Animal fanatics even go so far as to argue that our four-legged friends are “better than people”. Without going into the merits, but from a health and financial point of view this statement can almost make sense. The new frontier of healthcare and that is the care of pets, in particular, tells us why dogs and cats, whose presence in our homes is now at an all-time high. One Italian out of three owns a pet and the trend is still increasing. In the United States alone, according to data from Appa (American Pet Production Association), the equivalent of 62 billion euros is spent every year just for the well-being of the much-adored dogs and cats.
A trend that can only consolidate during the Covid-19 emergency: the Appa again noted that spending on pets is not affected by the crisis and that, on the contrary, "precisely in this phase of social distancing stress, owners are appreciating the benefits of having a dog or cat in the house”. 70% said they spend more time with their pet domestic while practicing social distancing from people, and 60% add that the extra time spent with the animal made them feel even more connected to him. In the US, the percentage of owners has risen from 56% in 1988 to the current 67%, especially under the influence of the Millennials.
In such a context, it is unlikely that the pet economy will not become increasingly attractive for medicine producers and for the asset management industry. And indeed it is. From 1979 to 2017, again taking the US market as a model, the annual growth rate of spending on veterinary (and similar) services it surpassed that of personal consumption spending by 340 points. A striking figure that is driving investments in veterinary health care. A particularly profitable business, for various reasons. First of all, because pharmacies, unlike for medicines for people, are not obliged to dispense the cheapest version of a medicine if the generic is not available: this means that according to some estimates the producers of medicines for animals can keep 60-75% of the revenues after the patent expires.
To make a comparison, the patents of drugs for human use can lose up to 90% of revenues after the entry of the generic. Not only. Developing a medicine for animals is faster and cheaper: It takes about 3-7 years and typically minus $100 million, versus the 9 years and possibly $15 billion it takes to produce one for men. In short, for those who invest in these realities, such as the shareholders, an excellent cash return on invested capital is guaranteed. There are also concrete examples. Medicines and vaccines makers Zoetis (USA) and Dechra (UK) have achieved a return on investment of 30 and 10%, respectively, while the average for "human" pharmaceutical companies is XNUMX%.
