VN May 2017

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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.

I 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

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