2014 ANNUAL REPORT
Contact Lenses 2014
The industry maintained healthy growth in 2014, with some categories poised for strong expansion.
By Jason J. Nichols, OD, MPH, PhD, FAAO
What happened in the contact lens field 2014? It was quite a year indeed! Although many practitioners told me that they thought it was a “sleepy” year, this annual report may convince you otherwise. There was indeed a lot of action in the field, sometimes behind the scenes, and I believe that the contact lens market remains a strong and vibrant one. Time will tell what the long-term impact will be of several of the events that we’ll talk about in the paragraphs to come.
Overview of General Contact Lens Market Trends
Estimating the actual size of the contact lens market each year remains a challenge. In general, estimates from market research and other industry sources allow us to hone in on a quantitative figure, at least for the United States. For 2014, the Vision Council’s VisionWatch report estimated that there were 39.2 million contact lens wearers in the United States. Of these, 34.3% are male, and 65.7% are female; the age-based distribution is as follows: 48.0% are 18 to 34 years old, 22.5% are 35 to 44 years old, 16.3% are 45 to 54 years old, and 13.2% are 55+ years old.
In terms of sales estimates, there were low-to-moderate gains in 2014 compared to the same period in 2013. Soft contact lens sales volume trended up slightly in the United States according to data obtained from GfK Retail and Technology (Jim Fleckenstein, vice president Optics-North America), growing 4.9% for January 2014 through September 2014 compared to the same period for 2013 (in which growth was 4.7%). ABB Optical Group similarly reported a 7% increase in soft contact lens sales in the United States during the same period for 2014. However, the ABB Optical Group data also demonstrated a slight decline of −0.7% in the GP lens category in 2014 compared with the same period in 2013.
Data from Robert W. Baird (Jeff Johnson, OD, CFA, director, senior research analyst) indicates that U.S. sales grew a healthy 5% through the third quarter of 2014, with worldwide sales just under 5% (after excluding the impact of recent fluctuations in foreign exchange rates).
Regarding the size of the contact lens market, Baird’s 2014 data places the current value of the worldwide and U.S. markets at approximately $7.6 billion and $2.5 billion, respectively. The Baird data further estimates that the four largest contact lens manufacturers remained fairly stable in 2014 in terms of worldwide market share.
It’s interesting to note that in spite of the reported 5% year-to-date growth, the Baird data also show that growth in the U.S. contact lens market slowed to 2% in the third quarter. Baird believes that this largely reflects temporary timing issues and disruptions tied to distributor purchasing habits in addition to recent manufacturer-led rebate/policy shifts, including recent Unilateral Pricing Policy (UPP) efforts by some companies. Over the next quarter or two, Baird expects those issues to largely normalize and that the U.S. market growth will return to more historical 4% to 5% rates.
Current Practice Trends
Every year, Contact Lens Spectrum surveys our readers about trends and patterns in their practices, both in general and in the contact lens segment of their practices. For more than five years, we’ve kept the structure and general content of our survey questionnaire consistent to provide the benefit of long-term perspective regarding practice trends. We ask practitioners questions about their patient base, business and financial topics, patient management and preferences, and trends in contact lens prescribing and care solutions. This year, 572 respondents from the United States accessed the survey link. I will use this market research as well as the data sources mentioned previously to present current trends and perceptions about the contact lens field.
Practice and Business Trends Table 1 shows practice and business trends from 2009 to 2014. Our respondents were mostly optometrists (89%), with opticians, ophthalmologists, and contact lens technicians following. The most common mode of practice was solo private practice (54%), which was followed by group private practice and retail setting. A typical practice in 2014 saw 117 patients per week on average. Contact lens wearers represented about 34% of a typical practice’s patient base, and respondents averaged about 24 contact lens fittings and refittings in a typical week; these numbers are nearly identical to those from 2013.
|Patients seen each week||108||116||107||127||125||117|
|% Contact lens-wearing patients||37||36||35||34||34||34|
|# CL fits/refits per week||27||27||24||26||25||24|
|Estimated % gross practice revenue from CLs||35||34||37||32||30||30|
|Estimated % net practice revenue from CLs||29||28||26||27||25||25|
In a similar fashion, most respondents reported that the contact lens segment of their practices represented about 30% of their gross profit and about 25% of their net profit. These estimates regarding revenue associated with the contact lens portion of the practice are the lowest that we have ever recorded, and they are consistent with those for 2013. Despite this, 61% of respondents are expecting an increase in their overall contact lens practice in 2015, while 35% believe that it will stay the same, and 4% believe that it will decrease further (which is a similar distribution to that in 2013).
Contact Lens Materials and Modalities The majority of contact lens fits and refits in 2014 were with silicone hydrogel materials (Figure 1) (Contact Lens Spectrum market data), which is consistent with what we’ve reported in recent years. We noted the first slowing in growth of the silicone hydrogel category in 2011, and in 2012 it decreased slightly (−3%). Our most recent data indicate that the silicone hydrogel category increased slightly from 2013 to 2014; it now stands at 68% of materials used, with hydrogels used in 24% of fits and refits. GfK Retail and Technology data in this regard are consistent with our findings for the U.S. market, with a breakdown of 67% of soft lenses in silicone hydrogel and 33% in hydrogel. However, ABB Optical Group’s year-to-date data paints a slightly different picture, in which silicone hydrogels make up 55% of the market (59% in 2013), and hydrogels represent about 44% of the market (40% in 2013).
Figure 1. Distribution of material classes used in fittings and refittings.
Repeating a downward trend, our market analysis data indicated that GP contact lenses were used in 6% of fits and refits. This is down from 9% in 2012 and 8% in 2013. GPs represent only 1% of the market according to the ABB Optical Group data; this number is consistent with the company’s data on GP materials from 2013.
Respondents to our Reader Profile survey indicated that they perform most (51%) fits and refits with soft spherical lenses, with 62% in full-time daily wear. Following this is soft toric lenses (24%), soft multifocal lenses (14%), spherical GPs (4%), multifocal GPs (2%), and toric corneal GPs (2%) (Figure 2). While our data showed little change in specialty lens prescribing trends, there have been slight shifts regarding which specialty lens options practitioners believe have the greatest growth potential in 2015: custom soft lenses (45%, compared to 47% last year), scleral lenses (23%, compared to 20% last year), hybrid lenses (22%, compared to 26% last year), and orthokeratology lenses (10%, compared to 7% last year).
Figure 2. Distribution of lens modalities used in fittings and refittings.
Data obtained from GfK Retail and Technology and the ABB Optical Group demonstrated a similar trend for 2014 when comparing what are considered the four major soft contact lens categories (spherical, toric, multifocal, and cosmetic). As Table 2 shows, the data are remarkably similar in terms of the spherical (62% for GfK, 63% for ABB Optical), toric (25% for GfK, 24% for ABB Optical), multifocal (10% for GfK, 9% for ABB Optical), and cosmetic (3% for both GfK and ABB Optical) categories for 2014; this differed from the Contact Lens Spectrum Reader Profile survey data, with respondents reporting substantially less in the spherical category and more in the multifocal category. Table 2 also shows that there were slight differences when comparing GfK and ABB’s data to their own for 2013 (by volume). Similar to last year, comparing the 2014 GfK data to the company’s data for 2009 reveals a decline in the spherical (−1.2%) and cosmetic categories (−2.5%), but growth in torics (1.7%) and multifocals (2.0%). When we asked respondents to our Reader Profile survey which of these soft lens categories they anticipated fitting more of in 2015, 35% chose multifocals, followed by cosmetic (5%) and torics (3%).
|Soft Lens Category||Contact Lens Spectrum||ABB Optical Group||GfK Retail and Technology||Change from 2013|
When we asked Contact Lens Spectrum readers about lens replacement schedules, respondents indicated that they mostly prescribe monthly replacement (45%) (Figure 3). Repeating 2013’s trends, two-week replacement remained stable in 2014 at 30%, and the daily disposable category increased to 23% of fits and refits, which is up from 20% in 2013 and continues what has been a steady upward trend over the last six years.
Figure 3. Distribution of replacement schedules used in fittings and refittings.
In addition to the Contact Lens Spectrum market research, we also obtained replacement schedule data from GfK Retail and Technology and the ABB Optical Group (Table 3). Similarities are evident in the data among the three groups—the monthly category continues to hold the most market share, the weekly/two-week category declined slightly, and the daily disposable category was associated with continued growth. The GfK and ABB data indicate that daily disposables grew 24% to 37% over 2014, with no indication of slowing.
|Soft Lens Category||Contact Lens Spectrum||ABB Optical Group||GfK Retail and Technology||Change from 2013|
Regarding which contact lens design or modality has the greatest growth potential over the next year, daily disposables topped the list for 57% of our readers, followed by soft multifocals (35%), cosmetic lenses (5%), and soft torics (3%). When we further asked about anticipated use over the next year, 68% of respondents expect to prescribe more silicone hydrogel daily disposable lenses (down from 71% in 2013), and 46% will use traditional hydrogel daily disposables at a greater rate over the next year (down from 49% in 2013). Respondents also anticipated greater use of silicone hydrogel multifocal lenses (65%), silicone hydrogel toric lenses (45%), and silicone hydrogel monthly lenses (32%).
When fitting presbyopes with contact lenses, there is a continuing trend for most practitioners to prefer multifocal lenses (70% in 2014, compared to 72% in 2013) over monovision (22% in 2014, compared to 20% in 2013) and over-spectacles (8% for 2014 and 2013); interestingly, this hasn’t changed substantially from our Annual Report for 2009, which indicated that 68% of practitioners preferred multifocals. As far as what type of presbyopic lenses are actually fitted, our respondents prescribed a multifocal to 46% of contact lens-wearing presbyopes, compared to prescribing monovision to 36% of contact lens-wearing presbyopes. The most popular modalities prescribed were soft multifocals (40% of presbyopic lens wearers) and soft monovision (29%), which is consistent with the data for 2013.
Myopia control with contact lenses is certainly a growing practice in the contact lens community. In 2014, 24% of Contact Lens Spectrum Reader Profile respondents indicated that they actively practice myopia control with contact lenses. Of those who are, most do so with a soft multifocal contact lens (49%), followed by orthokeratology (46%), and GP multifocals (5%).
We also asked our respondents whether they felt that their utilization would be increasing, staying the same, or decreasing for a number of specific categories. Among these, respondents predict increased use for silicone hydrogel daily disposables and silicone hydrogel multifocals. Practitioners generally indicated that utilization of daily wear one- to two-week and monthly replacement hydrogels and silicone hydrogels, all other toric and multifocal options, extended and continuous wear, cosmetic/colored lenses, orthokeratology, GPs, hybrids, and sclerals would stay the same in their practices in 2015 as opposed to increasing or decreasing.
However, it deserves special mention that although the majority of respondents did not anticipate greater use of lenses in the cosmetic category, 43% of respondents did indicate greater anticipated usage of this category in 2015, compared to only 13% who anticipated greater use in 2014 when responding in 2013. This large percent increase change over 2014’s anticipated usage, in addition to new technologies in this area, contributed to our decision to make this category’s potential our 2014 Contact Lens Spectrum Event of the Year as discussed in the Editor’s Perspective on p. 11.
Contact Lens Wear and Care Compliance
There has been a relative trend since 2009 regarding how practitioners perceive lens replacement compliance. Our respondents continue to report that less than half (44%) of their two-week lens wearers replace their lenses every two weeks, whereas they believe that 66% are compliant with monthly replacement and 79% are compliant with daily replacement (Figure 4). Practitioners generally believe that among all contact lens patients in their practice, about 70% properly comply with their replacement instructions.
Figure 4. Practitioner-perceived patient compliance associated with lenses of various replacement schedules.
Lens Care Trends
Our survey has demonstrated a similar trend with regard to contact lens care over the last several years. The vast majority of respondents (74% in 2014 compared to 76% in 2013) use chemical care systems with contact lens patients, followed by hydrogen peroxide-based systems (25% in 2014 compared to 24% in 2013) (Figure 5). Our respondents also indicate that 86% recommend specific brands of contact lens care systems to their contact lens patients, whereas 14% do not—a trend that has been continuing downward over the past few years. Most respondents selected a lens care system based on disinfectant efficacy (26%—a substantial gain compared with 2013), followed by lens material/solution compatibility (25%), improved comfort (24%), cleaning efficacy (13%), convenience (9%), and cost (2%).
Figure 5. Lens care systems prescribed to patients from 2009 to 2013.
Yesterday, Today, and Tomorrow
We usually take the opportunity in our Annual Report to look back and revisit what was happening in the contact lens field 10 years ago. Back in January 2005, when then-Editor Dr. Joe Barr discussed what happened in contact lenses in 2004, he chose the Fairness to Contact Lens Consumers Act (FCLCA) as the 2004 Event of the Year—but not for the reasons you might suspect. The FCLCA was of great concern because many believed that a great number of patients would start purchasing their contact lenses from alternative sources, affecting the profitability of contact lenses for practitioners. But as Dr. Barr indicated in his January 2005 Editor’s Perspective, “The Federal Fairness to Contact Lens Consumers Act (FCLCA) got a lot of attention, but it’s really had little short-term impact on our day-to-day practices. Oh sure, it still causes many of us much angst. But it’s probably also made us better business people and perhaps it’s even made us further emphasize the importance of service and further resist significant markups on the contact lens materials we rightfully sell. It’s probably also made us better healthcare providers.”
Also in 2004, a few second-generation silicone hydrogels had entered the market, about which Dr. Barr made the correct prediction that silicone hydrogels would quickly become the lens material of choice. Further highlighting that year, Ciba Vision and Bausch + Lomb (B+L) reached a settlement that allowed B+L’s PureVision lens to return to the contact lens market in 2005; CooperVision acquired Ocular Sciences, Inc. (OSI) not long after OSI had launched a lens designed to correct spherical aberration; Vistakon (Johnson & Johnson Vision Care, Inc) opened The Vision Care Institute; and B+L received U.S. Food and Drug Administration (FDA) approval of its Vision Shaping Treatment.
And now back to 2014. We indicated at the beginning of the article that many had commented about 2014 being a “sleepy” year for contact lenses; while it may seem that way on the surface, things have moved into place this year that may shake up the industry moving forward.
CooperVision acquired Sauflon Pharmaceuticals, giving the company the largest portfolio of daily disposable lenses—including silicone hydrogels in spherical, toric, and multifocal designs—in a market in which daily disposables have been the fastest growing segment over the last few years. It will be interesting to see how this impacts market share among the four largest contact lens manufacturers going forward.
Prescribing contact lenses for myopia control is a growing trend in the industry. Nearly one-quarter of our survey respondents are actively practicing myopia control with their young patients, and it’s currently off-label. Once the FDA begins approving products for this indication—and news of the approval is covered by the media and reaches more parents—this modality has the potential to really take off and eventually change the standard of care for correcting the vision of young patients who have myopia.
The implementation of Unilateral Price Policies (UPPs) covering both new and existing products by some lens manufacturers received much attention. As discussed in the September 2014 feature article “Impact of Unilateral Price Policies” by S. Barry Eiden, OD, FAAO, and Jordan Kassalow, OD, the UPPs are designed to encourage inter-brand competition among lens manufacturers to stimulate the development of the best new products for consumers; manufacturers hope that it will encourage practitioners to gain a deeper understanding of the technology associated with the products and refocus the practitioner/patient discussion on product performance rather than on cost. As mentioned previously, this new pricing strategy did have what appears to be a short-term negative impact on U.S. market growth in the third quarter. While this is not likely to continue, it will be interesting to see how the UPPs affect contact lens prescribing practices, innovation, and market growth in the future.
Interest in specialty lenses is also continuing to rise. While our survey data showed that this category remained relatively stable during 2014, we are seeing an increase in the pre-registration numbers for the 2015 Global Specialty Lens Symposium (GSLS), which is taking place later this month in Las Vegas. Based on our numbers at press time, we expect this year’s meeting to have the highest attendance of the meeting’s history, illustrating that more practitioners are becoming interested in incorporating specialty lenses into their practices or improving their skills with fitting these lenses.
The Tear Film and Ocular Surface Society (TFOS) set in motion a sequel to its original Dry Eye WorkShop (DEWS). DEWS II will update the definition, classification, and diagnosis of dry eye disease; critically assess the etiology, mechanism, distribution, and global impact of this disorder; and address its management and therapy. The results of this endeavor will bring us to a better understanding of dry eye disease and how to manage its symptoms in our patients, which will have a positive impact on contact lens comfort and may help reduce the dropout rate.
Finally, as we mentioned previously, new developments in cosmetic lenses have created the potential for tremendous growth in this category. Consumer marketing associated with the new products positions them not as vision correction devices, but as fashion accessories and a means to bring out natural beauty. This opens up the modality to many more consumers, not just those who need vision correction. If wearing these lenses develops into a fashion trend, the number of consumers seeking them from their eyecare practitioners could skyrocket.
In summary, 2014 was a good year in the contact lens field, with healthy growth overall. Developments that occurred during the course of the year have set the stage for exciting times and greater growth potential in the years to come. We look forward to reporting how these trends and developments shape the market over the coming year. CLS
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.