As personal spending dips, pet spending rises
Veterinarian Michael Fusco checks Bella after her owner brought her fearing the canine was fed a tainted brand of pet food at Adams Veterinary Clinic March 19, 2007 in Miami, Fla.
Kai Ryssdal: The pharmaceutical conglomerate Pfizer reported modest profit growth today. Sales of prescription medicines were down, but another part of the Pfizer empire picked up some of that slack.
For the first time ever, Pfizer's sales of drugs for animals passed the billion-dollar mark. A bad economy apparently has people cutting back on medical spending for themselves, but fortunately for Big Pharma, we're still shelling out for our pets. Sally Herships reports.
Sally Herships: The drug industry for animals is kind of like the golden retriever puppy of the pharmaceutical world.
Damien Conover: The nice thing about the animal health business is they're pretty steady growers.
Damien Conover is a health care analyst at Morningstar. He says animal drug sales rise about 3 to 6 percent a year. And that dependability is welcome in a roller coaster industry where profits often depend on patented drugs for humans, like Lipitor -- the Pfizer blockbuster that loses its patent this year.
Conover: In contrast, patents don't have as big a role in animal health. So when a specific product loses exclusivity, the drop-off isn't as dramatic.
Companies like Merck, Bayer and Novartis all sell drugs for animals. The industry is worth $20 billion a year worldwide. When you compare it to the drug market for us humans, animal meds may only be the tiniest piece of kibble, but still:
Erick Gordon: Just about everybody is making money on pets.
We spend almost as much medicating our pets as we do our beasts of burden -- the pigs, chickens and cows that feed the world. Erick Gordon teaches the business of health at the University of Michigan. He says medical advances give pet owners a lot more to spend on.
Gordon: We will have them X-rayed, we will have them vaccinated, we will give pets cancer treatments.
A recent Morningstar report noted that pet ownership is rising, and in many households, pets are treated as surrogate children.
In New York, I'm Sally Herships for Marketplace.