Rising Veterinary Costs Driven by Private Equity Consolidation Prompt Calls for Regulatory Action

Documentary filmmakers approached me to discuss the film "New York Cat Crisis," sparking my reflection on the responsibilities businesses have regarding human rights related to health care. While human rights law primarily addresses health care access, it does not extend significantly to pet care, which is increasingly under pressure from private equity (PE) firms.

Since 2017, private equity has invested over $50 billion into U.S. veterinary care, leading to significant market consolidation. Corporate consolidators, including both PE and non-PE entities, now manage more than a quarter of general practices and three-quarters of specialty veterinary clinics in the U.S. Similar patterns have emerged in the UK, where six corporate groups, including three private equity firms, have cornered roughly 60% of the veterinary market.

As veterinary care costs have surged—rising nearly twice as fast as inflation in both the U.S. and the UK—many pet owners face financial strain. In the U.S., approximately 96% of pets are uninsured, a stark contrast to the 8% of humans who lack health insurance. Unlike human health systems, there are no mandated emergency veterinary services, leading to concerning trends such as rising stray cat populations in urban areas like New York City.

Antitrust policies are increasingly viewed as a solution to the challenges posed by market consolidation in veterinary services. During the Trump administration, the Federal Trade Commission (FTC) required certain companies to divest veterinary clinics to prevent monopolistic practices. The Biden administration built on this by imposing further divestment requirements and pre-approving future acquisitions in specific urban areas.

In March, the UK Competition and Markets Authority conducted a thorough investigation and determined that leading veterinary consolidators distorted competition and contributed to rising prices. In response, UK regulators are requiring clearer labeling of corporate-owned practices, capping prescription fees, and mandating price transparency. Proposed reforms aim to establish regulatory oversight of veterinary businesses, including the creation of a Veterinary Ombudsman to address consumer complaints.

While the UK model sets an important precedent, U.S. states are beginning to explore similar regulatory frameworks. Colorado has strengthened its reviews of veterinary practice acquisitions, and there are ongoing discussions in New York and North Carolina regarding tighter controls on corporate veterinary practices.

One key observation from "New York Cat Crisis" is that, amid rising living costs, communities are struggling with the consequences of pet abandonment and welfare issues, which regulatory approaches have not fully addressed. To better support animal welfare, it would be beneficial for regulatory bodies to ensure that a portion of veterinary business revenues is directed toward local rescue and spay/neuter services. Corporate entities should also consider funding these services to maintain good community relations and mitigate the need for extensive regulation.