SEOUL, January 29 (Korea Bizwire) –Properly caring for pets can be an expensive endeavor. And given that comprehensive health insurance coverage for pets has yet to be implemented in Korea, this hard fact hits home for many animal lovers in a nation where over 10 million people have welcomed pets into their homes.
No wonder many businesses look to seize upon lucrative opportunities, taking advantage of pet owners’ extreme love for their companions and sometimes illegally using dominant market positions.
According to the Fair Trade Commission of South Korea, Zoetis Korea and Velvet, dominant leaders in the nation’s pet medication market, deliberately avoided price competition for heartworm preventive products, medication that nearly every pet owner purchases regularly to prevent lethal infections.
It turned out that Zoetis Korea and Velvet were only supplying animal clinics with the heartworm meds while intentionally declining to sell to animal pharmacies.
Some veterinarians even pushed pet pharmaceuticals not to supply the heartworm meds to animal pharmacies with the thinking that such distribution might erode their monopolistic profits. A total of five doctors participated in the illegal act, mostly members of an Internet cafe bulletin board dedicated to veterinarians.
The combined share of Zoetis Korea and Velvet in the heartworm preventive medication was 67%, as of 2014, with Merial Korea trailing with a market share of 18%.
Heartworm prevention medicine, used to prevent heartworm infections among dogs and cats, are not classified as prescription drugs, making them legally available for over-the-counter purchase. Even wholesale dealers can sell them without restrictions.
But this free market condition led to price competition, apparently chipping away at the lucrative profit source for both pet clinics and the pet pharmaceutical industry.
In fact, supply prices of the heartworm meds are between 5,600 and 6,600 won, or about 5 dollars, but pet owners have to pay two to three times more than these prices.
“Now that a level playing ground can be established in terms of price competition between pet clinics and pet pharmacies, pet owners will be less burdened in buying the heartworm preventive meds,” said an official with the Fair Trade Commission.
By Jerry M. Kim (firstname.lastname@example.org)