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The changes came without warning. This spring, with no hearings, or chances for stakeholders to participate in the law-making process, the Kentucky Legislature pushed through a bill that included a 6 percent tax on companion animal services. That’s 6 percent added to the bill of every pet owner that sees a veterinarian, or buys a product from a veterinarian.

What’s worse, the taxes raised were in no way targeted to improve animal welfare, or anything related to pet ownership or veterinary care, according to Mark Cushing, CEO and Founder of the Animal Policy Group. “It’s just a chance to reach over and grab money from pet owners to pay for other Kentucky priorities or interests,” Cushing says.

Unfortunately, the legislation in Kentucky isn’t an anomaly. In fact, similar legislation is popping up state by state. But several industry stakeholders, including Cushing, may have a solution to monitor, and fight back, against bills that could negatively impact pet owners, veterinary practices and the animal health industry at large.

Engaging public policy
In April of 2018, PetsPAC was created by the Veterinary Innovation Council, with the intent of using innovative ideas to engage in public policy issues and initiatives that affect veterinarians, pet owners, and animal health throughout the United States.

Cushing says his firm tracks around 4,200 separate pieces of legislation in state legislatures annually that affect veterinarians, animal health more broadly, and pets in particular. Of those 4,200 or so bills, close to 400 warrant special attention. “Some are good for pets and the industry, but some of them aren’t so good for pets and the industry,” he says.

The problem is, there has not been an organized body in a position to devote resources to challenge the bad policies. “In politics and legislatures, resources means dollars to invest in lobbyists, social media or communication campaigns,” Cushing says. “There are several reasons for that. Rarely does any one company feel like it alone should bear the brunt of getting involved, so companies tend to stay back. The state VMAs do a good job, but they are limited in resources. The AVMA has a longstanding Political Action Campaign, but it is a federal PAC, limited to federal issues, and you can only contribute to it if you are a veterinarian. And that is standard for trade associations.”

However, most regulations and laws affecting pets, veterinarians and animal health are done at the state level, not in Congress or by federal agencies. “Easily more than 90 percent,” Cushing says.

PetsPAC is a political action committee that will:

  • Focus exclusively on state activity, in all 50 states.
  • Would not be limited to contributions from veterinarians. “The vast majority working in animal health or pet-related matters – retail, nutrition, pharmaceuticals, etc. – are not veterinarians.”
  • The PAC would be allowed to accept corporate contributions. “Federal PACs cannot accept corporate contributions,” Cushing says. “So you’re having to convince managers and employees to write personal checks to contribute, and that’s a limiting factor.”

PetsPAC will also reach out to pet owners and ask for contributions, for maybe as little as $5 to $10, “whatever they think is appropriate,” Cushing says. The goal is to get them engaged. “In working with legislatures, if we were to have the professionals and the pet owners join, you’d have a tremendous political force that could have an impact.”

A fundraising campaign kicked off in June. PetsPAC plans to reach out to all the companies in the broad companion animal sector.

“Manufacturers, distributors, veterinary practices, pharmaceuticals, pet food, nutrition, pet supplies, pet retail – across the board we will be reaching out and hopefully we can be part of their own plans for public policy involvement,” Cushing says. “What’s nice about a PAC is it allows a company to get involved but not have to take the lead. It becomes PetsPAC working in the Pennsylvania legislature, not Company X or Y or Z. It’s efficient that way.”

Political battles
The Kentucky tax on companion animal services will most likely be one of the first legislative issues PetsPAC will get involved with. Cushing’s Animal Health Policy Group has joined with industry coalitions to successfully fight veterinary sales taxes in several states, “but it gets harder each time.” The Kentucky tax goes into effect July 1, and the state legislature won’t be back in session until January 2019, “so there is plenty of time to do the groundwork to pursue an appeal.”

Another example of political battles PetsPAC will get involved with are where states are attempting to restrict or prohibit veterinarians from doing direct shipments of medications to their pet owners. “It’s a great convenience for pet owners,” Cushing says. “It is a means for veterinarians to compete with Big Box retailers, Dotcoms and 1-800 PET MEDS.”

However, state pharmacy boards in Nevada and Minnesota have attempted to make it illegal for veterinarians to provide that service.

Cushing says it’s an odd but persistent distaste that these state pharmacy boards seem to have for veterinarians selling medications to their clients. “They look at the human pharmaceutical model, which they spend most of their time regulating, and they are comfortable with the fact that doctors write prescriptions to CVS, Walgreens and Walmart – which make great profits delivering the medications,” he says. “That somehow doesn’t cause them any trouble.”

Veterinarians prescribe medications for a myriad of reasons. Sometimes it is pain medication post surgery or for a chronic disease. An additional challenge in animal health is getting a pet to take the medication, or working with the pet owner on what methods might work.

“The idea that veterinarians are able to make any profit on the medications seems to upset these pharmacies boards,” Cushing says. “It is not in response to any public complaints or any public issues, but they will throw charges around that this is a kickback, price gouging and other toxic terms.” Cushing says his client and the state VMA were successful in Nevada, “and we expect to be successful in Minnesota.”

PetsPAC will also consider taking up causes that pet owners would like to see, including stronger laws in the books regarding animal abuse, or greater freedom to enjoy their pets in public or commercial areas.
PetsPAC in action
So, how would PetsPAC work in the field? Using Kentucky’s tax as an example, Cushing says PetsPAC will work with the Kentucky VMA and its programs. PetsPAC would offer social media, one-on-one legislative lobbying, and other communication tools to raise awareness of the tax to industry stakeholders, such as individual veterinarians pharmaceutical companies, food companies, and the Kentucky pet owners themselves, and encourage them to speak with their representatives. “We were part of a 380-page bill,” Cushing says. “They went after all sorts of groups. Equal opportunity offenders. They just dragged small animal veterinarians into it and we didn’t get a chance to stop it.” PetsPAC also will be able to make campaign contributions to key legislators.

If legislatures do the math, they will see that “65 percent of households in Kentucky have pets, and nobody has any notion that veterinarians are taking advantage of the system,” Cushing says. “There is no reason to punish them. It can be expensive for people with children and pets in every facet of their healthcare, so adding to the healthcare cost generally when legislatures step back and look at it, that’s not a great idea or there are alternatives to look at. We’ll use all the tools.”

How PetsPAC will operate
PetsPAC has a Board of Directors, made up of industry stakeholders, including veterinarians, distributors, and manufacturers.

The Board will make the decision as to where to get involved, and how to get involved, in state legislative issues. Mark Cushing will act as the policy and political advisor. “I will provide the information and make the recommendations, but it will be the Board’s decision. It’s a diverse board, which I think will do a very good job of assessing and making those decisions.”

Charlotte Lacroix, DVM, JD, Founder and CEO of Veterinary Business Advisors, Inc.

Board Members:
Eleanor Green, Dean, College of Veterinary Medicine & Biomedical Sciences at Texas A&M University

Tom Bohn, NAVC CEO and Veterinary Innovation Council Chair

Dani McVety, CEO and Founder, DVM, of Lap of Love

Mary Pat Thompson, EVP and CFO of MWI

Doug Drew, Senior VP of VCA/Antech

Steve Leder, Zoetis head of US Companion Animal

Bob Lester, CMO of WellHaven Pet Health

Jay Mazelsky, Executive VP of IDEXX