Livestock farmer bears the brunt of powerful pharmaceutical industry

Proper use of medicine is important for livestock farmers to achieve the best technical results. The use of medicines also influences the cost price position. Tim van Rijn, founder and board member at Kernfarm, explains what his company does differently from the established order in the veterinary pharmaceutical industry.

1. Can you explain what Kernfarm is and what your company does?
''core farm is a relatively young and small company in the veterinary pharmaceutical industry. Together with my 2 brothers, Gijs and Diederik, we founded Kernfarm 3 years ago. We are an international wholesale company in animal vaccines and medicines. In addition to trading, we also register vaccines. With this we try to be distinctive. Our goal is to make the best medicines and vaccines available to veterinarians and farmers. We are also working on the development of new medicines. Often only 1 medicine or vaccine is available for many animal diseases and viruses. We tap into a broad market by offering good alternatives. Sometimes there is no registered solution on the market at all for a particular disease. In that case, a medicine can be imported by Kernfarm via the so-called 'cascade scheme'.

2. Can you further explain the term 'cascade scheme'?
“In Eastern Europe, for example, there are vaccines on the market that are not available in the Netherlands and are also not registered. This scheme gives veterinarians and livestock farmers the option of using unregistered vaccines, if deemed necessary for a particular disease. Of course, there are laws and regulations associated with this. In concrete terms, this means that, at the request of the vet, we look abroad for a comparable medicine or vaccine and make it available. It also regularly happens that medicines are out of stock at the large pharmaceutical companies. Even then, we are often able to make a good alternative available at short notice.”

3. Are the prices of drugs and vaccines kept artificially high by the big pharmaceutical companies? And is this broken by your approach?
''Yes and Yes. The pharmaceutical industry is a fairly conventional, traditional business, in which roughly 5 large companies determine the market. These companies are often only interested in the 'commercial medicines'. In other words: the medicines with a high turnover-profit contribution. This means that the focus is mainly on the larger drug groups. Often these pharmaceutical companies have a monopoly (price setter) on many drugs and vaccines. This is of course not in favor of the livestock farmer. We try to counter this with comparable alternatives, which creates market forces. In some cases, that means lower prices. We focus on the smaller product groups, to which the large companies pay less attention. An example of this is botulism in cattle. We offer a vaccine for this, while the big pharmaceuticals hardly pay any attention to it."

4.Can you describe the rotavirus vaccine registration process?
''In addition to (so-called parallel) trade, we also focus on the registration of medicines. For example, we are currently registering a vaccine against rotavirus." This is a common virus in pig farming. "There are vaccines against rotavirus available in the Netherlands, but they are not officially registered for pigs. The use of Kernfarm's rota vaccine for pigs is currently permitted under the so-called cascade regulation. The rota vaccine is therefore already widely used in the Netherlands, despite the fact that it is not (yet) officially registered. Our goal is to get the rota vaccine registered. We expect to have the green light in the course of 2018. Registering vaccines is a tough and tedious process and can take up to 5 years. Incidentally, it is not the case that the government is deliberately blocking the registration of vaccines. By registering a second vaccine, healthy market forces are created. That is what the government is aiming for. Pig farmers can benefit from this, because the monopoly position of certain products is broken. Market forces can only really start when a comparable vaccine is officially registered. Only then can the market be approached proactively.”

5. How objectively do vets prescribe drugs? Or is this mainly determined by availability and dealerships?
“The choice of a drug should be objectively based on its effect, availability and price. Nevertheless, the objectivity of the choice of a medicine is influenced and therefore made more difficult. Of course we believe that veterinarians have the healing process as their goal and act accordingly. Nevertheless, a better market mechanism is likely to arise when a certain drug, or vaccine, has healthy competition from a comparable alternative. I would therefore like to call on veterinarians to present concrete issues to us, so that we can look for good alternatives."

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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