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f you are going to convince a
client their pet needs treatment
X (being the active compound),
and they agree, then they have
agreed. Don’t muddy the waters
by putting the decision of O vs G
in their hands – they will only ever
make the cheapest choice and, in so
doing, force your practice further from
solvency, meaning you must make
additional work out of thin air – or
overcharge another client, to maintain
the same net profit. Let’s say tablet
O is R9.50 a tab, and G (same active,
“X”) is R4.50. You mark both up 75%
= O becomes R16.65 (profit R7.13)
and G becomes R7.88 (profit R3.38).
The difference is R 3.75 (profit). So,
every time you sell 10 of active “X”,
you are throwing R37.50 profit away.
If you get O/G in boxes of 100 tabs,
and like us, sell a box a month, you
are throwing away R4,500 net profit a
year. Good luck finding that elsewhere.
That means using that generic has
essentially cost the average, 1.5 small
animal practice 0.17% of its annual
growth. That equates to having
to suddenly find at least 50% of a
month’s salary for a receptionist,
1 month’s salary for a handler, or
trying to make it up by selling another
42 x 12kg bags of a premium dog food
– over what you were doing already.
Taking a more philosophical approach
– a company that originates new
products sits and thinks about
the medical needs of the animal
population and the medical profession.
They get teams of original thinkers
and innovators together to create new
products – a 5 – 15 year process
involving hundreds of people
– chemists, toxicologists, vets,
production managers, marketers, and
so forth – they pay for trials, and they
discard 99% of the work (and money)
invested. They market, support and
educate us on their products. When
we have an issue with a product,
there is a vast army of support for
us and our clients, and a huge array
of company technical literature and
expertise. The company is about
making money – aren’t most of us at
some level – but they are primarily
focussed on developing new drugs for
our use. They are problem solvers.
Generic producers are simply
imitating a known formula and are
therefore focussed around production
and marketing. There is little or no
problem-solving or ingenuity focussed
around their products. The waters are
a bit muddied when some companies
produce a generic of an active but the
rest of their products are originals, or
vice versa – you must make up your
own mind what will work for you, in
your practice.
In general, however, if profit is a driver
for some of your business decisions,
then generics are bad for business,
in my humble opinion. In a welfare
organisation, or for individual patients,
they may be life-saving. It all depends
on the context. You should know
yours.
The ethics of expectations
regarding levels of medical care
[Acknowledgement: This is extensively
paraphrased and contextualised to veterinary
practice, from Chapters 73, 79 & 80 of the 6th
edition of Holland and Frei’s Cancer Medicine.]
Most patients and society in general,
would like to think that the entire team
of doctors, nurses, and specialists are
cooperatively involved in solving their
medical problems. Clients have little
awareness of turf battles, professional
egos, personal animosities, or
medical fads, but if they knew of
their existence, they would have
little tolerance for them. Vets of all
disciplines and health professionals
who interact with them are human
beings, not unemotional automatons.
Happily, the energies they squander
in picayune or counterproductive
activities are small compared to their
constructive, positive efforts to seek
improved (not just new) approaches
to veterinary medical and surgical
problems.
The keystone for a successful
interdisciplinary management team
is attitude: humility, tolerance,
adaptability, and appreciation for
alternative approaches. None of us
is so skilled that he or she can be as
expert in every discipline as a highly
competent exponent of that particular
specialty. No one is omniscient. We
are, and must be, interdependent, so
it is important to work with individuals
who are trustworthy and friendly.
More failures of interdisciplinary
management teams seem to occur
>>> 12
Ethical business, good veterinary medicine –
Part 4
Dr Anthony Zambelli
(This is the last of a short series of four articles on this topic. Previous articles were published in the February
– April issues of VetNews. Serious food for thought! -Ed)
Generics vs Originator Products
We know that the MCC and other regulatory provisions ensure
generics are meant to be effective as originator products. With respect, I, however, am not a great fan of
them, from a business point of view. For a simple reason – they reduce the net profit of a practice, making it
harder to survive and prosper. Let’s use an example of two equivalent products, call them O and G.
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