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UPPs may improve technology, service
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A colleague recently asked me what I thought of the contact lens industry’s unilateral pricing policies, and I told him I had not given it much thought. I have always believed that by working hard, prioritizing patients above everything else and competitively pricing materials, we would do just fine. For the past 25+ years, it has been a strategy that has worked extremely well.
However, his question piqued my curiosity. Who benefits from the implementation of unilateral pricing policies (UPPs), the manufacturer, patient, prescriber or contact lens retailer?
UPP is not unique to the ophthalmic industry. It has been around for nearly a century and has permeated pretty much every industry. Just think of something you have wanted to purchase and after much research found that nobody offers it below a certain price. It may seem akin to price fixing. However, with UPP, a manufacturer unilaterally determines a product’s price point. In the contact lens industry, patients, prescribers or retailers simply elect to comply with the manufacturer’s contract and utilize the product – or not. Like any contract in life, we agree with the terms and comply or respectfully decline and move on.
Does this ultimately mean only the contact lens manufacturer benefits from UPP? Hardly. In an era in which far too many industries have fallen victim in a self-imposed race to zero, UPP may ultimately provide the contact lens industry much needed stability and sustainability. I am sure manufacturers consider many variables in setting a specific UPP, not the least of which is a commitment to research and development.
In fact, it is interesting to note that many of the contact lenses under UPP agreements are among the industry’s elite products. They represent the latest technology platforms, providing exceptional vision, comfort and eye health. As I am sure many of you would agree, they are contact lenses that have been tremendously successful for previous dropouts and new wearers alike. In short, they are making patients happy and growing the industry, which is certainly good news for patients, prescribers and anyone who retails contact lenses.
Michael D.
DePaolis
Perhaps, I am a bit naïve, but I am optimistic UPP will provide manufacturers the resources necessary for developing the next generation of contact lenses, thereby assuring patients an even more enjoyable wearing experience.
Of course, a concern for all of us is whether UPP will lead to grossly inflated contact lens costs. This certainly does not seem to be the case, as manufacturers appear to be carefully structuring UPPs to actually encourage a lower average retail cost for many products. As competitive forces come into play, contact lens sellers will ultimately strive to meet the UPP, essentially deemphasizing price. The result? Patients benefit as retailers compete to provide the best service possible. It is a welcome trend in a world where the race to zero has crippled many service industries.
I encourage you to take a look at this month’s feature article (“Most ODs support new contact lens pricing strategies”) to see what others are saying about UPP. Regardless of where you fall on UPP, keep an open mind, consider the facts and – most importantly – put the patient’s needs above all.