The Competition and Markets Authority (CMA) has published its provisional decision on the state of the veterinary market.
The CMA found that over 60% of veterinary practices are now owned by only six corporate groups who may also own other businesses within the supply chain such as referral centres, crematoria and out of hours providers. IVC Evidensia is the largest, owning over 900 first opinion veterinary centres in addition to other related businesses.
The Provisional Decision states that “Having assessed a wide range of evidence in the round, we have provisionally found significant and widespread problems compared to a situation where the market was working well.”
It repeatedly mentions that there is no NHS for pets. This begs the question as to whether there should indeed be one? There must be a safety net in place for those that cannot afford the costs of healthcare, with or without, insurance. There is no getting away from rising vet costs whether due to developments in pet health sciences and pharmaceuticals or an increased focus on preventative treatments as well as complementary and alternative treatments.
It repeatedly mentions that there is no NHS for pets. This begs the question as to whether there should indeed be one?
One of the key matters skewing competition in the veterinary market is that individual vets are regulated whilst veterinary practices are not. The regulator of the veterinary profession, the Royal College for Veterinary Surgeons (RCVS) should do more to address this. Ensuring there is a balance between running a business and ensuring the health and welfare of animals remains paramount.
Vets are in a relationship of trust with the pet owner who often is reliant on them for advice as to the correct course of action. Owners don’t know (nor should they be expected to know) if they are being sold an expensive brand or the more effective treatment. They also don’t know whether other causes of treatment or diagnosis are appropriate or available.
This has finally been recognised by the CMA who found that “there is inevitably also an essential role for regulation to play, to ensure that commercial pressures do not undermine the process of providing treatments which best meet the needs of the pet and its owner (as is the case with other professional services such as the provision of legal advice, private medical care and financial services). The need for effective regulation is a critical part of our provisional findings and our provisional remedies package.”
The CMA has found no evidence of a correlation between increase in prices and quality of care.
“We have not been provided with robust evidence from [large veterinary groups] on their post-acquisition investments in capital or staff, and how these compare to investments that these practices would have been made had they not been acquired…While [large veterinary groups] provided evidence of increases in remuneration per FTE worker over time, these salary increases can, at most, explain around half of the price increases over time…”
“In contrast, we have seen internal documents…that link price increases to an expectation that pet owners will not react by purchasing less or switching away”.
Consolidation of veterinary practices and increases in the cost of services they provide has had a knock-on impact on the cost of insurance claims and pet insurance. The latest ABI figures show that insurers paid out a record £1.23 billion in 2024, more than double what payouts were ten years ago.
The CMA found high local concentration is not widespread enough to have been a driver of price increases. However, it does not break this down across the type of pet. For example, in the case of rabbits (the third most common pet after dogs and cats) and exotics, where an advanced practitioner or even a specialist might be required to give a first opinion, competition might be vastly reduced. There has been campaigning for newly qualified vets to have a degree of specialist training as part of their qualification requirements so that they are more effectively able to diagnose and treat rabbits. But to no avail as yet, resulting in poor diagnosis, treatment and outcomes, and hence missing opportunities for preventive treatment or early interventions. Expensive treatment can result in higher claims costs when the issues do come to light, often too late.
What solutions are the CMA proposing?
The CMA has provisionally identified three key problems that need to be addressed: lack of information, barriers in the market and an inadequate regulatory framework.
To address these issues, the CMA has proposed a three-pronged approach involving action by the CMA, RCVS and the Government. The approach focuses on transparency and informed choice for owners on practice, treatments, referrals, medicines and price. Notably, the CMA is proposing to cap the price of a written prescription to £16 (mandating that it should also be provided on the spot or emailed the same day).
It is likely the RCVS will have some sort of role in making sure vet practices are complying with the new requirements, alongside hosting a price comparison website so that pet owners can compare different prices for different vets. However, some are concerned that an independent organisation should take on the role of monitoring compliance, to avoid any conflict of interest and to maintain impartiality if any complaints were to arise. In my opinion, not introducing an independent entity is a missed opportunity by the CMA.
The ABI, alongside others in the market, asked for action by the CMA to specifically address the rising cost of veterinary services, including standardised pricing. The CMA has decided not to pursue this (save for capping prescription costs) as ultimately its role is to maintain competition in the market. Another reason is also that this would be extremely difficult to effect and implement in practice.