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.

Fight against Unilateral Pricing Policies of Contact Lenses Grows

"Costco and online sellers like 1-800 Contacts would love to sell you cheaper contact lenses. But in recent years, the country’s biggest contact manufacturers have instituted minimum prices for their products that make it impossible for retailers to offer them at lower price points," reports Time magazine. "In testimony before Congress last summer, the Consumers Union declared such policies 'uncompetitive' and tantamount to price fixing: 'Consumers are denied more affordable alternatives. They pay more than they need to, and sellers who would like to make those affordable alternatives available are denied the opportunity to do so.'" Read more.

Appeals Court Halts Utah's Ban on Unilateral Pricing Policies for Contact Lenses

"A federal appeals court has halted a new Utah law banning price-fixing for contact lenses that could have wide-ranging implications for the industry amid a fight between manufacturers and discount retailers," reports WRAL. "Lens maker Alcon Laboratories cheered the order Thursday. Along with Johnson & Johnson and Bausch & Lomb, the company says the law is an unconstitutional overreach written to benefit Utah-based online discount retailer 1-800 Contacts." 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.

New Jersey and Oregon Fight Anti-Unilateral Pricing Programs for Contact Lenses

"Oregon has become a battleground," reports KGW.com. "'As more and more consumers figure out what's going on, they're going to be more and more outraged,' said Bryan Kohler, a lobbyist for 1-800 Contacts. The company is pushing legislation in Oregon that would stop contact lens makers from setting a minimum price on contacts. Over the past year and a half, all four major contact lens manufacturers enacted policies that restrict what retailers can charge for contact lenses. These new minimum pricing policies mean discounters like 1-800 Contacts and Costco can no longer sell contacts at a lower price than their competitors. Costco argues these new policies are anti-competitive because they limit buying choices for the roughly 39 million Americans who wear contacts." Read more.

In New Jersey, "putative class action suit filed in federal court in Newark accuses four manufacturers and a distributor of disposable contact lenses of conspiring to eliminate price competition by entering into illegal resale price maintenance agreements with retailers," reports a NJ Law Journal post. Read more.

These two states join a growing list of states looking to ban unilateral pricing programs, such as Idaho, Illinois, and California. and Utah, which has already signed a ban into law.

Idaho, Illinois, California Consider Bans on Unilateral Pricing for Contact Lenses

"Idaho, Illinois, California and several other states are considering legislation that would bar contact lens makers from setting price floors that make discounting impossible," reports Reuters. "Last week Florida became the latest to act on a bill, when its Senate Health Policy Committee approved a measure that would ban the price floors, according to a senate staffer. The bill is backed by Tom Lee, the chairman of the state Senate Appropriations Committee. To read the full story on WestlawNext Practitioner Insights, click here: bit.ly/1MmZpmN ."

Earlier this week Utah banned the practice. See OpticalCEUs post.

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.