The animal health industry is rapidly evolving through innovation, investment, and changes in consumer behavior. From biotechnology to online distribution, experts say the sector reflects both scientific progress and the growing bond between people and their pets.
In a recent Venable webinar, Chuck Morton, a partner at the firm, said the top ten animal health companies nearly tripled in value between 2013 and 2023—from $55 billion to $143 billion—and the market could exceed $110 billion by 2030. He attributed the expansion to “the humanization of pets,” noting that owners increasingly treat animals as family members and are willing to invest more in their care.
Morton added that private equity has become a dominant force in animal health, with firms investing more than $45 billion in veterinary deals between 2017 and 2022. “There was recurring revenue to be had, lots of high growth potential,” he said.
Jim Nelson, a Venable partner, linked this capital flow to parallels between animal and human health. He noted that we have seen investment in innovation and delivery, particularly when it comes to personal clinics, in the human health space
Veterinary Consolidation and Market Pressures
Consolidation within veterinary care has reshaped the U.S. market, particularly along the coasts. Morton said that 22% of veterinary clinics now belong to corporate chains, giving them purchasing leverage and technology advantages. Yet he noted that the pace of consolidation “is slowing” amid increased regulation and flat pet population growth.
Nancy Zimmerman, who leads business development and external innovation at Dechra Pharmaceuticals, said geography influences the trend. The central U.S. “is much harder to corporatize because of the distance between large urban and suburban areas,” she said. This makes it more difficult for central leadership to have oversight of multiple clinics that are farther away from each other.
Consolidators, she explained, prefer multi-doctor hospitals and are “starting to run out of what they would consider viable hospitals to integrate.” While consolidation abroad can reach 80% to 90%, Zimmerman predicted the U.S. “will always be a little bit slower and have less consolidation than some other, smaller countries.”
E-Commerce, Nutrition, and Technology
The shift toward digital platforms is transforming product delivery. Morton said e-commerce is expected to have “the highest growth rate,” with online pharmacies “transforming prescription fulfillment.” Zimmerman noted that the veterinary industry is looking at how younger generations “like to receive information, receive products, [and] schedule appointments,” and how pharmaceutical firms can take advantage of these trends. “If we could sort out the compliance, that would be one of our main targets,” she said, referencing the challenge of ensuring pet owners administer medications correctly.
Nutrition has also become a frontier for innovation. Zimmerman described “nutrition as medicine,” emphasizing microbiome research and the growing demand for natural ingredients. She cited a new European cat food that combines therapeutic nutrition with a prescription drug, calling it “a great way to fix the compliance problem.”
Wearables and data-driven care represent another emerging field. “We just don’t know what the data means that they’re collecting yet because we haven’t created the big data set,” Zimmerman said. Nelson added that as artificial intelligence evolves, “the value of data will increase,” particularly in research and development (R&D). Zimmerman noted that regulators may soon adopt similar tools, asking how the FDA might “feed our submission into an AI tool.”
Changing Channels and Consumer Behavior
Market disruption is also altering sales strategies. Zimmerman said new entrants face barriers when trying to reach independent veterinary clinics, which still make up 78% of U.S. hospitals, while corporate groups offer scale but tighter margins. In retail, she said Dechra “always want[s] to try to keep our products in our label” but may use white-label partnerships selectively. She observed that many major brands “started as veterinary-only” before expanding into consumer channels.
Looking ahead, Zimmerman said generational change will continue to reshape the industry. “In my generation, everybody just called the vet and asked the vet a question,” she said. “Now there’s multiple other opportunities for the pet owner to access that information.”
As Morton concluded, the animal health market now requires an “interdisciplinary approach” to navigate its scientific, commercial, and regulatory complexity.
If you or your organization have questions about where value is being created in the animal health industry, please contact an attorney in Venable’s Animal Health and Agribusiness Law group.