Hot topics in brief: cannabis, corporate consolidation and telemedicine

dvm360dvm360 March 2020
Volume 51
Issue 3

Change in veterinary medicine is a given. You can embrace the evolution or not, but just be sure you’re aware of what’s trending—because your clients are sure to ask.

Elroi /

Comfort, convenience and consolidation…. These goals have become change agents in the veterinary industry, spurring new trends like cannabis use, telemedicine and “big boxing” of veterinary hospitals.

“Veterinarians are very adaptable,” says Charlotte Lacroix, DVM, JD, who heads Veterinary Business Advisors, a New Jersey–based firm that consults on veterinary business and legal issues. At the 2020 Veterinary Meeting & Expo (VMX) in Orlando, Fla., last month, Dr. Lacroix cut through the regulations and red tape involved in these metamorphoses.

Cannabis and companion animals

Marijuana and hemp are both derived from the Cannabis sativa plant. Marijuana has a higher concentration of the psychoactive cannabinoid THC (delta-9-tetrahydrocannabinol) and a lower concentration of the nonpsychoactive cannabinoid CBD (cannabidiol); hemp possesses the reverse ratios.

Marijuana is illegal under federal law, but 33 states have legalized it for medicinal use and 11 states for recreational usein people only.

In June 2018, the FDA approved CBD-based Epidiolex for seizure control, and two synthetic THC-based medications—Marinol (dronabinol) and Cesamet (nabilone)—are approved to stimulate appetite and treat nausea, respectively, in people undergoing chemotherapy. 

The Agriculture Improvement Act (better known as the Farm Bill) removed hemp and all low-THC products from the Controlled Substances Act. Nevertheless, all cannabis products are FDA regulated, regardless of the source.

What does all this mean for the animal health industry? “The FDA has not approved the use of marijuana or hemp—in any form or in any of the 50 states or territories—in animals,” Dr. Lacroix said, because safety and efficacy data are not currently available.

While many veterinarians believe THC and CBD have therapeutic benefits for animals, particularly for nausea, epilepsy and anxiety, she noted that “beneficial does not equal legal.”

However, veterinarians can take advantage of the Animal Medicinal Drug Use Clarification Act (AMDUCA), which permits them to prescribe (limited) extralabel use of FDA-approved human drugs in their animal patients.

Many companies try to circumvent this oversight by dumping CBD into supplements for people, which are not FDA regulated. They can do this legally, Dr. Lacroix said, but they cannot make therapeutic claims.

This same rule does not apply for animals, however. While “supplements” are a recognized legal category for people, according to the FDA, anything that goes into an animal is either a “food” or a “drug” and thereby FDA regulated.

While change is afoot, Dr. Lacroix stressed that when it comes to cannabinoid products (supplements/foods), “You can’t carry it. You can’t dispense it. You can’t administer it.”

She also reminded the audience that because CBD/THC are not regulated, their safety in animals has not been established; furthermore, ample data demonstrate its toxicity in animals. In most states, with the recent exceptions of California, Connecticut, Missouri and Tennessee, veterinarians are not allowed to even discuss these products with clients.

Phoning it in: telemedicine for pets

As the industry demands more convenience and immediacy, telemedicine has been making inroads. An extension of the exam room, telemedicine is the conveying of medical information electronically rather than in the physical presence of the client and patient.

Telemedicine can be performed in three ways:

  • Doctor-to-doctor: through specialist and diagnostic companies
  • Doctor-to-pet owner: via phone or online; under the AVMA’s Model Veterinary Practice Act, this can only be done within an existing veterinarian-client-patient relationship (VCPR), which can only be established through an initial physical exam. Most veterinary state boards have adopted the AVMA’s ruling on this, Dr. Lacroix said.
  • Triage style: The veterinarian recommends next-step advice for the pet owner during an acute situation; the recommendation could be, “Go to an ER” or “Administer hydrogen peroxide now and then follow up with your regular veterinarian….”

Telemedicine is particularly suited to handling chronic cases, like caring the arthritic dog, monitoring wound healing, providing hospice care, and managing the resistant cat.

Telemedicine also has the potential to elevate the roles of veterinary technicians, as they are being tasked more frequently to conduct physical exams and diagnostics, which they then videoconference to a veterinarian working remotely.

The challenges of telemedicine include licensing issues, data protection and increased liability. “The standard of care changes a little bit at a time every single day,” said Dr. Lacroix, “and the more technology you bring in, yes, it will increase our liability.”

But despite the risk, she added, new technologies and new practice modes can improve care.

Succession planning and corporate consolidation

For veterinarians who are considering selling their practice, Dr. Lacroix advised that they ask themselves these questions:

  • When?
  • Why?
  • What does retirement look like?
  • To whom do you want to sell?
  • How will the sale be structured?

The buyer might be an individual, a group of individuals, or a big company. In some states, like Pennsylvania and California, a practice owner can sell to a nonveterinarian. But more and more, practices are being sold to large consolidation firms.

There are some 70 veterinary corporate consolidators in the U.S., but only about 10 big players. The largest of these is Mars, Inc., for whom veterinary business income now exceeds that of their chocolate business. The others include National Veterinary Associates, Inc. (NVA), VetCor, PetVet Care Centers and Pathway Veterinary Alliance.

The animal health industry has drawn substantial corporate investment for a number of reasons: Americans spend over $70 billion a year on their pets, according to the American Pet Products Association (APPA); the industry has grown steadily over the past 40 years, at an average rate of 5.7%; payment for veterinary services and products occurs at time of service, rather than upon delayed insurance reimbursement; malpractice insurance is low; and veterinary medicine is subject to less regulation than in human medicine.

Dr. Lacroix said that corporate consolidation is beneficial to the veterinary industry because it funds costly platforms for improved medical care. However, not everyone trusts the corporate newcomers.

In fact, recent surveys show that corporate consolidation is one of the main concerns of veterinarians. Dr. Lacroix said the jury is out on how the industry will be transformed by growing corporate structure, which is projected to account for 10% to 20% of the veterinary market.

“The question is not, ‘How many practices are they going to consolidate?’ but rather, ‘How much revenue are they going to hold onto?’”

Dr. Joan Capuzzi is a small animal veterinarian and journalist based in the Philadelphia area.

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