more price-sensitive when it comes to purchasing animal pharmaceuticals: this is likely to be very dependent on socio-economic circumstances.
Overall, then, there are competing influences regards the pricing of drugs in humans versus other species. So, what can we conclude?
As in human pharma, the price of veterinarian drugs is ultimately based on perceived value, rather than just an addition of component parts (e.g., R&D, manufacturing, etc.). The payer environment is also complex, although it is overwhelmingly insurance and out-of-pocket (no socialized medicine here). Juxtaposed with the perceived value, it is likely there are ceilings for price too. Despite Britain having a long-held reputation as a nation of animal lovers, the ability to pay for more expensive drugs – especially outside of insurance – will be limited for many, although wealthier individuals may dig deeper. The perceived cost/benefit ratio may just not stack up.
There may also be ceiling effects in different therapy areas: analgesics have always been an interesting class, as most drugs are generic small molecules. Given you could provide an NSAID or opioid to your dog for relatively minor cost, could a monoclonal antibody ever be priced many multiples higher? I suspect that would be difficult. It is difficult to compare modern cancer therapies for humans and pets, mainly because many of the targeted agents (and all of the monoclonals) are yet to make it into pets.
Finally, can we ever envisage a day when full cost-per-QALY analyses are performed so companion pet owners can understand the value in more detail? That seems an opportunity for someone, and raises another question…what would an optimal cost-per-QALY for a dog look like? What about a goldfish, tortoise…
So back to Tilly. She has responded very well to her Librela. I’m grateful for that, for the people who developed the drug, and that her pet insurance could cover the cost. Her treatment has restored her mobility, giving her more opportunities to run and bark at passers-by, not to mention the destruction of a significant volume of various plush toys.
