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The Price We Pay for Healthy Pets

Navigating Today’s Pet Healthcare Choices

Jonathan Shapiro & Laura Fortner

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PetCareRx Introduction

Who we are• 15 years as a leading online pet pharmacy helping millions of pets• Trusted online resources for pet wellness information and advice• Launching new products and services to make pet parenting easier,

more affordable

Mission: Adding love to the world by enhancing the lives of pets and pet parents

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Today’s Pet Healthonomics

Given our business and mission, PetCareRx is in touch with the challenges

pet parents are facing around managing costs of a happier, healthier pet.

Today, we want to share these perspectives with you as pet parents and pet advocates.

1. Pet Healthcare Today: Cost Trends and Cases

2. Difficult Decisions: Pet Healthcare Sacrifices Pet Parents Are Making

3. Smart Solutions: Better Healthcare Choices for your Pet and Purse

We’re also debuting the results of our first PetCareRx Pet Healthonomics Survey

conducted with over 400 US pet parent panel respondents nationwide, August 2013.

#BarkWorld

#PCRxBW13

@_petcarerx

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Pet Healthcare Today:

Cost Trends and Cases

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Costs of Pet Ownership Rise, While HHI Declines

Annual costs of pet ownership increased over past 5 years*

Annual Dog Cost $1649, up 15%

Annual Cat Cost $1271, up 28%

Pets are living longer Dog average lifespan 11 years

Cat average lifespan 12 years

Lifetime cost of a pet upDog: $15,370

Cat: $11,305

* APPA report 2007-2008, 2013-2014

** March 2007 vs Feb 2013, pre tax and adjusted for inflation and seasonal factors. http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/29/chart-median-household-incomes-have-collapsed-during-the-recession/

*** Assumes after tax HHI $36.7K

Median US HH income declined over last 5 years

from $55.4K to $51.4K, down 7.5%**

REALITY CHECK

Average annual dog expenses = 5% of average HH net income***Average annual cat expenses = 3.5% of average HH net income***

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But those are just the averages.

What if your pet gets sick or develops a chronic condition?

That can completely change the picture…

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When Cancer StrikesOver 6 million dogs and nearly as many cats

diagnosed with cancer each year.*

A dog with cancer could need Chemotherapy $6,000 - $10,000

Radiation $5,000 - $7,000

Surgery $2,500 - $6,000

Medication $3,000 per year**

A year’s worth of Leukeran can cost over

$3,000

Not uncommon to pay $7,000 or more

for treatment

If cancer returns, so could these costs

* Source: Animal Cancer Foundation

** Source: PetCareRx Consulting Veterinarian, Lori Awadalla

“Madonna”9-Year OldShih TzuDx: Bladder CancerRx: Chemotherapy, Prescription meds

Out of Pocket

Expense:

$7,500

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When Diabetes is Diagnosed

Pet diabetes is on the rise in recent years –

up 32% in dogs and 16% in cats since 2006*

A cat with diabetes may need: $ 200 vet check-ins/treatments**

$1,860 insulin***

$ 650 for prescription diabetes food****

= $2,700+ additional every year

Cats with diabetes can keep same average lifespan (12.1 years), if treatment is kept up

If diagnosed diabetic at age 6

and needs care for 6 more years,

that’s an incremental $16,200!

* Source: Banfield’s 2012 State of Health report comparing 2006 and 2011** Source: VPI Pet Insurance claims data 2012*** Source: MSRP**** Source: Hill’s Pet m/d Prescription Diet

“Spitfire”

15 Years Old

Dx: Diabetes

Rx: Insulin @

$1600 /year,

Special Foods @

$1100 / year

Out of PocketExpense:

$2,700 / year

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Pet Healthonomics Survey 2013:

Difficult Decisions

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Today’s Pet Parents Highly Concerned About The Rising Cost Of Pet Healthcare Expenses

• 3 out of 4 pet parents concerned about the rising costs of pet healthcare and their ability to properly care for their pets

• Top ranked pet parent fear:

pet may some day suffer from an acute or chronic condition

#1 concern of 43%, top ranked fear

• This health fear comes with financial fear

afraid of being unable to pay for the healthcare needs of a pet

nearly half respondents named this #1 or #2 concern

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Pet Parents Are Willing To Make Lifestyle Changes To Pay For Health Needs Of A Pet

• 82% of pet parents agree:

“I would consider paying almost any amount of money to keep my pet healthy”

• Pet parents are willing to make sacrifices to fund care for a sick pet

– 87% would give up eating out/going out– 76% would cut back on other household expenses– 71% would skip a trip or vacation– A dedicated 7% would move to a less expensive home– 3% would make the tough choice to give one or more pets away to be

better able to care for their other pets

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Today’s Tough Healthcare Choices

In today’s environment, pet parents are faced with tough choices when to spend on key healthcare related areas for their pets including:

Vet Visits

Vaccinations

Protection/Preventatives

Medications

Many are making difficult decisions and choosing between their pet’s physical health and their financial health.

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Tough Choices: The VetTo visit or not to visit?

• Pet parents report most of their pet spending increase year to year is on annual vet checkups

• Between regular check-ups and surgeries, most dog or cat owners racked up about $650 in vet bills last year*

Implications:

27% of pet parents polled are taking their pet to fewer vet visits as a money-saving measure

43% of cat owners only take their cats to the vet when there is an issue

A whopping 67% don’t take their cats in for their yearly check up

Source: American Pet Products Associationhttp://usatoday30.usatoday.com/money/perfi/insurance/story/2012-03-06/pet-insurance-veterinary-expenses/53388516/1

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Tough Choices: To vaccinate or not to vaccinate?

Average cost of vaccinations:*

Dogs: $70-$255 puppy

$40-$100 yearly boosters

Lifetime cost = $510 - $1,355

Cats: $35-$200 kitten

$40-$100 yearly boosters

Lifetime cost = $519 - $1,410

Implications: • 18% of cat parents and 15% of dog parents polled have cut back on

or declined recommended vaccinations as a cost saving measure

*Source: PetCareRx Consulting Veterinarian, Lori Awadalla

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Tough Choices: Flea & Tick, HeartwormTo protect or not to protect?

Average cost per pet for Flea & Tick and Heartworm protection*

$934 lifetime for average dog

$1,027 lifetime for average cat

Implications:

17% of pet parents surveyed admit cutting back on F&T in order to save money 40% cat parents cut back F&T 13% dog parents cut back F&T

7% pet parents admit cutting back on heartworm preventatives

Only 19% of cat parents polled said they regularly purchase HW medication

*Source: VPI Pet Insurance claims data (http://press.petinsurance.com/pressroom/378.aspx) and Banfield State of Pet Health Report 2012

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Tough Choices: MedicationsTo fill or not to fill that prescription?

Medication costs are rising for common conditions:

1 in 10 pet parents confessed they had taken one or more of these

unhealthy steps to cut medication costs: delayed buying a prescription split pills or used less of a prescription than recommended declined to buy a recommended prescription

Medication Condition Price Increase since 2008

Rimadyl Arthritis 53%

Novox Arthritis 32%

Soloxine Hypothyroidism 83%

Methimazole Hyperthyroidism 60%

Salix Diuretic for kidney, liver, heart disease 180%

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Where Pet Parents Are Cutting Back in Healthcare

Area Sacrifice % Total % Dog % Cat

Vet Visits Making fewer visits 27% 23% 40%

Vaccinations Declining recommended vaccinations due to cost

13%

Preventatives Cutting back Flea & TickCutting back Heartworm Meds

17%7%

13%8%

40%6%

Medications/Rx Delaying purchase, stretching use, or Declining to purchase

10%

Vet Visits and Preventatives areas where the most pet parents are cutting back

Cat parents skipping vet visits and dialing back preventatives

more than dog parents

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Pet Healthonomics Survey 2013:

Smart Solutions / Healthier Choices Checklist

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Ways Savvy Pet Parents Are Managing Pet Healthcare Costs and Getting Better Value Per Dollar

To Do List

Buy Generic

Buy Meds Online

Buy Meds @ Local Pharmacy

Visit In-store Clinic

Invest in Pet Insurance

Enroll in Pharmacy Benefits Plan

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Buying Pet Meds Online

How It Works Purchase discounted meds online through online pharmacy website or by phone with rep Get an original prescription from your vet, mail to online pharmacy Vet can also call/fax in your Rx to online pharmacy; online pharmacy will verify the Rx with

your vet Mail orders shipped directly to your home

Considerations Buying meds at the vet’s office is “often a mistake because vets’ markups over wholesale

start at 100 percent and frequently hit 160 percent, plus a $5 to $15 dispensing fee…” according to Consumer Reports

Look for an online pharmacy with VET VIPPS certification, licensed in 50 states A good choice for preventatives and chronic meds Shipping costs / time – not appropriate for all situations, e.g. acute care needing treatment

now

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Purchasing Pet Insurance

How It WorksEvaluate average premiums per year per pet, deductibles, and pet eligibility Pet insurance premiums can average over $80 a month Pet insurance deductibles can average $125 annually or if per incident, around $60

per incident Most pet insurance companies won’t offer complete coverage for senior pets, starting

at around 8-11 years of age In most cases, need to file claims to get reimbursed

Considerations Timing enrollment - when pet would be eligible and you would be likely to use to

make the most of your investment Cash flow - need to pay upfront for premiums and expenses that get reimbursed

when claims filed Be clear on benefits and how they work – does your vet accept or need go to

participating vet? What services are covered and excluded?

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Enrolling in a Pet Pharmacy Benefit Plan

What Is It New Protection Plus by PetCareRx is a prescription card for pets

How It Works Sign up for a membership for $9.99 per month or

as little as $0.25/day with an annual plan Card members then qualify for the lowest

prices on prescription meds and preventatives Orders are placed online or by phone and shipped for free or picked up in-store at a local

participating pharmacy like CVS, Walgreens if available.

Considerations Works for pets already ill or on medications – no dogs or cats excluded No claims to file – just purchase products at rock bottom members-only prices Could save 74% on cancer drug like Leukeran, 80% on insulin – both add up to

thousands of dollars in savings per year Card offers other savings benefits on vet visits, vaccinations, kenneling and more

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Protection Plus by PetCareRx

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Early Reviews on Protection Plus

We look forward to welcoming you and your pet!

www.protectionpluscard.com

The Protection Plus Plan is going to change the lives of pet owners, making it more affordable for people to keep their pets and provide them a long, healthy and happy life.Paws Rating: Protection Plus gets 4 Paws Up! – Robbin and Joe Everett, TPPC.tv Pets Teach Us So Much

I have three dogs, and the cost of veterinary care can be quite expensive.

This seems like a wonderful and effective program.

- Lynzie, Pet Parent and new Protection Plus customer

We have been considering purchasing pet insurance, but consistently decide against

it because coverage seems to be unpredictable. Would love to try an

alternative that helps lower the yearly medical costs for our pooch.

- Krista, Pet Parent and new Protection Plus customer

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Blogger Opportunity: Fall Pet Healthcare Study

Share the Link to Get Access and Incentives• Today was a first look at some trends and behaviors identified in our first Pet

Healthonomics Survey

• Meaningful topic for us and want to learn more from you and your followers

• Next month, we’re opening up the Pet Healthonomics survey to broader pet parent participation

• Include the survey invite and link on your blog or social media pages to– get early access to our Fall Pet Healthonomics results– be recognized as a contributing partner in our next report – earn special PetCareRx incentives for bloggers and followers who

complete the survey

bit.ly/PetHealthSurvey

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Thank You!

Jonathan ShapiroCEOjonathan@petcarerx.com

Laura FortnerSVP & GM, PetCareRx Networklaura@petcarerx.com

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#BarkWorld #PCRxBW13