2015 ANNUAL REPORT
Contact Lenses 2015
Strong growth in some segments and a few surprises highlight a year of modest gains overall.
By Jason J. Nichols, OD, MPH, PhD, FAAO
The New Year has arrived, which means it’s once again that time when we at Contact Lens Spectrum bring you our Annual Report on contact lenses, with a particular focus in this report on 2015. We’ve observed some similar trends to what we have reported in years past, but some of our new findings may surprise you. A lot happened in 2015, so buckle your seatbelts and get ready to accelerate these findings into your contact lens practice.
Overview of General Contact Lens Market Trends
The size of the contact lens market is always a big question, particularly to those in industry and in the financial sectors that focus on eye and vision care. This past year, using population-based survey methodology, the U.S. Centers for Disease Control and Prevention estimated that there are 40.9 million contact lens wearers in the United States age 18 years and older, which is 16.7% of the U.S. adult population (Cope et al, 2015). Contact lens wearers tended to be younger, female, more educated, and Caucasian compared with non-contact lens wearers.
Perspectives into U.S. industry trends tend to show modest gains when comparing 2015 to the same period for 2014. Insights about the U.S. market from ABB Optical Group show that the soft contact lens market is steadily growing; Q1 2015 showed 3.0% growth over Q1 2014, and Q2 and Q3 showed even greater growth over the previous year at 7.5% and 8.6%, respectively. This is great news for the industry and will be discussed further and in more detail relative to categories driving this growth—and once again, there is no doubt that the daily disposable contact lens segment is primarily responsible.
Likewise, insights provided from GfK Retail and Technology (Sonia Martins, business group director, Optics North America) show a slight upward trend in the sales volume for soft lenses in the United States in 2015. GfK data indicate that U.S. sales of soft contact lenses grew 5.2% for the time period from January 2015 through September 2015 compared to the same period for 2014 (where growth was 4.9% for 2014). Lastly, data obtained from Robert W. Baird (Jeff Johnson, OD, CFA, director, senior research analyst) show that as of the third quarter of 2015, the U.S. contact lens market grew just under 4% in 2015 through the first nine months of the year, which is slightly down from last year.
As for the contact lens market size, Baird estimates that the 2015 worldwide contact lens market will finish at approximately $7.4 billion. This value is slightly lower compared to last year ($7.5 billion), which Baird states is entirely due to currency pressures, as underlying market growth (what Baird refers to as constant currency growth) has still been positive in 2015 and probably will end up being close to 4% for the year. Baird estimates that the U.S. market in 2015 is valued at approximately $2.7 billion.
The worldwide market share of the four largest contact lens manufacturers remained stable in 2015, according to Baird’s estimates.
Current Practice Trends
Contact Lens Spectrum also conducts market research in which we ask our readers about their practice trends and patterns both generally and as they relate specifically to contact lens practice. We have conducted this market research for many years, which allows us to conduct some longer-term and longitudinal analyses. Our questions cover a variety of topics including characteristics of the patient base of a practice, business and financial aspects of a practice, fitting and prescribing trends, and care solution trends. This year, 369 U.S. respondents accessed the survey link. As I proceed ahead in discussing trends and observations about the contact lens field, I will draw on information provided through this market research in addition to information from other sources.
Practice and Business Trends Table 1 summarizes trends in practice and business characteristics from 2009 to 2015. Most of our respondents were optometrists (86%), followed by opticians, contact lens technicians, and ophthalmologists, respectively. Modes of practice varied, but the most common was solo private practice (31%), followed by group private practice (27%), and independent affiliation with a retail setting (13%). In 2015, the typical practice saw an average of 124 patients per week (which is similar to what has been reported for the last several years). The patient base of the typical practice was made up of approximately 49% contact lens wearers, and the average number of contact lens fittings and refittings in a typical week was about 29. The percentage of lens wearers reported in the typical practice varies dramatically from what we have reported in the last several years; it is unclear whether these data points reflect anomalies in the data or whether they are valid data points for 2015, but we will watch this closely as we move into 2016.
|Patients seen each week||108||116||107||127||125||117||124|
|% Contact lens-wearing patients||37||36||35||34||34||34||49|
|# CL fits/refits per week||27||27||24||26||25||24||29|
|Estimated % gross practice revenue from CLs||35||34||37||32||30||30||39|
|Estimated % net practice revenue from CLs||29||28||26||27||25||25||27|
Correspondingly, in 2015 most respondents felt that about 39% of their gross revenue and about 27% of their net profit was derived from the contact lens portion of their practices. These values represent marked increases in contact lens revenue in practices compared to what we’ve reported over the last several years, perhaps corresponding to the increase in contact lens wearers being reported in practices as noted previously. Further to this, 65% of practitioners believe that they will see an increase in their overall contact lens practice in 2016, while 30% believe it will stay the same, and 5% believe it will be decreasing further (a fairly similar distribution to the reported expectations for 2015).
Interestingly, ABB Optical Group has evaluated the impact of shipping practice on contact lens prescriptions. The company’s industry data indicate that contact lenses shipped directly to a patient’s home are six times less likely to be returned compared to contact lenses shipped to the practice to be dispensed/picked up.
Lens Dispensing and Mode of Wear Trends As we have reported in previous years, silicone hydrogel materials make up the majority of the fits and refits that are conducted today (Figure 1). In 2011, we noted the first slowing of the silicone hydrogel category; for 2015, our data show that silicone hydrogels have a reported usage of 68% (identical to 2014). Up from last year, data from Contact Lens Spectrum’s market analysis showed that 9% of fits and refits were conducted with a GP, whereas respondents indicated that 6% of fits and refits were done with GPs in 2014. This appears to be at the expense of the hydrogel category, which reported at 21% in 2015 (24% in 2014).
Figure 1. Distribution of material classes used in fittings and refittings.
Data from GfK Retail and Technology show a consistent finding for the U.S. market in 2015, with silicone hydrogels representing 67% of the volume for the soft contact lens market compared with 33% for hydrogels—these numbers are identical to 2014. Similarly, year-to-date data from the ABB Optical Group also show a parallel trend, with silicone hydrogels making up 63% of the market (55% in 2014) and hydrogels making up about 37% of the market (44% in 2014).
As Figure 2 shows, data from Contact Lens Spectrum’s market research show that most of the reported fits and refits are with soft spherical lenses (51%), followed by soft torics (23%), soft multifocals (14%), spherical corneal GPs (4%), and sclerals (3%). This is the first year that we observed scleral lenses being fitted with more frequency compared to toric GP and multifocal GP designs (albeit the percentages are markedly close). Along these same lines, when asked which of several popular specialty lens options would exhibit the greatest growth potential in 2016, most practitioners indicated scleral lenses (37%, compared to 23% last year), followed by custom soft lenses (33%, compared to 45% last year), hybrids (17%, compared to 22% last year), and orthokeratology lenses (13%, compared to 10% last year). Data from ABB Optical Group indicate that the dollar growth of scleral lenses is up 135% year-to-date compared to the same time frame last year, and ortho-k is up 20% year-to-date.
Figure 2. Distribution of lens modalities used in fittings and refittings.
Data obtained from GfK Retail and Technology and the ABB Optical Group show a similar trend for 2015 when comparing what are considered the four major soft lens categories (spherical, toric, multifocal, and cosmetic). As noted in Table 2, data from these two sources are identical in terms of the spherical (61%), toric (26%), and multifocal (10%) categories for 2015. However, the data from the Contact Lens Spectrum market research again differed with substantially less in the spherical category and more in the multifocal category. Over the longer term, when comparing the GfK data to the company’s data for 2009, there are decreases in both the spherical (–2.4%) and cosmetic (–1.8%) categories, but growth in torics (1.9%) and multifocals (2.3%). When the Contact Lens Spectrum readers were asked which soft lens categories they anticipated fitting more of in 2016, 61% indicated daily disposables, followed by multifocals (32%), cosmetic (4%), and torics (3%).
|Soft Lens Category||Contact Lens Spectrum||ABB Optical Group||GfK Retail and Technology||Change from 2014|
In terms of replacement schedules, Contact Lens Spectrum’s market research indicates that most of your patients are using monthly replacement (45%) schedules (Figure 3 and Table 3). Two-week replacement showed a modest decline at 26% this year (30% in 2014). However, as noted over the last few years, the daily disposable category again showed modest gains—this year at 28% of fits and refits. In 2012, our data showed the daily disposable category to be at 17%, and in 2009 it was at a mere 11%.
Figure 3. Distribution of replacement schedules used in fittings and refittings.
|Soft Lens Category||Contact Lens Spectrum||ABB Optical Group||GfK Retail and Technology||Change from 2014|
We also gleaned market insights from GfK Retail and Technology and the ABB Optical Group in terms of replacement schedule usage (Table 3). When comparing the data between the three groups, a similar sort of trend emerges—that is, the monthly category still holds the most market share, the weekly/two-week category shows declines, and the daily disposable category is associated with continued growth; according to GfK and ABB, this growth is somewhere between 17% to 21% over 2014 and does not appear to be slowing in any way whatsoever. Even further, ABB Optical Group shows that more than 80% of the growth in the frequent replacement lens category is driven by growth in the daily disposable segment of the category.
When asked about the contact lens design or modality with the greatest growth potential/anticipated use over the next year in a very broad sense, 78% of respondents in our market research indicated silicone hydrogel daily disposables (68% in 2014), followed by silicone hydrogel multifocals (63% versus 65% in 2014), silicone hydrogel torics (50% versus 45% in 2014), cosmetic lenses (43%), and hydrogel daily disposables (42% versus 46% in 2014).
For presbyopic patients who wear contact lenses, most practitioners continue to indicate a strong preference for multifocal lenses (71% in 2015 versus 70% in 2014) compared with monovision (19% in 2015 versus 22% in 2014), and over-spectacles (10% for 2015 and 8% for 2014), which has been the case for several years now. In practice, more of your presbyopic patients are prescribed a multifocal (48% of your contact lens-wearing presbyopes versus 46% in 2014) compared with monovision (31% of your contact lens-wearing presbyopes versus 36% in 2014). Soft multifocals (42% of presbyopic lens wearers) and soft monovision (28%) make up the bulk of the presbyopic correction modes for contact lens wearers, and these numbers appeared to remain relatively stable this year compared to years past.
Myopia control with contact lenses is certainly a growing practice in the contact lens community. In 2015, 24% of Contact Lens Spectrum Reader Profile respondents indicated that they actively practice myopia control with contact lenses (identical to 2014). Of those who are practicing myopia control (Figure 4), most do so with orthokeratology designs (57%), followed by soft multifocals (41%), and GP multifocals (2%). This differs dramatically from what was reported in 2014, in which most reported using soft multifocals for myopia control.
Figure 4. Contact lens modalities used by practitioners who reported practicing myopia control.
Forecasting into 2016, most practitioners felt that their overall contact lens practice would increase (65%) or stay the same (30%) as opposed to decreasing (5%). In terms of specific categories, as noted previously, the three types of contact lenses that the majority of respondents predicted that they would be increasing in terms of utilization (compared to either staying the same or decreasing) were silicone hydrogel daily disposables (78% of respondents), silicone hydrogel multifocals (63% of respondents), and silicone hydrogel torics (50% of respondents). What is interesting, though, is that similar to last year, although practitioners anticipate using silicone hydrogel materials and designs to a greater extent, this has not translated into measurable changes in the percentage that the material category is used as a whole (Figure 1).
Contact Lens Wear and Care Compliance
Our data on practitioner-perceived compliance shows a relative trend since 2009: as Figure 5 shows, practitioners indicated that only 41% of their patients using one- to two-week replacement lenses were compliant with the replacement schedule, whereas practitioners indicated that 63% of their patients using monthly lenses were compliant, and 75% of their patients using daily disposable lenses were compliant. Generally, practitioners indicated that about 66% of the overall contact lens patients in their practice properly comply with replacement per instruction. The trends observed this year are similar to what we have reported in prior years.
Figure 5. Practitioner-perceived patient compliance associated with lenses of various replacement schedules.
Lens Care Trends
According to our survey, the vast majority of respondents reported using chemical care systems (72% in 2015 compared to 80% in 2009) with their contact lens patients, followed by hydrogen peroxide-based systems (27% in 2015 compared to 20% in 2009), which has been a similar trend over the last several years (Figure 6). Our data show that you also recommend care systems with your contact lens patients—86% of you are recommending specific brands of lens care systems to your contact lens patients, whereas 14% of you are not—identical to what we reported for 2014. The largest factor in your selected recommendation is improved comfort (28% compared with 24% in 2014), followed by lens material/solution compatibility (25%), disinfection efficacy (24%), and then cleaning efficacy (11%), convenience (9%), and cost (2%).
Figure 6. Lens care systems prescribed to patients from 2009 to 2015.
Yesterday, Today, and Tomorrow
As part of our Annual Report each year, we always enjoy sharing what was happening in the contact lens industry a decade ago based on what we covered in the Annual Report from that year. This year, we’ll also take it a step further. This is a very special year for us, as 2016 marks Contact Lens Spectrum’s 30th Anniversary. We thought it would be interesting to also look back at our premier issue from January 1986 to share what Founding Editor Neal J. Bailey, OD, PhD, reported on “what happened and what’s likely to happen” in the industry in 1985.
We also will discuss some of the significant events that occurred and trends that emerged during 2015 and how they may affect the industry going forward.
A Look at 1985 While there was no contact lens event of the year reported for 1985, the most significant news discussed in Dr. Bailey’s inaugural Annual Report related to hydrogel lens extended wear, specifically the number of corneal ulcers that it was causing. Dr. Bailey stated, “Soft hydrogel extended wear lenses, for the past six years the real ‘darlings’ of the patient and clinician in the United States, may have come a cropper. Reports of many serious corneal ulcers as a result of extended wear of soft lenses have reached us, and, as must be very obvious to our readers, they have also reached the wire services...” Dr. Bailey concluded that, “Only better doctor-patient-manufacturer compliance in an atmosphere in which each really cares can produce happier extended wear data.”
Also reported by Dr. Bailey was the fact that most contact lens laboratories reported very flat sales in 1985, which was likely impacted by this extended wear “ulcer scare.” He reported that the size of the contact lens market was somewhere between 14 million to 19 million wearers in 1985, which was about the same as the 14 million to 18 million wearers estimated in 1984. Soft lenses were estimated to account for about 60% of all of the lenses in use, with soft lens wearers purchasing 65% to 70% of the lenses sold in 1985. PMMA had gradually dropped to about 20% of lenses purchased, and GP lenses were worn/purchased by the remaining 20% to 25% of wearers. The greater availability of tinted lenses was believed to have a hand in slightly increasing the sales of daily wear soft lenses in 1985 compared to 1984; however, it was noted that patients were unlikely to purchase multiple pairs of clear or tinted lenses, meaning that “Tinted lenses can add materially to the storage/stock problem of both the doctor and the suppliers of tinted lenses.” The GP industry was on the rise in 1985, but Dr. Bailey noted that, “Analysts generally believe that the soft lens will remain as the dominant lens for at least the foreseeable future.”
A Look at 2005 The year 2005 in contact lenses was highlighted by significant advancements in contact lens and lens care technology, with Joe Barr, OD, MS, FAAO, Contact Lens Spectrum’s editor at that time, noting that in 2005, contact lenses “have and will provide better vision while allowing better comfort and in many cases better corneal and anterior segment health. Never before have contact lens manufacturers delivered so many new, better, truly unique lenses and lens care products in such a short period of time.”
That said, Dr. Barr went in a different direction in choosing the 2005 event of the year. He said, “The event of the year that I believe will impact our field more than anything else is the removal of proposed legislation that would force the FDA to approve products only when manufacturers agree to sell to all channels of trade.” A proposed amendment to the legislation, HR 2744 titled “Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2006,” would have “restricted the FDA from reviewing any applications from companies that do not make lenses available directly to all channels of distribution such as mail-order houses, Internet retailers, pharmacies, buying clubs, and other distribution alternatives.” In considering what may have prompted such legislation, Dr. Barr noted, “Certainly it wasn’t an interest in increased public health and healthy contact lens wear. It was certainly economically motivated.”
Dr. Barr reported that there were about 36 million contact lens wearers in the United States in 2005, representing 20% to 35% of many practices. Globally, in 2005 the number of lens wearers who wore disposable and planned replacement lenses approached 90%. Daily disposables represented 6% of lens wearers, with “growth expected in this modality.” GP lenses at that time represented about 6% of the global market (approximately 10% to 13% of the U.S. market). Overall, the U.S. contact lens market grew about 10% in sales dollars in 2005.
Silicone hydrogel lenses were very much on the rise in 2005. Dr. Barr reported data from the A.C. Nielsen Company indicating that “For the bimonthly reporting period ending in February 2005, audited U.S. retail sales of silicone hydrogel lenses increased by 161% over the previous year, driving total soft contact lens sales up 12%. Silicone hydrogels accounted for 19.4% of soft lens retail sales, compared to just 8.3% in January/February 2004.”
The first of the new generations of hybrid lens designs also debuted in 2005.
Now Back to 2015 What were the most significant events and developments of 2015 that will have the most impact on the future of contact lenses? First and foremost, one we feel that we just can’t emphasize enough, is the passing of Professor Brien Holden. Brien’s efforts during his lifetime played a significant role in advancing contact lenses to where they are today. In addition, his tireless efforts to prevent avoidable blindness and to bring sight to the disadvantaged around the world are unmatched, and will likely never be matched. We all must step up to carry on his legacy and help fill the void created by his absence.
Our Contact Lens Spectrum Practice Profile data showed interesting changes in patient trends. It's too soon to tell whether these are actual trends—but if they are, what could be the cause?The new healthcare laws? The growing interest in specialty lenses? More patients seeking cosmetic lenses, which did show some modest gains in 2015? The switch to electronic health records, which may help improve efficiency? We look forward to seeing what next year’s numbers reveal.
Our data also indicate that the percentage of readers who actively practice myopia control with young patients remained stable compared to 2015 at 24%. We continue to predict, as we did last year, that once devices for myopia control are cleared and commercially available in the United States, the practice of myopia control with contact lenses will skyrocket.
As I mentioned in last month’s Editor’s Perspective, we are poised to enter an era of truly high-tech contact lens options. While a glaucoma monitoring device has been commercially available for some time, developments reported in 2015 indicate that we may see lenses that can monitor blood sugar levels for diabetic patients, lenses that can change focus based on wearers’ needs for both low vision and presbyopia, and lenses that can provide super human vision and augmented reality experiences within the next few years.
Expanding options in toric and multifocal designs in the silicone hydrogel daily disposable contact lens category will continue to have a significant impact on this modality’s influence going into 2016. In a category that was already growing rapidly because of improved ocular health and convenience, these new design options will serve to even further fuel growth.
One business practice trend that we noted in 2015 related to online contact lens ordering capabilities. Contact Lens Spectrum’s News Spectrum reported on online ordering systems that are tied directly to private practices several times last year. With more patients (consumers) choosing to do their shopping online, it’s becoming increasingly important for eyecare professionals to provide that capability for patient convenience and improved ocular health.
A number of company mergers and acquisitions occurred during 2015 that will also impact the industry in a number of different ways. Of particular interest is the combining of two companies that may lead to new treatments for dry eye, and one acquisition has had a strong, but as yet not completely resolved, impact on the specialty lens segment of the industry. It will be interesting to see how this latter merger impacts specialty lenses, in which interest is clearly still growing as evidenced by both our Practice Profile data and by the highest-ever pre-registration numbers for our annual Global Specialty Lens Symposium, set to take place later this month in Las Vegas. CLS
Special thanks to Lisa Starcher and Deborah Fisher for their help in writing this article.
For references, please visit www.clspectrum.com/references and click on document #242.
Dr. Nichols is an assistant vice president for industry research development and professor at the University of Alabama-Birmingham as well as editor-in-chief of Contact Lens Spectrum and editor of the weekly email newsletter Contact Lenses Today. He has received research funding or honoraria from Vistakon, Alcon, and Allergan.