Contact Lens Consumer Protection
S. 2480 Talking Points
CONCERNS ABOUT S. 2480
Contact Lens Consumer Protection Act” seeks to amend Public Law 108-164, the Fairness to Contact Lens Consumers Act (FCLCA), by adding a new section that would limit consumer choice as to purchasing options for contact lenses.
Here’s what the online and direct mail contact lens sales industry isn’t telling you:
- S. 2480 is silent on the need for stronger safeguards to prevent further abuses of the prescription verification requirements of the FCLCA by the online and mail order contact lens sales industry. Concern about these abuses, which allow for the sale of contact lenses without a valid prescription, has been expressed very recently by optometrists and ophthalmologists on behalf of their patients, the Federal Trade Commission (FTC) and even contact lens sellers themselves.
- In October 2005, after receiving and evaluating complaints from across the country, the FTC issued a formal warning to 1-800 CONTACTS that cited a “substantial number of complaints” arising from the company’s contact lens prescription verification practices. The FTC directed 1-800 CONTACTS to comply with the consumer protection safeguards required by the FCLCA. In attempting to respond to the FTC’s warning, a 1-800 CONTACTS official laid blame elsewhere and asserted that a competing online contact lens seller was engaged in “a pattern and practice… inconsistent with the prescription verification requirements of the FCLCA and… practices that misle[a]d consumers.”
S. 2480 is unnecessary and conflicts with the findings of the FTC. In its 2005 report to Congress on the contact lens marketplace, required by the FCLCA, the FTC concluded:
“Our examination of these issues – exclusive relationships, private label lenses, and limited distribution lenses – suggests that such relationships are not prevalent in the market for contact lenses and are unlikely to limit competition and harm consumers. Exclusive relationships are rare; private label lenses while more common, still represent a small portion of all sales of soft contact lenses; and limited distribution policies are not widely used. Moreover, our inquiry showed that a common, limited distribution lens or its private label equivalent, was available from an overwhelming majority of outlets sampled. Given that the FCLCA permits sellers to fill prescriptions with equivalent national brand or private label lenses, consumers have a number of channels through which to obtain such lenses. In addition, these relationships may be an efficient way for manufacturers to provide beneficial incentives to their lens distributors, which in turn may lead to increased competition among various brands of lenses. In sum, the theory and the evidence examined do not support the conclusion that these distribution practices harm competition and consumers by allowing prescribers to lock in their patients to supracompetitively priced lenses.”
The Strength of Competition in the Sale of Rx Contact Lenses: An FTC Study
February 2005, Page 33
- S. 2480 seeks to grant an economic advantage to certain contact lens sellers by eliminating entirely the perfectly legal and normal American business practice of limited distribution marketing programs from the mix of contact lens distribution options. Specifically, S. 2480 seeks to require a manufacturer to make any contact lens it produces, markets, distributes or sells available in a commercially reasonable and non-discriminatory manner to prescribers, to entities associated with prescribers and to specified alternative channels of distribution (mail order companies, Internet retailers, pharmacies, buying clubs, department stores, and mass merchandise outlets). Under this system, no limited distribution sales program could be implemented – and no manufacturer or consumer would be protected from the economically harmful “free rider” effect that unscrupulous contact lens sellers could enjoy.
- S. 2480 does not codify settlement agreements reached between 32 State Attorneys General and major contact lens manufacturers. Instead, it deals with unilateral manufacturer conduct that has always been perfectly legal and could never have been the subject of the court case. In fact, the major private label, limited distribution contact lens manufacturer has not been under any settlement agreement and was not a part of the court case brought by the 32 State Attorneys General. Consequently, the settlement agreements have had virtually no affect whatsoever on the contact lens marketplace with respect to limited distribution contact lenses sold over the past five years without any adverse affect on competition in the contact lens marketplace.
- S. 2480 is not substantially similar to the Bennett-Leahy provision that was removed from the Fiscal Year 2006 Agriculture Appropriations bill in 2005, a provision endorsed by 38 State Attorneys General. It has a critical difference in that the previous Bennett-Leahy amendment sought to block contact lenses at the Food and Drug Administration approval level from ever entering into the stream of commerce. S. 2480 would impact contact lenses that are already in the stream of normal commerce by altering the normal American rules of commercial competition. Also, it is a concern to eye care providers that neither S. 2480 nor the amendment rejected in 2005 called for the increased consumer protection safeguards needed in light of prescription verification abuses by the Internet contact lens sales industry.
- S. 2480 does contain exemptions that were not included in the original Bennett-Leahy provision. However, those exemptions do not address the basic economic flaws of the bill, but only serve to highlight how far the bill departs from normal American business principles. And none of the exemptions do anything to address the abuses by Internet contact lens sellers of the current provisions of the FCLCA.
- S. 2480 is substantially similar to legislation that has been rejected this year in Alabama, Florida, Georgia, Indiana, Louisiana, and West Virginia. Only the State of Utah, 1-800 CONTACTS home state, recently passed similar legislation, which took effect on July 1, 2006.