Stonehaven Analytics reports that there are over 40,000 veterinary clinics in the United States as of March 2025, staffed by more than 100,000 veterinarians. The Boston Kisaco Animal Health, Nutrition, and Technology Summit, held from May 13th to 15th, prominently emphasized the urgent need for innovation and operational efficiency in these veterinary practices. Discussions revolved around what the disruptive shifts are doing to change the business models of veterinary hospitals, keeping in mind the evolving demands of today’s pet parents. Among these clinics, 75% are small animal practices, with 30% structured as corporate entities. Notably, consolidation continues to increase, as there are now over 500 chains or veterinary groups operating multiple locations within this segment. This consolidation has dramatically influenced decision-making for industry partners, workplace culture, pricing strategies, and the adoption of technology aimed at driving efficiency. Most significantly, we are witnessing a fundamental disruption in the companion animal value chain. The transition to online retail has accelerated over the last 20 years, particularly during the COVID-19 pandemic. This shift has fundamentally altered the go-to-market strategy, with direct consequences for distribution business models. The following three key changes must be acknowledged:

1. Online pharmacies serve as a vital resource for many veterinary clinics, enhancing customer engagement, managing prescriptions, and facilitating last-mile delivery. These pharmacies are either directly owned by veterinarians or operated by distributors.
2. VetCove, a B2B e-commerce aggregator, consolidates supplier catalogs, enabling veterinarians to effectively compare prices, product availability, and promotions.
3. As regulations evolve, the sale of prescriptions and over-the-counter products through online retailers is increasingly common. These retailers excel in data collection and mining, allowing them to anticipate consumer demand and preferences with precision.

What does this mean? Prescription and over-the-counter product sales are poised to continue shifting online, as pet parents increasingly prefer purchasing repeat prescriptions over the internet, especially in response to the growing prevalence of chronic diseases. It is imperative to grasp these dynamics as we analyze the drivers behind the changing go-to-market strategies. As manufacturers stream their most significant and profitable brands into direct sales channels, distributors face dwindling access to end customers. This transition shifts the control of demand generation from distributors to animal health companies. With consumer preferences gravitating toward online shopping, veterinarians encounter diminishing prospects for earning margins on product sales. Consequently, there is a marked preference for products—particularly injectable formulations—that necessitate administration in clinical settings. At the same time, a rising demand for affordable generic products underscores the importance of price as a decisive factor in purchasing decisions among pet owners. Ultimately, B2B e-commerce aggregators are redefining the traditional business landscape through heightened price transparency among suppliers. This transparency is set to intensify pricing competition within veterinary practices, allowing them to easily and efficiently compare prices across various suppliers.  While these changes can be daunting, change is necessary in the veterinary space where broken business models are not sustainable and need improvements.