The chair of the FTC stood behind a podium and told the country that veterinary drug markets are competitive. The same month, two distributors cleared most U.S. vet pharmaceutical wholesale. The same year, the agency waved through another in a five-year string of vet pharma deals that has now passed forty-three transactions. The market is not competitive. The bottleneck is the market.
I’ll grant the agency’s strongest point, which is the only point it has: complex markets deserve complex review, and not every merger is a tragedy. Some consolidation genuinely produces scale economies. Some buyers and sellers find each other more efficiently when the chain shortens. The agency’s job is to figure out when that’s true and when it isn’t. That is the whole job. Forty-three friendly nods is not “figuring it out.”
This is not a scandal. It is a build. Two decades of merger tolerance has produced a vertical chain in which a clinic in rural Kansas buys a single brand of injectable antibiotic from a single distributor who bought it from a single manufacturer at a price set in a conference room. The clinic passes the markup to a farmer who passes it to a herd. When the herd dies, the farmer absorbs the loss. Nobody at the top of the chain absorbs anything — that is what a chain is for.
The sleight of hand is the count. The agency counts transactions, not consequences. Forty-three filings approved over five years, with the agency’s own post-mortems warning that consolidation accelerated faster than expected — and the press release leads with forty-three friendly nods. Forty-three is a number for a press secretary. Forty-three is the number of decisions to let the manufacturer-plus-distributor layer absorb the rest of the market and call the outcome consumer-friendly.
The wage data is the receipt, and it is older than the vet pharma deals. Real wages for the bottom half have barely budged in two decades. The S&P 500 has multiplied. Worker productivity has nearly doubled. The market works. The market works for shareholders, and only for shareholders, and the agency’s stated job is to keep it working for the rest of us. It is not doing that job.
We have the analogues, and they are not flattering. Insulin: three manufacturers, rationed death. Airlines: four carriers, fare, fee, and a refund that arrives in eight business weeks. Hospitals: fifteen hundred consolidated systems, surprise billing on the way out the door. In every case the agency looked at a vertical chain, counted the filings, found that competition had not been substantially lessened, and let the chain tighten. The pattern is not failure. The pattern is the policy.
I keep returning to one of those analogues because it is the one the agency never speaks of. The farmers and the clinics and the small-town vets are not abstractions to me. I grew up in a county where the vet knew your herd by name and the drugstore knew your kid by name. That world is being consolidated out of existence by a chain that nobody at the chain will ever have to stand in. The chain wins. The county loses. The agency calls it competitive.
So what is the alternative?
Here is the counter-model. A public animal-health authority — call it the Veterinary Drug Supply Authority — would procure generic and off-patent veterinary medicines through compulsory licensing where manufacturers refuse to supply rural markets at reasonable cost, hold the inventory in a federal stockpile, and distribute through a national wholesaler to any licensed veterinary practice at cost plus a fixed handling fee. It would set reference pricing for the manufacturer tier on its books, the way Medicare sets reference pricing for hospital outpatient drugs. It would not replace private manufacturers. It would set the price ceiling that their monopoly power currently sets for them.
That is the buy-side counter-model the agency should be defending and is not. It breaks the manufacturer bottleneck not by trustbusting the manufacturer but by buying around the manufacturer. The wholesaler holds stock. The clinic orders from the wholesaler. The farmer pays the wholesaler’s price plus a transparent markup. The bottleneck becomes a chokepoint that prices itself.
Here is the closing mechanism. Sectoral bargaining for veterinary technicians, clinic workers, and animal-care staff — a wage board structure under state labor authority that sets minimum standards and benefits across the industry, tied by statute to the procurement-cost index that the new wholesaler uses. When the wholesaler drives down the drug price, the wage floor rises with it. The two prices travel together. This is not a vibes sentence about paychecks. This is a wage board, a procurement floor, and a statutory tie between them.
The remedy stack, then. First, mandatory pre-merger review with a presumption against any further consolidation in the manufacturer-plus-distributor layer. Second, the Veterinary Drug Supply Authority on the buy side — public wholesaler, compulsory license where supply fails, reference pricing on the manufacturer tier. Third, sectoral bargaining for vet staff and clinic workers, indexed to the new procurement cost. Fourth, employee co-op conversion on consolidation: any clinic absorbed by a corporate chain that exceeds a regional market threshold has a five-year window for staff to buy it back as a worker cooperative, with federal bridge financing.
The agency should not behave better. It should be replaced on the buy side by an institution that cannot merge its way to monopoly because it is not a company. That is what the alternative looks like. That is what we build.