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Senate subcommittee examines new pricing policies for contact lenses
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The Senate Subcommittee on Antitrust Competition Policy and Consumer Rights held a hearing July 30 to explore contact lens pricing strategies initiated recently by contact lens manufacturers that would affect retail price competition, Sen. Amy Klobuchar (D-Minn.) said as she presided over the proceedings.
“This is intended as an exploratory hearing to give the subcommittee and regulators a better understanding of the reasons for the minimum pricing arrangements in this particular market,” Sen. Michael S. Lee (R-Utah) said at the hearing. “Price matters in this market. I’ve heard that as prices go up, consumers may wear their lenses longer than they should, potentially doing damage to their eyes in an attempt to save money.”
Since June 2013, Alcon, Bausch + Lomb and Johnson & Johnson Vision Care have announced new pricing policies whereby they will not provide certain contacts to any distributor if that distributor sells the product to consumers below certain minimum prices, R. Joe Zeidner, general counsel for 1-800 CONTACTS, testified as part of the panel. He said that such “resale price maintenance programs” harm contact lens customers by raising prices and limiting options for consumers to save money.
Millicent L. Knight, OD, CHC, FAARM, head of professional affairs for Johnson & Johnson, said at the hearing that the implementation of a unilateral pricing policy benefits patients by guaranteeing that any discounts are passed on to consumers. She said the new price for Acuvue products “is actually lower than the current national average selling price to consumers.”
The new strategy also replaces the “burdensome rebate process with instant savings,” and the “transparent pricing allows [consumers] to make the best purchasing decision based on quality, clinical need and price,” she said.
David A. Cockrell, OD, American Optometric Association president and a private practitioner, also testified, stressing that contact lenses are a medical device with potential serious health consequences if used unsupervised or without a prescription. He said patients today have more choices for a broader range of vision correction needs, and today’s lenses are much safer, better quality and competitively priced.
Cockrell said the four doctors in his practice use contact lenses from 10 to 15 different manufacturers, each with multiple types and parameters.
George Slover, senior policy counsel for Consumers Union, also a panel member, stated: “Whether the new practice constitutes an antitrust violation from a legal standpoint, from a practical standpoint it is anticompetitive to refuse to allow discounting.
“Consumers will still have the right to shop around, but they will no longer be able to save money by doing so,” he said.
After the hearing took place, a written statement from Alcon Laboratories Inc. was posted on the webcast site.
Alcon said it was concerned that the selling price of its contact lenses would be sufficient to motivate eye care practitioners to invest their time in learning and communicating the benefits to their patients.
Alcon said it believes patients will benefit from this new pricing strategy because more of them would learn about the new technology, Alcon will benefit by recouping its investment and making it “economically viable” to invest in other new technologies, ECPs will benefit by realizing a profit, and online and mass merchandisers will benefit as a result of more ECPs prescribing the product. – by Nancy Hemphill, ELS