Editor's Perspective

Will the Settlement Change the Industry?

editor's perspective

Will the Settlement Change the Industry?

July 2001

The lawsuit filed in 1994 by the attorney general in a Florida federal court, later joined by 32 other attorneys general, has been settled. Bausch & Lomb, CIBA Vision, Vistakon, the American Optometric Association and 13 individuals were accused of preventing mail order and other non-eyecare practitioner sales of contact lenses. The attorneys general from the most populated states in the United States, who are often paid according to their "success," claimed to protect consumers from unfair trade practices. It appears they did. These attorneys were out to line their pockets and improve their states' coffers as well.

All defendants had claimed there was no conspiracy to prevent free trade. CIBA Vision settled a few years ago. Early this year, B&L settled for an estimated $8 million. Both agreed to sell to mail order and Internet firms as required by the court. The AOA settled in March for $750,000 and agreed not to oppose contact lens prescription release legislation and not to discourage manufacturers to sell to these firms. The individuals associated with AOA settled for $8,000 each. Fortunately, most of the ODs associated with the AOA or a manufacturer had their expenses covered by those organizations. Vistakon's settlement could reach a maximum of $60 million. One estimate puts the value at $100 per consumer who qualifies and complies with the terms of refunds, rebates and examination discounts. Over seven years and 32 states, $25 million of the Vistakon price tag comes to just over $100,000 per year per state AG. So who "won?"

The lay press would lead you to believe the attorneys general won. Objective observers would say that a settlement sure makes the defendants look guilty even if they are not. Your patients will never claim many of the settlement dollars. Everyone will be better off if every patient complies because much in these settlements amounts to a marketing plan. Go to the web sites and see what great deals you can get for yourself and your patients, and ultimately the companies as your patients buy and use more contact lenses.

U.S. District Court Judge Harvey E. Schlesinger's ruling requires Vistakon to sell to discounters, pharmacies, mail order and Internet firms only if they follow state prescription laws. They sell one trial lens or one box of lenses without a valid Rx, and Vistakon does not have to sell to them. Will they still get Vistakon's lenses from the gray market? Will Vistakon benefit from keeping its lenses out of the free flow of commerce, even if that free flow is from despicable sellers? Will the ruling force alternate distributors to comply? I am skeptical, but it is the only hope of bringing our field out of the chaos of nonvalid contact lens Rx filling at this time.

As I've said before, until public health significance and eye damage is proven from illegal contact lens sales, illegal sales will continue. Another possibility is a major mail order pharmaceutical business taking over and legitimizing the field. That may challenge your profitability, but it would be a better alternative to 1-800-NoRxNeeded.