Preventing arbitrage Animals are often prescribed exactly the same pharmaceuticals as humans. The pharmaceutical firms know that people won’t pay as much to save Oscar (elastic demand) as to save Uncle Oscar (inelastic demand) so they set low prices for the veterinary market and high prices for the human market even when the same drug is being sold. Arbitrage is sometimes reduced by making the animal product in inconvenient dosages or forms (do you really want an injectable or suppository designed for a horse?). Most fundamentally, vets cannot legally write prescriptions for humans so the pharmaceutical firms are able to set different prices in the two markets without fear of much arbitrage.

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