PetMed Express

Business

PetMed Express is an online pharmacy that sells drugs for pets.

Its business directly competes with veterinarians, who derive some of their income from selling pet drugs, which has created problems for the company because it can only fill prescriptions written by a veterinarian. This competition, the company's refusal to disclose to veterinarians where it obtains its drugs and how it handles them, and the company's business practices has created distrust in the veterinary community from early on in the company's history.

PetMed Express is licensed or authorized to conduct business in all 50 states in the United States and has received Vet-VIPPS accreditation by the National Association of Boards of Pharmacy (NABP).

History

Petmed Express was founded in Florida in 1996. Its stock was traded on the OTC Bulletin Board under the symbol PETS from September 1997 until March 2000; in March 2000 the company began the process of becoming listed on the National Quotation Bureau Electronic Quotation Service and became responsible for reporting to the SEC. Marc Puleo, an anesthesiologist, was the founding CEO.

Until 2002 PetMed Express and a company called Savemax Inc. operated in the same premises, shared staff, and operated under the same pharmacy licenses; according to the lawyer for both companies, Savemax was formed because of "a concern over PetMed's liability, and whether it [would] continue."

From 1999 to 2002, PetMed Express and SaveMax were charged with violating the pharmaceutical law in several states. In one instance it was fined by the Environmental Protection Agency for selling drugs in metric doses, and has also received a warning letter from the FDA for selling misbranded drugs.

In 1999, PetMed Express settled charges with the Florida Pharmacy Board for selling drugs that did not have prescriptions, false advertising, poor record keeping, and not labelling drugs correctly; PetMed Express paid a fine of around $30,000, agreed to send its pharmacist for further education, agreed to random inspections, and agreed to provide regular reports to the board.

In 2001, Menderes Akdag became the CEO.

In 2002, PetMed Express and Savemax were fined by the EPA for selling drugs marked with metric doses; the drugs were made by Novartis for sale in Europe and Australia and the doses and labelling were not FDA-approved and Novartis sued the two companies for damages.

In 2002, PetMed Express, this time with Savemax, was again charged by the Florida Pharmacy Board for contracting with veterinarians to write prescriptions for animals they had never examined, for selling animals drugs that had not been approved by the FDA, and for sharing its pharmacy license with SaveMax; PetMed Express agreed to dismantle the program, pay penalties, agree to random inspections, and provide free drugs to the community, and to have Savemax move to a different facility and obtain its own license. The Florida board provided information to national boards and encouraged other state boards to take actions against veterinarians who had worked with PetMed Express to provide prescriptions for animals they had not examined. In the same year, the company settled similar charges in Ohio

In November 2002 the pharmacy board in Texas filed a lawsuit charging PetMed Express with dispensing veterinary drugs without prescriptions. The case was settled in 2006 with a $50,000 fine and three years probation.

The company's 2002 annual report said that its gross profits increased 261 percent in that year and were about $9.5 million and that its sales had increased by 220 percent over the last year.

In 2004 securities class action lawsuits were filed against the company a month after it announced that its earnings were well below the guidance it had provided. The plaintiffs claimed that management had known that its business model competing with veterinarians was not sustainable and that as an unauthorized reseller of drugs, it could not control its supply. In 2005, the lawsuits were voluntarily dismissed by the plaintiffs.

The company was picked 4th among Forbes magazine's 200 Best Small Business Companies in 2006 and number 6 in 2007. BusinessWeek named PetMed Express number 27 of its top 100 "Hot Growth Companies" in 2006.

In January 2007, PetMed Express began airing television commercials featuring actress and animal activist Betty White.