B+L Defends Unilateral Pricing Policy (UPP) and Launches New Consumer Campaign/J&J Drops UPP

"Bausch + Lomb has distributed a letter to eye care providers concerning the company's Unilateral Pricing Policy (UPP)," notes Eyewire. Here's the letter: "April 20, 2016 Dear Eye Care Practitioner, Bausch + Lomb has been, and will continue to be, a driving force in advocating for your patients, and for the safe wear and care of contact lenses. We stand committed to providing our unwavering support for you and your practice and for the development of new technology." Read more.

This comes a day after the company launched its new consumer advertising/marketing campaign. "Bausch + Lomb has launched a 360-degree national consumer advertisement campaign, including television, digital, social media and in-office material challenging contact lens-wearers with the question, “Are your contacts still comfortable?” to demonstrate how many digital screen-reliant contact lens wearers can often find their contact lenses uncomfortable. The campaign, starring the “Man of Comfort”, follows a patient throughout her busy day, inquiring at key moments" if he is comfortable. Read more.

Meanwhile "Johnson & Johnson (ticker: JNJ ) had announced that it will discontinue UPP (unilateral pricing policy, which sets a minimum floor price for retail sale) across its contact lenses. While it’s unclear whether competitors will follow suit, feedback from our consultants suggests that Johnson & Johnson’s action is unlikely to materially affect pricing or market share in the contact-lens market," notes Barron's. "It remains to be seen if there will be disruptions associated with Johnson & Johnson’s UPP move that could hurt the company’s performance or help its competitors in the near term. At Vision Expo, we also confirmed that Johnson & Johnson will launch its new contact lens in July, which will be its new silicone hydrogel (SiHy) monthly. We continue to see this launch as potentially disruptive to Cooper’s ( COO ) growth acceleration effort in the second half of fiscal 2016." Read more.

Utah State Attorneys Defend State's Position on UPP of Contact Lenses

"Utah attorneys defending a hotly contested law banning minimum prices for contact lenses argued this week that the state has the right to regulate industry price-fixing even if the products are sold to customers elsewhere," starts the Associated Press post in the San Luis Obispo Tribune. "Any sales by Utah-based retailers are in-state transactions, no matter where the contacts are shipped, the Utah Attorney General's Office said in court documents filed Thursday. State attorneys specifically cite Utah-based 1-800 Contacts, one of the country's largest discount retailers, in their defense of the law.

"Three of the nation's biggest contact-lens manufacturers sued to block the law they say violates interstate commerce rules. Alcon, Johnson & Johnson and Bausch & Lomb argue it was written to help 1-800 Contacts in a bitter pricing war. The three manufacturers sued to block the law and won a temporary injunction, but a federal appeals court allowed the law to go into effect in June.

"The two sides are set to argue before the Denver-based 10th Circuit Court of Appeals in August." Read more.

In Utah, Attorneys Getting Ready to Throw Down about State's Anti-UPP Law

The Salt Lake Tribune recently reported that "an appeals court has given Utah state attorneys more time to respond in a lawsuit over a hotly contested law banning minimum prices for contact lenses that could have wide-ranging effects on the $4 billion industry." Read more.

1-800 Contacts Wins! Federal Appeals Court Will Allow Ban on UPP of Contact Lenses

"A federal appeals court ruling has cleared the way for discount contact lens retailers to drop prices while a legal battle is waged between the state of Utah and manufacturers who want to impose minimum prices on their products," reports U.S. News & World Report. "The decision handed down from the 10th Circuit Court of Appeals in Denver on Friday comes after three of the nation's largest contact lens manufacturers sued to halt a hotly contested law. Supporters, including Utah-based discount seller 1-800 Contacts, say the newly enacted legislation bans price fixing for contact lenses. But opponents, including Alcon Laboratories, Johnson & Johnson and Bausch & Lomb, say it's a brazen overreach that allows discount sellers to violate interstate commerce regulations and skirt industry price standards. Utah's attorney general has said the companies are wrongly driving up prices, and the law is a legitimate antitrust measure designed to enhance competition and help customers. Attorney General Sean Reyes' office didn't have a comment on the decision Friday." Read more.

Attorneys for State of Utah and Contact Lens Manufacturers Parry in Appeals Court

"Utah state attorneys have asked an appeals court to clear the way for a contentious law that bans price fixing by contact lens makers and could have wide-ranging implications for the $4 billion industry," reports the Standard Examiner. "The Utah Attorney General’s Office argued in court documents that the law banning minimum prices set by the country’s biggest contact lens makers is an antitrust measure designed to increase competition and help customers.State attorneys asked the 10th U.S. Circuit Court of Appeals in Denver to lift an injunction blocking the law Tuesday. They were joined by the discount retailers Costco and Utah-based 1-800 Contacts. Suing to block the law are lens makers Alcon Laboratories, Johnson & Johnson, and Bausch & Lomb. They say minimum price are good for customers and eye doctors, and the law was written specifically to benefit 1-800 Contacts." Read more.

While J&J and Costco Duke It Out in California, Costco Sides with Utah about Contact Lens Pricing

"Johnson & Johnson’s contact lens unit on Friday urged a California federal judge to toss Costco Wholesale Corp.’s antitrust suit alleging J&J drives up prices by cutting off retailers that sell its lenses at a discount, arguing its unilateral pricing policies are 'entirely lawful,'" notes Law 360. "Cotsco’s suit is one of many related suits recently filed in California federal court over the allegedly anticompetitive pricing floor. The discount retailer has alleged that other contact retailers pressured Johnson & Johnson Vision Care Inc. to set an anticompetitive minimum retail." Read more.

"Warehouse store giant Costco is siding with the state of Utah in a lawsuit filed over a bill that bans price-fixing of contact lenses," reports Fox 13, the Fox affiliate in Salt Lake City. "In a motion filed Monday in federal court and obtained by Fox 13, Costco Wholesale seeks to intervene in a series of lawsuits filed by contact lens manufacturers against the state over Senate Bill 169, which was signed into law by Governor Gary Herbert last month. Court records show U.S. District Court Judge Dee Benson granted Costco’s motion to intervene. Former federal judge Paul Cassell is representing 1-800-CONTACTS, which is also siding with the state." Read more.

Louisiana Contact Lens Wearer Sues Manufacturers

"A woman has brought an anti-trust lawsuit against several major optical suppliers, alleging unfair trade practices dating to 2013," reports the Louisiana Record. "Jennifer L. Crose filed a class action complaint against CooperVision Inc. of Pleasanton, Calif.; Alcon Laboratories Inc. of Fort Worth; Bausch and Lomb Inc. of Bridgewater, N.J.; Johnson and Johnson Vision Care Inc. of Jacksonville, Fla.; and ABB/Con-Cise Optical Group LLC (a.k.a. ABB Optical Group) of Coral Springs, Fla., in the U.S. District Court of the Eastern District of Louisiana on March 31. According to the lawsuit, the defendants engaged in conspiratorial behavior to artificially control the price of contact lenses. Seeking to represent herself and class members who purchased contact lenses sold by the defendants collectively, Crose alleges that the manufacturers, who allegedly control more than 97 percent of the market, sought to fix, raise, maintain and/or stabilize the product prices by imposing price floor policies (PFPs) originating in mid-2013." Read more.

Consumer Reports Blasts CL Pricing Policies -- Again!!!

"Today the manufacturers that account for about 98 percent of all contacts sold in the U.S. are setting minimum retail prices. Who benefits from denying discounts to price-conscious consumers? High-price retailers, including eye doctors who sell contact lenses directly to their patients. And the eye doctors determine which contact lenses to prescribe for each patient. So each manufacturer wants to stay on the doctors’ 'good list.'" That's represents one of many shots across the bows of the major contact lens manufacturers by Consumer Reports. "Without this warped incentive, contact lens manufacturers would likely welcome retail discounting, because more consumers could afford to buy contacts. Manufacturers would still set the wholesale price, so each retail sale, at any price, would provide the same benefit for the manufacturer. That’s how a healthy competitive market should work. Consumers Union fought this battle more than a decade ago. It used to be that eye doctors wouldn’t even give patients the contact lens prescription, making it exceedingly difficult to get contacts anywhere else but at the doctor’s—and at the price the doctor charged. That finally changed in 2003, when Congress passed the Fairness to Contact Lens Consumers Act, requiring eye doctors to hand over that prescription." Read more.

Utah Bans Unilateral Pricing on Contact Lenses

Utah has become the first state to ban contact lens manufacturers from using Unilateral Pricing Policies (UPP) to set prices for contact lenses. Its legislators signed into law the Contact Lens Consumer Protection Act, according to a press release from 1-800 Contacts. The law will go into effect in May 2015.

UPP programs also are under investigation both by the Federal Trade Commission and by several State Attorneys General. During the past two weeks, attorneys are said to have filed 15 consumer class-action suits against the manufacturers.

Nearly 40 million Americans spend $4.2 billion annually for contact lenses. Johnson & Johnson, Bausch & Lomb, Alcon, and CooperVision began using UPP in 2013. Since then, contact lens wearers reportedly have seen some online prices increase as much as 150%. Read more.