When it comes to the animal health business, the laws of the jungle are what matters. Consider the spat between Bayer and Eli Lilly. Over the past year, Lilly's Elanco animal health unit allegedly used a smear campaign to discredit Bayer in hopes of convincing veterinarians and distributors to end their business relationships with its rival, according to a lawsuit filed in a New York federal court.
Such fingerpointing complaints are, of course, not an uncommon event among drugmakers, especially when it comes to promotional activities. But this latest lawsuit underscores the extent to which the animal health world is an increasingly important business to companies that are finding it harder and harder to develop big-selling meds to treat those two legged-creatures known as humans.
At issue in this case are charges that Elanco last month distributed a 'Dear Doctor' letter to persuade vets that Bayer was selling more flea and tick meds to retailers in order to bolster flagging profits. Elanco hoped to create the impression that, by undertaking such a move, Bayer would hurt vets who rely on selling these items directly to pet owners, according to the allegations in the lawsuit.
For its part, Bayer acknowledges that sales to such chains as PetSmart and Petco did begin last year, but only because so many vets were violating agreements by inappropriately diverting flea and tick meds to retailers and Internet sites. Bayer insists, however, that its sales continue to vets and points to a specially commissioned study that offers vets advice on increasing business.
There is more. Bayer also charges the Elanco effort to "unfairly interfere" with its relationships with vets and distributors is "not accidental or new." From 2007 to 2010, Elanco hired 22 former Bayer employees, "who had knowledge of Bayer’s business and marketing strategies, including knowledge of key customers and of Bayer’s relationships with customers and distribution agents."
And over the past year, Bayer charges that Elanco reps urged vets and distributors to stop buying Bayer products and "to engage in a boycott of Bayer." Consequently, Bayer argues it has lost more than 1,000 vet accounts, which generated more than $16 million in sales in 2010 alone. Finally, Bayer chides Elanco for trying to create the impression that its own pet meds are sold only through vets, when the meds show up on Internet sites, such as this one.
An Elanco spokeswoman writes us that Bayer's bark is worse that its bite: Elanco "believes Bayer's lawsuit is without merit, and Elanco will vigorously defend itself against these allegations" (you can read the lawsuit, the Dear Doctor letter and the study commissioned by Bayer here).
dog pic thx to meagan on flickr