10 Mar 2026
The Competition and Markets Authority (CMA) report into the pricing of veterinary medicines has led many vets to discuss the potential for alternative strategies within their practices. These strategies can be complex, but now may be a good time to bite the bullet and review your pricing models…
Lisa Thomas
Job Title
Image: px.palette / Adobe Stock
Navigating through the pricing strategies of veterinary medicines can be complex for both the veterinary practice (implementing these models and monitoring cash flow) and for the pet owner (understanding costs and assessing good value).
There are a number of considerations to take when thinking about pricing including rebates offered, cash flow within the practice, the rise of internet pharmacies and delivering good value and service for pet owners.
Most veterinary medicines purchased by veterinary practices through the bigger wholesalers will benefit from rebates, both from the wholesaler and from the manufacturer. These rebates are usually paid back to the practice monthly, as a lump sum.
Rebates and banded discounts seem to favour corporate practices and buying groups, making it more difficult for smaller, independent practices to be competitive, especially in areas where there are a lot of clinics in close proximity and when up against the growing threat of internet pharmacies.
Some larger buying groups also reward brand loyalty as an incentive to use one manufacturer’s product over another, potentially reducing competition and brand choice further.
Rebates are not standardised within practices, with some products receiving very small discounts and others up to 80% off the list price, so it can be impossible for vet teams to work out what they are actually paying for medicines and for owners to assess value. The 2025 Competition and Markets Authority (CMA) report confirmed that some veterinary businesses use the lump sum rebate payments received from pharmaceutical, food and device purchases to support the upkeep of premises, maintain a highly qualified staff and allow for the delivery of enhanced veterinary services.
Theoretically, this enables them to maintain lower costs of these services for pet owners yet, although this may mean charging higher prices for medicines and prescriptions, it is not clear if the pet owner benefits1. The report concluded that prices charged by vets have increased by 63% (on average) between 2016 and 2023, outpacing inflation over the same period. Practice running costs have also increased, but has a fair balance been attained?
Most companion practices will mark-up medicine prices to pet owners at up to 100% of the list price. While this seems high, mark-ups at this level are in line with other products in the sector – pet accessories, food and over-the-counter medicines. In contrast, internet pharmacies will mark up off their rebated price, so present a lower price to pet owners. They have reduced overheads and run a purely retail business, so lower profits can be borne per purchase.
At the end of 2023, the sales of veterinary medicines through online pharmacies had grown at a rate of 12% over the year compared to those coming directly through veterinary surgeons which grew at 9.4%, but from a much higher base2.
Online pharmacies accounted for only 13% of all sales of medicines into the veterinary sector, highlighting that pet owners and farmers are still purchasing most of their medicines directly from veterinary surgeries.
However, the accelerated growth achieved by internet pharmacies suggests these are becoming more important and a competitive threat to vet surgeries. This is particularly the case for pet food and non-prescription medicines, where the lower mark-up added by internet pharmacies, plus the opportunities for home delivery, make them a more attractive proposition for pet owners.
Interestingly, many of these internet pharmacies are owned by the same corporate groups that are able to negotiate high rebates from medicines purchases through their practices, gaining twice.
So why is it, that despite the lower costs of medicines available online, the majority of owners are still purchasing medicines through vets? The CMA report suggests that one of the key reasons may be that owners do not understand the process for buying their medicines online (via prescription or otherwise).
Owners report they have not been given enough information, so do not know the specifics of what they need or they don’t want the hassle of searching online. Other possibilities are that they do not want to “offend” their vet practice (with whom they have a good relationship and loyalty) or they are confused about which pharmacy to use for the best value1.
Of course, in emergency situations, there are no opportunities to “shop around” and pets need to be treated quickly and via specialist medicines available in the clinic at the time, meaning owners have no option but to pay the higher prices.
On top of this, veterinary visits can be stressful for owners, especially in the case of a sick pet rather than for elective services, and enquiring about or researching the best value medicines will not be a priority so, again, higher medicine prices are paid.
Even before the CMA report was published, this information was in the public domain following articles and case studies delivered by the BBC in 2024 and the Guardian newspaper in 20233,4, highlighting that while owners are concerned they are overpaying for veterinary treatments, they do not know what other options are available. Moving to a new clinic is stressful and owners feel they have to accept the prices they are charged.
This discounted pricing model has been the standard for many years and, while the provision of veterinary services is highly valued by pet owners in the UK, vets may be taking advantage of this trust and not really listening to the needs of their clients.
Net net pricing is a relatively new pricing model adopted by a few smaller, innovative companies or larger companies across small, high-value ranges. This enables practices to buy products from pharmacies and wholesalers at the final price, with no rebate or discount offered. The outcome is that practices have true clarity on the price they are paying for medicines and do not “overpay” up front and then wait for rebates to be paid back at the end of the month.
Key advantages of this model include the fact that vet practices can define their own “sell-out” medicine prices to pet owners and farmers, rather than an automatic mark-up off an artificial list price. Anecdotal evidence also suggests that practices can better compete with internet pharmacies, which is particularly pertinent for the equine and farming sectors and for frequently used/preventive medicines for pets where price transparency is key.
Research (2025) conducted by Nupsala across 50 veterinary practices revealed that 98% of vets who participated in the survey agreed with the concept and ethos of net net pricing, despite many not being able to take advantage of it5. More than two thirds (68%) of all vets questioned liked the fact that net net pricing delivered better clarity on the cost of medicines. This increased to 83% when just the opinions from vets working in independent practices were taken into account.
Interestingly, just below half of the respondents appreciated that net net pricing meant they didn’t have to wait a month or more for the money to come back into the practice accounts, simplifying cash flow. Again, this increased to 72% when only data from independent practices was analysed.
Other considerations that were valued included the fact that vets can define their own pricing strategy to pet owners and farmers and that net net pricing enabled them to compete more effectively with internet pharmacies. This was felt to be of growing importance for the future.
Challenges to this pricing model were also highlighted. The main concern expressed was that the practice would have to develop two pricing strategies and would need to use a second wholesaler, adding complexity to an already involved process. During discussions, it was felt that the current market structure meant net net pricing would be particularly useful for specific, specialist, high value products that could be purchased as needed and may not be readily available from mainstream wholesalers.
A total of 42% of all vets questioned felt that rebates helped with cash flow at the end of the month, so would miss the payment, yet this fell to just 6% when data from independent practices was analysed separately to that from corporate practices. This suggests that the benefits of net net pricing may be more appreciated by independent practices that have a higher level of control over their own pricing strategies and cash flow.
Current, mainstream pricing strategies of veterinary medicines are complex, inflexible and designed to contribute significantly to practice service provision and profit margins. They also mean there is a lack of transparency and a desire to “protect” true net prices from end users. This is understandable and standard across a range of industries – however, the level of mark-up has been under investigation since the first Competition Commission report in 1993.
There is a growing level of support from vets for a more transparent, net net pricing type model which would appear to be fairer for pet owners, more flexible for vets and allow for a more competitive environment.
The UK is unique in that vets can make profit on medicines to this level. Vets in the US and in many EU countries are limited in the amount of money that can be made on the sale of products versus services, and a large percentage of medicines are purchased via prescription through pharmacies or online.
The question is, do UK veterinary pricing strategies need to adapt to a more challenging market place and, perhaps a bigger question, can they change? Will the veterinary sector start listening to public opinion and make some difficult decisions or will change be determined for us by external forces, with potentially serious consequences for the whole sector?
Lisa Thomas is sales manager at Nupsala, a veterinary wholesaler and distributor specialising in products for the management of musculoskeletal conditions, including osteoarthritis.