FTC needs to help promote competition in the contact lens marketplace

Today, almost 41 million Americans wear contact lenses, spending an estimated four billion dollars every year to do so.  Yet, despite Congressional and Federal Trade Commission (FTC) action more than a decade ago, competition for the sale of contact lenses remains impaired by the persistent efforts of eye care providers, particularly optometrists, to cling to the profits they earn from selling lenses to their captive patients. The FTC now has another opportunity to empower consumers to choose where to purchase their contact lenses, and the Commission ought to embrace it.

Unlike with prescriptions for most other medical devices, which are written by a physician but filled by another party, contact lenses are frequently sold by the same eye care providers who write prescriptions for their use. Fearful of losing contact lens sales to the alternative retailers that emerged and disrupted the status quo in the late 1990s, many eye care providers responded with a strategy of anticompetitive practices to keep rivals out of the marketplace. They refused to release prescriptions to consumers, publicized false, exaggerated, and misleading health and safety information, and refused to deal with contact lens manufacturers who sold to their retail competitors. 

{mosads}Congress saw that behavior and understood that as long as eye care providers sold the products they prescribed, the unaided market alone could not deliver the kind of competition consumers deserve. So in 2003, it took steps to promote competition by passing the Fairness to Contact Lens Consumers Act (FCLCA), a law intended to make sure that contact lens consumers can purchase lenses from the seller of their choice, and not just from their eye care provider. The FCLCA requires eye care providers to automatically release contact lens prescriptions to patients without the patient having to ask. At the direction of Congress, the FTC then wrote and adopted the “Contact Lens Rule,” setting the guidelines that enforce the pro-consumer goals of the FCLCA.

Sadly, due to the continued recalcitrance of incumbent eye care providers, the law is not working as Congress intended. As the FTC has documented, today less than half of consumers automatically receive a copy of their contact lens prescription following an eye exam and many remain unaware that they have the right to their prescription.

Last year, as part of its periodic, mandatory review of the Contact Lens Rule, the FTC recognized that the original rule had yet to realize Congress’s goal of facilitating a more robust competitive marketplace for contact lenses. After further study, it proposed steps to improve compliance by requiring prescribers to secure an acknowledgement from their patients that they had received their prescription. As a further inducement to compliance, prescribers also would be required to maintain a record of that acknowledgement for three years. This simple new step, which could be handled in a digital format, would finally create the kind of accountability needed to bolster prescription portability and enable competition in the marketplace.

Eye care providers who stand to lose from competition once again have been banding together to oppose this minimal, commonsense requirement by making exaggerated claims of regulatory burden. At the same time, and revealing their true agenda, they continue to push for protectionist limits on competition, based on many of the same, inaccurate and at times false claims about health risks related to purchasing contact lenses from non-prescribing lens sellers, claims that the FTC has once again just recently rejected.

Fearing they may not be able to persuade the independent FTC, eye care providers have also turned up on the door steps of Congress, hoping to dodge accountability and convince federal legislators to adopt protectionist measures that undercut the legislative goals they endorsed when they passed the FCLCA.

As it has repeatedly urged federal, state, and local legislators and regulators to do, the FTC should continue to embrace competition and reject protectionism by moving to finalize its proposed updates to the Contact Lens Rule. The dynamics playing out here are not unique to the contact lens sector. Incumbent providers threatened by competition from new technologies or business models often seek government protection from the rigors of competition. 

The FTC is well aware of this dynamic. It has consistently opposed restrictions on competition that lack a genuine health and safety justification in industries as varied as occupational licensing, tele-health, and taxi services. It should follow its own proscription now and prescribe competition for the contact lens marketplace. 

Andrew I. Gavil is a Professor of Law at Howard University School of Law, Senior Of Counsel at Crowell & Moring LLP, and a former Director of the Office of Policy Planning at the Federal Trade Commission (2012-2014). He currently advises 1-800 CONTACTS on competition and regulatory policy matters.

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