MAP Policies: Over the Counter
and Under Control
By Jeffrey H. Schick, CVPM, ESQ
How MAP policies and smart online enforcement keep sales in veterinary hospitals
The rise of e-commerce has brought profound change to veterinary medicine. Companies like Chewy and Amazon have made many of our clients’ lives easier, but they have also had a dramatic effect on the role of the veterinary pharmacy.
In some cases, veterinary exam rooms have even been turned into “showrooms” for online pharmacies. For many years, veterinary manufacturers have thought that there was nothing they could do to combat the rise of online pharmacies. However, new technology and advances in the e-commerce legal landscape are making it possible for manufacturers to take control of their over-the-counter distribution.
MAP Policies: An investment in your brand and your veterinary partners
MAP policies have been around for years, but only recently have they made an entrance into the veterinary space. MAP policies, or Minimum Advertised Price policies, are unilateral pricing policies imposed by a manufacturer that sets the floor price for which OTC products may be sold. In order for MAP policies to withstand anti-trust scrutiny, they must be based on pro-competitive factors, such as a desire to protect a brand’s premium image or to allow veterinarians and online sellers to invest in the customer experience. MAP policies set the floor price at which products may be advertised (or sold), and veterinary hospitals and online retailers are free to sell products “at or above MAP.”
Because MAP is a policy and not an agreement (due to anti-trust concerns), resellers are also free to sell “below MAP.” However, we structure our manufacturer MAP policies so that anyone selling a product below MAP is no longer able to “restock” that product going forward.
Why is MAP necessary?
MAP policies are necessary because of the rise in popularity of online marketplaces. Online marketplaces have upended traditional retail and e-commerce, and promote a “race to the bottom” effect by sellers.
The race is largely a phenomenon caused by Amazon and its “Buy Box.” When a customer on Amazon purchases a product, the seller whose name is listed under the “Buy It Now” button is the seller who receives compensation for the sale. When a manufacturer’s product is sold and there is no MAP policy in place, sellers will compete on price for that Buy Box. This is because the number one determinant of who is in the Buy Box is the seller’s price. Some sellers even use automated repricing software to change their prices by pennies to undercut competitors, with some repricing software changing the price as often as every 15 seconds. If two sellers both have automated repricing software, a virtual free fall can occur as the price races to the bottom toward each seller’s minimum price setting.
Protecting the veterinarians and distributor reps
MAP policies are vitally important to protecting veterinary hospitals and distributor reps. One of the primary reasons that pet parents “showroom” a veterinary hospital is because they can go online and purchase OTC products, often at discounts of 20% to 50% off of what the veterinarian is charging.
MAP policies help level the playing field, and allow veterinarians to compete on quality, convenience, and authentic goods, rather than competing on price. By eliminating the price element, pet parents have every incentive to purchase OTC products from veterinarians, which helps protect the veterinary pharmacy and the distributor representatives who stock those pharmacies.
Does MAP mean that the brand is going direct? Absolutely not. Investment in a MAP policy, and the online enforcement programs that support the MAP policy, means that the brand is serious about protecting pet parents and veterinarians. MAP policies help ensure that the brand takes control over their OTC distribution, so that veterinary distribution is able to compete fairly in the new economy. In fact, some veterinary manufacturers use our technology to monitor online marketplaces for their products so that the manufacturer can ensure their products are not diverted.
The benefits of MAP Enforcement
MAP enforcement protects against more than just price: It detects counterfeits.
The biggest threat facing pet parents and veterinary manufacturers in 2019 is not MAP violations, but rather the rise in counterfeit pet products. Over the last decade, we have seen counterfeit products surface on Amazon in virtually every pet category. From counterfeit pet supplements to counterfeit flea and tick medicine, counterfeit risk is the largest threat to any brand in 2019. Gone are the days of sugar pills, misspelled labels, and water: Modern counterfeits are visually identical in packaging, pill/chew size/shape, and color to the exact product being sold but often lack any of the active ingredients. What’s worse: many counterfeit pet products contain harmful heavy metals, arsenic, lead, and in some cases, cyanide.
Fortunately, brands who utilize our MAP enforcement service are protected against more than just low-price violators. Good MAP enforcement software will tell brands who the sellers are that are selling their goods, as well as the seller’s location and other advanced details about the seller. Additionally, any time a new seller or website begins selling a product that our software monitors, we are notified virtually instantly. If it is a seller we do not recognize, we begin a cyber investigation to determine who they are and how they are selling the product. In some cases, we are able to petition the marketplace for a takedown right away. For example, if we see a seller in Shanghai (China) is selling a product that is made in the United States, we immediately reach out to the marketplaces and advise that there is a suspected counterfeit being sold.
Smart online enforcement
When paired with advanced electronic monitoring software, veterinary manufacturers can take control of their e-commerce presence using Smart Online Enforcement. In our law firm, we utilize an approach that combines our software, investigation, and legal tools to help remove unauthorized sellers and MAP violators. Our software scans the web 24 hours a day, and when it detects potential counterfeits, unauthorized sellers, or MAP violators, we immediately begin taking action.
We use our legal and investigative tools to determine the seller’s true identity and where they are obtaining their supply of products. We also send legal notices to the sellers advising them that they are not authorized to sell these products online, and we work with them to remove their unauthorized products. The end result is that unauthorized sellers, counterfeit sellers, and MAP violators are removed, and pets are protected against potentially harmful products.
Jeffrey Schick, CVPM, ESQ is an attorney committed to the animal health industry. Jeff is the son of two veterinary dermatologists and has worked in nearly every role within the veterinary hospital. Jeff is a graduate of Cornell University and has a Juris Doctorate from the University of Pennsylvania Law School. As an attorney, Jeff focuses his time on helping animal health organizations develop and implement effective e-commerce strategies, including the protection of valuable intellectual property and e-commerce channel enforcement.