CONTACT LENS SALES: IS MARKET 

REGULATION THE PRESCRIPTION? 

HEARING 

BEFORE THE 

SUBCOMMITTEE ON COMMERCE, TRADE, 

AND CONSUMER PROTECTION 

OF THE 

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED NINTH CONGRESS 

SECOND SESSION 

SEPTEMBER 15, 2006 

Serial No. 109-139 

Printed for the use of the Committee on Energy and Commerce 

Available via the World Wide Web: http://www.access.gpo.gov/congress/house 

U.S. GOVERNMENT PRINTING OFFICE 

WASHINGTON : 2006 

For sale by the Superintendent of Documents, U.S. Government Printing Office 

Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800 

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31-465PDF 
COMMITTEE ON ENERGY AND COMMERCE 

JOE BARTON, Texas, Chairman 

RALPH M. HALL, Texas 

MICHAEL BILIRAKIS, Florida 

 Vice Chairman 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

PAUL E. GILLMOR, Ohio 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

CHARLIE NORWOOD, Georgia 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

JOHN B. SHADEGG, Arizona 

CHARLES W. “CHIP” PICKERING, Mississippi 

 Vice Chairman

VITO FOSSELLA, New York 

ROY BLUNT, Missouri

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

CHARLES F. BASS, New Hampshire 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 

MIKE ROGERS, Michigan 

C.L. “BUTCH” OTTER, Idaho 

SUE MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

JOHN D. DINGELL, Michigan 

 Ranking Member 

HENRY A. WAXMAN, California 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

SHERROD BROWN, Ohio 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

ALBERT R. WYNN, Maryland 

GENE GREEN, Texas 

TED STRICKLAND, Ohio 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MIKE DOYLE, Pennsylvania 

TOM ALLEN, Maine 

JIM DAVIS, Florida 

JAN SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

BUD ALBRIGHT, Staff Director 

DAVID CAVICKE, General Counsel

REID P. F. STUNTZ, Minority Staff Director and Chief Counsel

SUBCOMMITTEE ON COMMERCE, TRADE, AND CONSUMER PROTECTION 

CLIFF STEARNS, Florida, Chairman 

FRED UPTON, Michigan 

NATHAN DEAL, Georgia 

BARBARA CUBIN, Wyoming 

GEORGE RADANOVICH, California 

CHARLES F. BASS, New Hampshire 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO, California 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 

MIKE ROGERS, Michigan 

C.L. “BUTCH” OTTER, Idaho 

SUE MYRICK, North Carolina 

TIM MURPHY, Pennsylvania 

MARSHA BLACKBURN, Tennessee 

JOE BARTON, Texas 

 (EX OFFICIO)

JAN SCHAKOWSKY, Illinois 

 Ranking Member 

MIKE ROSS, Arkansas 

EDWARD J. MARKEY, Massachusetts 

EDOLPHUS TOWNS, New York 

SHERROD BROWN, Ohio 

BOBBY L. RUSH, Illinois 

GENE GREEN, Texas 

TED STRICKLAND, Ohio 

DIANA DEGETTE, Colorado 

JIM DAVIS, Florida 

CHARLES A. GONZALEZ, Texas 

TAMMY BALDWIN, Wisconsin 

JOHN D. DINGELL, Michigan 

 (EX OFFICIO) 

(II)
CONTENTS 

Page 

Testimony of: 

Ohlhausen, Maureen, Director, Office of Policy Planning, Federal Trade Commission.. 13 

Klein, Wayne, Assistant Attorney General, Office of the Attorney General, State of 

Utah ................................................................................................................................ 28 

Coon, Jonathan C., Chairman and Chief Executive Officer, 1-800 Contacts, Inc............. 47 

Fryling, Gregory A., Chief Operating Officer, CooperVision, Inc. ................................... 54 

Schein, Dr. Oliver D., M.D., M.P.H., Burton E. Grossman Professor of 

Ophthalmology, Johns Hopkins University, on behalf of the American Academy of 

Ophthalmology............................................................................................................... 62 

Curtis, Dr. Wiley, O.D., Member, American Optometric Association .............................. 68 

Additional material submitted for the record: 

CIBA Vision, prepared statement of.................................................................................. 88 

(III) 

(1) 

CONTACT LENS SALES: IS MARKET 

REGULATION THE PRESCRIPTION? 

FRIDAY, SEPTEMBER 15, 2006 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON ENERGY AND COMMERCE, 

SUBCOMMITTEE ON COMMERCE, TRADE,

AND CONSUMER PROTECTION, 

Washington, DC. 

The subcommittee met, pursuant to call, at 9:30 a.m., in Room 2123 

of the Rayburn House Office Building, Hon Cliff Stearns [Chairman] 

presiding. 

Representatives Present: Stearns, Terry, Schakowsky, and Gonzalez. 

Staff Present: David Cavicke, General Counsel; Chris Leahy, Policy 

Coordinator; Shannon Weinberg, Counsel; Will Carty, Profession Staff 

Member; Brian McCullough, Professional Staff Member; Billy Harvard, 

Legislative Clerk; Jonathan Cordone, Minority Counsel; and Jonathan 

Brater, Minority Staff Assistant. 

MR. STEARNS. Good morning, everybody. The subcommittee will 

come to order. 

I am pleased that this subcommittee has found time to revisit the 

issue of contact lens regulation, an issue we addressed in the 108th

Congress which resulted in the creation of a public law. Unfortunately, 

according to some companies in the contact lens market, including 1-800 

Contacts, there remains a problem with regard to how contact lenses are 

distributed to retailers, from prescribers to wholesale clubs and mail 

order or Internet retailers, the so-called alternative channels of 

distribution. 

This committee has a long and distinguished history of addressing 

market failure problems, but only as a last resort, preferring the invisible 

hand of the free market to work out inequities over government 

intervention. At the outset, I hope that this will be the case, but I am 

pleased to have an opportunity to take a closer look at this issue, 

understand it better, including the status of a 1996 consent decree, and on 

the alleged evidence of market failure. Therefore, I welcome this 

opportunity to hear the testimony before us this morning. 

My colleagues, with over 36 million Americans wearing some form 

of contact lens, this is not a small issue. There are essentially two types 

of mass marketed lenses for consumer purchase, those distributed 

exclusively to eye care professionals by a contact lens manufacturer and 
2

those distributed freely to all retailers, including eye care professionals 

and aftercare providers like 1-800 Contacts. The concerns precipitating 

this hearing arose because of those manufacturers; namely 

CooperVision, that sell their lenses exclusively to eye care professionals. 

Aftercare providers feel that such arrangements limit competition and 

ultimately harm consumers. 

So it is important to note that the Federal Trade Commission 

conducted a study in 2005, as required by legislation passed by this 

committee, and concluded there was no market failure in the industry. 

The Federal Trade Commission found exclusive manufacturer-retail 

relationships pose no threat to competition nor did any harm to 

consumers. So I look forward to the FTC elaborating on their findings 

today, and commenting on the case before us. 

I am not resigned to a conclusion at this point. My primary concern 

in holding this hearing is to walk out of this room with a better and clear 

understanding of the actual problem and how the legislation introduced 

and referred to this committee will solve it. 

I also want to be certain that by solving an alleged commercial 

problem, we are not in turn creating a health-related problem. 

Prescription verification is a very important component of 

doctor-patient-seller interaction in this area, and I want to understand 

better how aftercare providers like 1-800 Contacts handle that function. 

So I thank all the witnesses for being here. 

The House went out of session yesterday, so perhaps not all the 

members will be here this morning, but I to want thank the Ranking 

Member, Jan Schakowsky, for participating and being here--and others 

that do show--so we can have that hearing this morning. And with that, I 

recognize the Ranking Member. 

[The Prepared Statement of Hon. Cliff Stearns follows:] 

PREPARED STATEMENT OF THE HON. CLIFF STEARNS, CHAIRMAN, SUBCOMMITTEE ON 

COMMERCE, TRADE, AND CONSUMER PROTECTION

Good morning. I’m pleased that this Committee is finding time to revisit the issue 

of contact lens regulation – an issue we addressed in the 108th Congress, which resulted 

in the creation of a public law. Unfortunately, according to some companies in the 

contact lens market, namely 1-800-Contacts, there remains a problem with regard to how 

contact lenses are distributed to retailers – from prescribers to wholesale clubs and mail 

order or internet retailers (the so-called “alternate channels of distribution”). 

This Committee has a long and distinguished history of addressing market failure 

problems, but only as a last resort – preferring the invisible hand of the free market to 

work out inequities over government intervention. At the outset, I hope that will be the 

case here but I’m pleased to have an opportunity to take a closer look at the issue, 

including the status of the 1996 consent decree, and on the alleged evidence of market 

failure. Therefore, I welcome the opportunity to hear the testimony before us this 

morning. 
3

With over 36 million Americans wearing some form of contact lens, this is no small 

issue. There are essentially two types of mass-marketed lenses for consumer purchase - 

those distributed exclusively to eye care professionals by a contact lens manufacturer and 

those distributed freely to all retailers, including eye care professionals and “aftercare 

providers” like 1-800-Contacts. The concerns precipitating this hearing arose because of 

those few manufacturers, namely CooperVision, that sell their lens exclusively to eye 

care professionals. Aftercare providers feel that such arrangements limit competition and 

harm consumers. 

It is important to note that the Federal Trade Commission conducted a study in 

2005, as required by legislation passed by this Committee, and concluded there was no 

market failure in the industry. The FTC found exclusive manufacturer-retailer 

relationships pose no threat to competition nor harm consumers. I look forward to the 

FTC elaborating on those findings today and commenting on the specific case before us. 

Because I am not resigned to a conclusion at this point, my primary goal in holding 

this hearing is to walk out of this room with a clear understanding of the actual problem 

and how the legislation introduced and referred to this Subcommittee will solve it. I also 

want to be certain that by solving an alleged commercial problem, we are not, in turn, 

creating a health-related problem. Prescription verification is a very important 

component of doctor-patient-seller interaction in this area, and I want to understand better 

how aftercare providers like 1-800-Contacts handle that function. 

Again, I thank everyone for joining us this morning and I look forward to the 

testimony of this distinguished panel. 

Thank you. 

MS. SCHAKOWSKY. Thank you, Chairman Stearns, for holding 

today’s hearing to examine the status of contact lens sales, now that the 

Fairness to Contact Lens Consumers Act has been law for nearly 3 years. 

As you mention, that bill went through our subcommittee; I am 

proud to have been a co-sponsor of it. It is a pro-consumer law that 

guarantees the 36 million contact users in this country--guarantees that 

they are provided with a copy of their prescription from their doctor so 

they will have the freedom to shop for the best deal possible if they 

choose when filling their contact lens needs. 

Despite the success for consumers this law represents, reports have 

been surfacing from eye care practitioners, manufacturers, and contact 

lens sellers that there are still problems in the prescription lens business. 

Eye care practitioners are concerned that sellers are abusing the 

verification system by making it difficult for eye doctors to authenticate 

prescriptions, and also by filling prescriptions without ensuring their 

validity. Manufacturers are concerned about legislation that would force 

them to offer their product to any distributor that wants them, regardless 

of their reliability. No other manufacturer field has such a restriction. 

And online distributors claim that because we did not include language 

in the Fairness to Contact Lens Consumers Act to require that all lenses 

are made available to them, eye doctors and manufacturers are trying to 

keep them out of the loop, they say. 

Since the passage of the legislation, the Federal Trade Commission 

has had to issue warning letters in a number of instances. In the early 
4

days of this law, some were issued to eye care practitioners for not 

providing prescriptions to consumers. In 2004, online sellers were issued 

warnings for not having open fax lines for eye care practitioners to verify 

prescriptions or for falsely claiming that cosmetic or color lenses are 

nonprescription. The FTC has also had to take law enforcement action 

against sellers who were found to be not verifying prescriptions. 

These problems, whether they represent widespread problems or are 

attributable to a few bad actors, are quite serious. It is consumers’ 

health, safety and choice that are jeopardized by those violations, and it 

is never acceptable to compromise consumers in the desire to make a 

buck by a multibillion dollar industry. 

As legislators, we have a duty to make sure that consumers’ interests 

are being met, that they have access to safe and affordable contact lenses, 

and that those principles guide us in whatever we decide to do. And as 

key players in the eye care industry, it is the practitioners, manufacturers, 

and sellers’ duty to also be guided by those principles and not try to push 

the law to its limit. 

We have run into some bumps in the road, but I believe that since the 

FTC has been able to take action under the Fairness to Contact Lens 

Consumers Act, we can’t claim that the law is not working or that we 

need new legislation at this point. Consumers are getting their 

prescriptions and are able to shop around for their lenses. 

I am glad that we are holding today’s hearing to investigate these 

complaints to determine what needs to be done to ensure that we protect 

consumers’ health and safety, and I thank the witnesses here for shedding 

light on this important issue. Thanks. 

MR. STEARNS. I thank the gentlelady. 

Mr. Terry. 

MR. TERRY. Thank you, Mr. Chairman, for holding this hearing and 

our witnesses for appearing here today. 

My concern, it was brought to my attention and the basis for 

introducing what is H.R. 5762, the Contact Lens Consumer Protection 

Act, appears to me to be an anti-competitive, anti-consumer practice that 

has emerged as a loophole to what some of us fondly refer to as the Burr 

bill, a contact lens bill of about 3 years ago, of which there was a great 

deal of discussion and--I won’t say angst, but handwringing and 

compromise that went into this bill to reach a delicate balance. Then 

there appears to be a system of marketing that gets around what at least 

the intention of that bill was, and that is to provide consumers the ability 

to take a prescription and go then to a place where they want to go, 

whether it is like the Wall Street Journal article that says that this lady 

wanted to go to Wal-Mart to fill her contact lens or go online. And I 

think we should give consumers that freedom. That was the intention of 
5

that bill 3 years ago, as well as to ensure the patient’s eye safety and 

health. 

So I want to look and explore this tying marketing agreement that 

appears where a physician can prescribe a contact lens that only that 

physician sells. So I want to explore that, see if there is health reasons 

for something like that or whether it is what it appears on the surface, to 

just simply be a marketing ploy to get around the current law. 

With that, Mr. Chairman, I will put my full statement into the record, 

and if I could also attach a copy of the Wall Street Journal. 

MR. STEARNS. By unanimous consent, so ordered. 

MR. TERRY. Then I yield back. 

[The Prepared Statement of Hon. Lee Terry follows:] 

PREPARED STATEMENT OF THE HON. LEE TERRY, A REPRESENTATIVE IN CONGRESS FROM 

THE STATE OF NEBRASKA

Mr. Chairman, thank you for holding today’s hearing. 

 Recently, I introduced H.R. 5762, the Contact Lens Consumer Protection Act, 

because I believe legislation is needed to fix a loophole that prevents millions of 

consumers from having more choices when purchasing contact lenses prescribed by their 

eye doctor. 

 In 2003, Congress passed the Fairness to Contact Lens Consumers Act which many 

of my colleagues on this committee helped write and supported. Under that law, eye 

doctors are required to hand patients a copy of their prescription after the exam so that the 

patient can shop around for the most affordable contact lenses. What patients have found 

is that the brand they were prescribed was only available at the eye doctor’s office at a 

cost much higher than at an alternative distributor. Why is this happening? Because the 

major contact lens makers were entering into exclusive arrangements with eye doctors 

requiring patients to buy their lenses from the doctor, and discouraging purchases from 

alternative contact lens distributors. 

 By allowing eye doctors to prescribe doctor-only, or limited-distribution lenses, a 

loophole has been created forcing millions of consumers to buy their lenses only through 

eye-care professionals. A recent report issued by the Federal Trade Commission showed 

that an average user of contact lenses can save up to 20% by buying from alternative 

distributors of contact lenses. 

 The practice of limiting consumers to the purchase of doctor-only contact lenses has 

been found to be harmful to consumers by 39 state attorney generals. According to the 

state attorney generals, the practice of doctor-only prescribed contact lenses “threatens to 

thwart the purposes” of the Contact Lens Consumers Act and “puts the eye-care 

providers’ profit motive ahead of patient welfare.” Those are their words, not mine. 

 Congress, as well as the medical community, recognizes that a conflict of interest 

can be created when doctors sell what they prescribe to consumers. That is why when 

my doctor writes me a drug prescription, I can go to Walgreens, CVS, or a locally owned 

pharmacy to purchase my prescription. What I want the subcommittee to explore this 

morning is why should eye doctors not be held to the same business practices? 

 My legislation makes two simple changes in the current law. First, it would require 

a manufacturer to make any contact lens it produces, markets, distributes or sells 

available in a commercially reasonable and non-discriminatory manner to prescribers or 

other specified alternative channels of distribution. Second, it exempts prescriptions for 
6

lenses that are not mass marketed or produced that are custom designed to meet the 

different optometric needs of individuals. 

 Mr. Chairman, I again thank you for holding this hearing and look forward to 

hearing from our panel of witnesses. 

[The information follows:] 
7

MR. STEARNS. And I thank the gentleman. And I also, by 

unanimous consent, put Mr. Ed Whitfield’s statement in the record, and 

anyone else who seeks. 
8

[The information follows:] 

PREPARED STATEMENT OF THE HON. JOE BARTON, CHAIRMAN, COMMITTEE ON ENERGY 

AND COMMERCE

Thank you, Chairman Stearns for holding this hearing. We have received much 

interest in this topic and particularly on the various legislative proposals addressing the 

contact lens market before both chambers. I hope that today’s hearing will give us a 

chance to look at market regulation and how it affects consumers, and at whether now is 

the time for Congressional action. 

Regulation of consumer markets is an area in which the Federal government 

traditionally treads lightly—and with good reason. However, when conditions command 

action—when consumers are being harmed by the actions of a particular market 

participant—Congress has acted. 

The Federal Trade Commission reports 36 million Americans wear contact lenses. 

Assuring fair access to lenses and ensuring healthy competition among lens 

manufacturers and retailers are important goals. But the matter is not as cut and dried as 

it seems. There are numerous competing interests here. Manufacturers assert a right to 

decide with whom they want to do business, and doctors want to protect their businesses. 

Consumers certainly have a right to choose their optical care providers and to benefit 

from competition in the contact lens marketplace. Overlaying the issue we have patient 

health concerns, too. This hearing will examine these arguments. I hope it will help us to 

determine whether the contact lens business is free and competitive, or whether some 

intervention is required. 

More competition and less government is the ideal, and I believe in it, but 

occasionally it takes a nudge from people like us to remind competitors that it’s their job 

to compete. 

I look forward to the expert testimony our distinguished panel of leaders will 

provide today. Thank you all for your time today and welcome. 

Thank you, Mr. Chairman, and I yield back. 

PREPARED STATEMENT OF THE HON. ED. WHITFIELD, A REPRESENTATIVE IN CONGRESS 

FROM THE STATE OF KENTUCKY

Mr. Chairman, thank you for agreeing to hold this timely hearing on an issue 

affecting many of my constituents. 

In 2003, the Fairness to Contact Lens Consumers Act (FCLCA) was signed into law, 

allowing consumers greater access to their prescription records so they can more easily 

purchase contact lenses from third-party vendors. Under the law, a third-party vendor 

must confirm the validity of a prescription with the prescribing doctor before dispensing 

contact lenses to a patient, and a prescribing doctor has up to eight hours to respond to the 

inquiry. If the doctor does not respond within the allotted time, the vendor may assume 

the prescription is valid and proceed with the sale. 

In practice, the prescription verification requirements of the FCLCA have been 

routinely ignored and abused by some third-party vendors. Doctors report numerous 

instances of third-party vendors using automated phone systems that often provide 

inadequate information for verifying patient prescriptions. Attempts to communicate 

with these phone systems are frequently met with busy signals, unattended voice 

mailboxes, and disconnected calls. 

Other vendors make no attempt to verify prescriptions at all. In one major instance, 

a doctor in Texas found that 17 consecutive contact lens sales by a third-party vendor 

took place for his patients without any verification of his patients’ prescriptions 

whatsoever. The Federal Trade Commission recognizes these problems, and earlier this 
9

year issued warnings to several third-party vendors advising that their practices are illegal 

and deceptive to consumers. 

Contact lenses are regulated medical devices requiring a valid prescription from a 

licensed doctor. Third-party vendors that overfill prescriptions or who do not verify that 

the prescriptions they are filling endanger the health and welfare of the customers they 

purport to serve. Completing contact lens sales regardless of a patient’s medical history 

is an unacceptable business practice and clearly contrary to the best interest of 

consumers’ health and well-being. 

Verifying patient prescriptions requires a good-faith effort on the part of both 

doctors and third-party vendors. There needs to be better communication between these 

parties, ensuring that patients receive products that are safe and compatible with their 

documented medical history. 

I am currently working on legislation that will create a “Patient Safety Hotline” for 

optometrists with patient health concerns related to a prescription verification request. A 

call to the hotline would suspend the transaction until the vendor addressed the specified 

health concern. 

In addition, the bill would allow optometrists to specify to third-party vendors their 

preference for fax, e-mail or telephone prescription verification purposes. Vendors 

would then be required to attempt at least two of the three communication choices. 

Thank you again for holding this hearing and for your consideration of my remarks. 

MR. STEARNS. Yes, sir. 

MR. GONZALEZ. Thank you very much, Mr. Chairman, and good 

morning to one and all. And I know you are saying attendance is not 

great, but let me explain when we set these hearings, we had folks 

scheduled for today. Seventy five percent of the Members of the House 

of Representative do not have their families in Washington, so along 

with the wonderful old adage of Harry Truman that if you want a friend 

in Washington, get a dog, if you want a family life, go back to the 

district. And that is what happens as soon as they tell us we are not 

going to have votes. So in the way of explanation. But please 

understand that your testimony is important. Obviously we have 

someone that is taking it down, and we can always refer to it, and we ask 

for a copy of the record; but your written statements are actually 

reviewed by staff and Members of Congress for future use. So don’t 

think for a second that your presence here today is not important because 

it is. Some of the Members that are here present this morning will have 

to leave to catch flights and such. I hope I can say for the duration until I 

have another commitment. 

The way I look at this particular issue is really quite simple. I hate 

for everything to always be one side versus another. Some think it is 

consumer choice versus health safety concerns. I would like to think that 

it is going to be consumer choice with health safety concerns. And I 

understand that we have different advocates here today and that is what 

you should be doing, but our job really is to kind of sift through it all and 

see if we can come up with something that really addresses legitimate 
10

concerns that are out there. And for that, I thank you for your testimony 

today and I yield back. 

MR. STEARNS. I thank my colleague. 

With that, we will go to our witnesses. And we have Ms. Maureen 

Ohlhausen, Director of the Office of Policy Planning at the Federal Trade 

Commission, and we have Mr. Wayne Klein, Assistant Attorney 

General, Office of the Attorney General, State of Utah. And we have 

Mr. Jonathan Coon, CEO of 1-800 Contacts. We have Mr. Gregory 

Fryling, who is Chief Operating Officer of CooperVision, and Dr. Oliver 

Schein, Burton E. Grossman Professor of Ophthalmology at John 

Hopkins. And we have Dr. Wiley Curtis, a member of the American 

Optometric Association. 

I thank all of you. And Ms. Ohlhausen, we appreciate your opening 

statement. 

STATEMENTS OF MAUREEN OHLHAUSEN, DIRECTOR, 

OFFICE OF POLICY PLANNING, FEDERAL TRADE 

COMMISSION; WAYNE KLEIN, ASSISTANT ATTORNEY 

GENERAL, OFFICE OF THE ATTORNEY GENERAL, 

STATE OF UTAH; JONATHAN C. COON, CHAIRMAN AND 

CHIEF EXECUTIVE OFFICER, 1-800 CONTACTS, INC.; 

GREGORY A. FRYLING, CHIEF OPERATING OFFICER, 

COOPERVISION, INC.; DR. OLIVER D. SCHEIN, M.D., 

M.P.H., PROFESSOR OF OPHTHALMOLOGY, JOHNS 

HOPKINS UNIVERSITY, ON BEHALF OF THE AMERICAN 

ACADEMY OF OPHTHALMOLOGY; AND DR. WILEY 

CURTIS, O.D., MEMBER, AMERICAN OPTOMETRIC 

ASSOCIATION 

MS. OHLHAUSEN. Good morning. Thank you, Chairman Stearns, 

Ranking Member Schakowsky, and members of the subcommittee. I am 

Maureen Ohlhausen, Director of the Federal Trade Commission’s Office 

of Policy Planning. 

I am pleased to present the Commission’s testimony on consumer 

protection and competition issues concerning the contact lens industry. 

The Commission’s full testimony has been submitted for the hearing 

record, and my statement and any answers I give to your questions today 

reflect my own views and not necessarily those of the Commission. 

Over the years, the Commission has engaged in a wide variety of 

activities concerning the eye care industry. These activities include law 

enforcement, rule making, business and consumer education, and 

advocating public policies relating to the marketing and sale of eye care 

goods and services. 
11

The FTC’s activities are all directed toward the same fundamental 

objective, the promotion of vigorous competition and informed consumer 

choice, thereby increasing consumer welfare. 

In 2003, Congress enacted the Fairness to Contact Lens Consumers 

Act, which we now call FCLCA, to increase competition and computer 

choice in the sale of contact lenses using an approach similar to that of 

the eyeglasses rule which also require prescription release. To 

implement FCLCA, the FTC issued its Contact Lens Rule, which closely 

tracks the Act’s provisions. Since the rule was issued, the Commission 

has undertaken substantial efforts to educate sellers and eye care 

practitioners about its requirements. The FTC staff has also issued 

warning letters to individual companies to alert them that they may be in 

violation of the rule, and request that they modify their practices as 

necessary to come into compliance with the law. 

In appropriate circumstances, the FTC initiates investigations and 

takes law enforcement action against those who violate the rule. For 

example, in August, 2006, the Department of Justice, at the request of the 

FTC, filed a complaint and settlement agreement with operators of three 

Websites that sell contact lenses directly to consumers. We alleged that 

the defendants violated the Contact Lens Rule by selling lenses to 

consumers without first obtaining prescriptions or verifying prescriptions 

with the prescribing eye care practitioners. The consent decree requires 

the defendants to pay $40,000 in civil penalties and, among other things, 

prohibits them from violating the rule in the future. 

When Congress passed FCLCA, it required the FTC to undertake a 

study to examine the strengthen of competition in the sale of prescription 

contact lenses, including, in particular, two contact lens distribution 

policies, private labeling and limited distribution, that some have argued 

allow prescribing eye care practitioners to lock their patients into lenses 

that must be purchased from them at inflated prices. The FTC study, 

released in February 2005, found no evidence that either of these 

practices was harming consumers. 

Regarding private label lenses, data from the FTC study showed 

average prices for private label lenses to be statistically equivalent to 

their national name brand counterparts. As for limited distribution 

lenses, the study found them to be available through many distribution 

channels, making it unlikely that limited distribution policies are 

allowing retailers to raise prices. 

Specifically, the Commission found that the two most popular 

limited distribution lenses were available to consumers at most on and 

offline sellers sampled, including optical chains, discount retailers such 

as Wal-Mart and Target, warehouse clubs, such as BJs and Sam’s, and 

many of these outlets’ Websites. As in the case of private labeling, the 
12

Commission study found no evidence that limited distribution policies 

are likely to harm consumers. 

Because FCLCA requires eye care practitioners to release 

prescriptions to patients and permit sellers to fill private label 

prescriptions with either brand name or other private label equivalent, it 

appears that eye care practitioners face significant competition in the sale 

of these limited distribution lenses. Moreover, warehouse clubs tend to 

offer lowest prices, making it even less likely that an eye care provider 

would be able to raise prices for a limited distribution lens. Thus, 

consumers who receive a prescription specifying a limited distribution 

lens do not appear to be forced to purchase that lens from their 

prescribing eye care provider, and instead have several online and offline 

options. Consistent with this observation, the Commission’s 

examination of the data did not suggest that limited distribution lenses 

were sold at prices any higher than similar lenses that were not subject to 

such a distribution policy. 

It is important to note that limited distribution policies, including 

those that limit online distribution, are common across industries, and 

often are intended to spur competition among rival manufacturers, which 

ultimately can lead to greater quality, enhanced variety, or lower prices. 

It is widely recognized in law and economics that placing limits on 

distribution can allow a manufacturer who relies on retailers to provide 

customer service or quality assurance efforts to compete more effectively 

against rival manufacturers. 

Typically, therefore, a supplier’s unilateral decision to restrict the 

distribution channels in which its product is available raises antitrust 

concerns only if such a restraint is likely to harm competition among 

rival manufacturers and if this harm outweighs any pro-competitive 

benefits. 

As the Supreme Court has stated, “a manufacturer of course 

generally has a right to deal or refuse to deal with whomever it likes as 

long as it does so independently.” At the same time, it is important to 

distinguish unilaterally imposed distribution restraints from those that 

manufacturers adopt at the behest of a group of retailers acting in 

concert. Joint efforts by retailers to coerce manufacturers to 

disadvantage discounters are a per se violation of the antitrust laws 

because such agreements among competitors suspend the normal give 

and take of the marketplace. 

The Commission remains committed to promoting competition and 

consumer protection in the contact lens industry. We are willing to assist 

your subcommittee in any way that we can. Thank you. 

[The prepared statement of Ms. Ohlhausen follows:] 
13

PREPARED STATEMENT OF MAUREEN OHLHAUSEN, DIRECTOR, OFFICE OF POLICY 

PLANNING, FEDERAL TRADE COMMISSION
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MR. STEARNS. I thank the gentlelady. 

Mr. Klein. 

MR. KLEIN. Thank you, Mr. Chairman. 

My name is Wayne Klein, and I represent the Utah Attorney General 

today. He, unfortunately, was delayed in a flight from overseas and 

could not be here, and so I ask that my written statement, along with his 

statement, be included in the record. 

MR. STEARNS. By unanimous consent, so ordered. 
27

MR. KLEIN. Helping consumers maximize the value of their contact 

lens purchases is important both to buyers of the lenses and the creation 

of a competitive market for the sale of replacement lenses. 

I thank this committee for adopting the Fairness to Contact Lens 

Consumers Act in 2003. I am here to say that more needs to be done to 

promote consumer choice and to protect buyers of replacement contact 

lenses. Some competition is the best means of delivering the highest 

number of goods to consumers at the lowest price, while rewarding 

innovation and high quality. Removing artificial restraints on 

competition and computer choice maximizes the number of sellers. 

Ten years ago, competition was restrained by collusion among 

contact lens manufacturers and optometric trade associations who forced 

consumers to purchase replacement contact lenses from their prescribing 

optometrist rather than from cheaper suppliers. Consumers paid 20 to 40 

percent more. That problem was solved by the Fairness to Contact Lens 

Consumers Act and the injunction entered in the litigation by the 

Attorney General’s Office. Now we face a new threat. 

It is a shame that health care professionals, manufacturers, and their 

associations are so afraid of competition that they engage in artifices to 

deny choices to consumers and put their own financial interests ahead of 

patient interests. Some contact lens manufacturers have grown rapidly 

by promising optometrists that the optometrists can increase their profits 

by forcing consumers to purchase high price lenses available only from 

the optometrist that writes the prescription. This hijacking of consumer 

interest is possible only because of two factors that are unique to the 

contact lens industry. First, contact lenses can be sold only by 

prescription, and that prescription must identify the contact lens by brand 

name. Second, optometrists not only treat patients, they also sell lenses 

to those patients. Unlike physicians prescribing medications, 

optometrists sell what they prescribe. These two factors permit 

optometrists’ business interests to override the optometrist’s duty to 

serve the interest of their patients. 

Promoting consumer choice in the health care industry is 

exceedingly tricky. The difficulty lies in separating medical decisions 

from the financial decisions. If a way can be found to divorce those two 

categories from each other, it is possible to maximize the consumer 

welfare, while leaving medical decisions to health care providers. We 

want to prevent health care providers from disguising their economic 

interests as health care concerns. This separation of economic and 

medical influences can be accomplished in the contact lens market, and 

this involves three steps: One, separating the demand for prescriptions 

from the demand for replacement lenses; second, eliminating 

optometrists’ ability to tie the eye exam to the purchase of replacement 
28

contact lenses; third, increasing competition for the sale of replacement 

lenses. The larger the number of sellers, the lower the prices that will be 

offered to consumers. 

This solution does not limit an optometrist’s ability to prescribe the 

product that is best for the patient. What it does do is limit the 

optometrist’s ability to charge his patient supra competitive prices for a 

product that is available only from that practitioner. The best way to 

ensure that an optometrist truly believes that one particular brand is the 

best product for a patient is to let that patient buy additional lenses from 

other sellers. 

The legislation proposed, H.R. 5762, is a skillful device to separate 

the medical and financial influences that affect a patient’s purchase of 

replacement lenses. Optometrists would remain free to sell what they 

prescribe, but it would not be able to prescribe what they alone sell. The 

bill would increase competition and consumer choice in three important 

ways: One, increase competition between manufacturers of contact 

lenses; two, increase competition between prescribers of contact lenses; 

and, three, increase competition between contact lens sellers who do not 

prescribe lenses and contact lens prescribers who both prescribe and sell 

lenses. 

Antitrust enforcers seek to eliminate artificial influences that restrain 

competitive market forces. This bill would accomplish that goal in a 

manner that would directly benefit and substantially benefit millions of 

consumers. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Klein follows:] 

PREPARED STATEMENT OF WAYNE KLEIN, ASSISTANT ATTORNEY GENERAL, OFFICE OF THE 

ATTORNEY GENERAL, STATE OF UTAH

My name is Wayne Klein. I am a special Assistant Attorney General prosecuting 

antitrust violations for the State of Utah. I appreciate the opportunity to testify here today 

on H.R. 5762. Helping consumers maximize the value of their contact lens purchases is 

important both to buyers of lenses and to the creation of a competitive market for the sale 

of replacement lenses. This Subcommittee is familiar with the anticompetitive and 

abusive practices that have been prevalent in this industry. Thank you for adopting the 

Fairness to Contact Lens Consumers Act in 2002. 

 This topic has consumed many years of my professional life as an antitrust enforcer. 

First was the six-year litigation against the then-dominant contact lens manufacturers. 

Utah was one of 32 states that sued contact lens manufacturers and others alleging 

conspiracies to prevent consumers from obtaining prescriptions and conspiracies to 

prevent discount suppliers of replacement contact lenses from obtaining lenses to sell.1

 

 

1 In re Disposable Contact Lens Antitrust Litigation, MDL 1030 (M.D. Fla). Additional information 

about that enforcement case can be found in the testimony of Robert L. Hubbard before this 

Subcommittee on September 9, 2001 (testifying in support of the Fairness to Contact Lens 

Consumers Act). 
29

Second was our support for passage of the Fairness to Contact Lens Consumers Act in 

2003. Third, in 2004, the Utah Attorney General submitted comments to the Federal 

Trade Commission on behalf of 31 states urging improvements to the proposed Contact 

Lens Rule. The FTC adopted our recommendations. Fourth was helping draft the Utah 

Contact Lens Consumer Protection Act, which is a forerunner to H.R. 5762. 

 I am here to say that more needs to be done to promote consumer choice and to 

protect buyers of replacement contact lenses. 

Antitrust Laws and Anticompetitive Conduct by Sellers of Contact Lenses

 The antitrust laws, often referred to as the Magna Carta of the free enterprise system, 

are designed to maximize consumer welfare and promote consumer choice. Strong 

competition is the best means of delivering the highest number of goods to consumers at 

the lowest prices while rewarding innovation and high quality. Removing artificial 

restraints on competition and consumer choice maximizes the number of sellers. 

 Ten years ago, competition was restrained by collusion among the contact lens 

manufacturers and optometric trade associations who forced consumers to purchase all 

replacement contact lenses from the prescribing optometrist rather than from cheaper 

mail-order suppliers. The result was that consumers paid 20-40% more than the 

competitive price for replacement lenses. That problem was solved by the Fairness to 

Contact Lens Consumers Act and the injunction entered against the defendants in the 

states’ enforcement action. 

 Now we face a new threat. It is a shame that health care practitioners, 

manufacturers, and their associations are so afraid of competition that they engage in 

artifices to deny choices to consumers and put their own financial interests ahead of 

patient interests. Some contact lens manufacturers have grown rapidly by promising 

optometrists that they can increase their profits by forcing consumers to purchase highpriced lenses available only from the optometrist that writes the prescription. 

 This hijacking of consumer interest is possible only because of two factors that are 

unique to the contact lens industry. First: contact lenses can be sold only by prescription. 

That prescription must identify the contact lens by brand name; no substitutions are 

allowed or generic equivalents. Second: optometrists not only treat patients, they also 

sell lenses to those patients. Unlike physicians prescribing medications, optometrists sell 

what they prescribe.2

 The combination of these two factors permits optometrists’ 

business interests to distort the optometrists’ duty to serve the interests of their patients. 

In that situation, the optometrist can charge whatever price the optometrist chooses. This 

is the antithesis of consumer choice. 

Consumer Welfare, Patient Health, and Improper Financial Motivations 

 Applying the antitrust laws in the health care industry is exceedingly tricky. The 

difficulty lies in separating the medical decisions from the financial ones. If a way can be 

found to divorce those two categories from each other, it is possible to use the antitrust 

laws to maximize the consumer decisions while leaving the medical decisions to the 

health care providers. We seek to maximize the economic benefits of competition 

without negatively affecting the legitimate health-related decisions. This principle also 

can be stated in the converse: we seek to prevent health care providers from disguising 

their economic interests as health care concerns. This concept was stated well in a June 

2006 letter from the American Optometric Association to the contact lens manufacturer 

CooperVision. The letter is attached. 

 We are very fortunate that this separation of economic and medical influences can 

be accomplished in the contact lens market. This involves three steps: 

 

2

 Some research has indicated that the average eye care provider earns more income from the sale of 

contact lenses than from providing eye examination services. 
30

1. Separating the demand for prescriptions from the demand for replacement 

contact lenses. 

2. Eliminating an optometrist’s ability to tie eye examinations to the purchase of 

replacement contact lenses. An optometrist remains free to do both: provide 

eye examinations and sell lenses. But the optometrist should not be able to 

force a customer to buy both products from the optometrist. 

3. Increasing competition for the sale of replacement lenses. Once a patient is 

freed from the compulsion of buying lenses only from the examining 

optometrist, all sellers of those lenses can compete for the customer’s business. 

The larger the number of sellers, the lower the prices that will be offered to 

consumers. 

Health Care Concerns Are Protected

 This solution does not limit an optometrist’s ability to prescribe the product that is 

best for the patient. What it does do is limit an optometrist’s ability to charge his patient 

supracompetitive prices for a product available only from that optometrist. Under the 

Act, an optometrist can prescribe any contact lens brand, so long as the manufacturer of 

that lens makes that brand available to a reasonable number of other sellers of 

replacement contact lenses. The best way to ensure that an optometrist truly believes that 

one particular brand is the best product for a patient is to empower that patient with the 

ability to buy additional lenses from other sellers – who may compete with the examining 

optometrist. 

Competitive Markets May Increase Health Benefits

 In the antitrust conspiracies of the last decade, sellers made the false claim that 

buying replacement lenses from alternative channels raised the health risks to patients. 

No evidence was ever presented in support of that claim and the defendants agreed not to 

make that assertion absent scientific evidence of health risks. State antitrust enforcers 

believe that lower prices and greater convenience for patients will actually increase the 

likelihood that patients will replace their lenses at the frequency recommended by their 

optometrists. 

Summary 

 This legislation is a skillful device to separate the medical and financial influences 

that affect a patient’s purchase of replacement contact lenses. Optometrists would remain 

free to sell what they prescribe, but they would not be able to prescribe what they alone 

sell. The bill would increase competition and consumer choice in three important ways: 

1. Increased competition between manufacturers of contact lenses; 

2. Increased competition between prescribers of contact lenses (optometrists); and 

3. Increased competition between contact lens sellers who do not prescribe lenses 

and contact lens prescribers who prescribe and sell lenses. 

 Antitrust enforcers seek to eliminate artificial influences that restrain competitive 

market forces. This bill accomplishes that goal in a manner that will directly and 

substantially benefit millions of consumers. I urge this Subcommittee to push adoption 

of this legislation. 

[The statement of Mr. Shurtleff submitted for the record follows:] 

Mr. Chairman, and Members of the Subcommittee, my name is Mark Shurtleff and I 

am the Attorney General of Utah. I appreciate the opportunity to appear before you today 

on these important issues. 

For many years, the state attorneys general have fought to provide consumers with 

lower prices and more choices when purchasing contact lenses. In the 1990s, a majority 
31

of attorneys general sued the American Optometric Association (AOA), the Contact Lens 

Association of Ophthalmology (CLAO), and the largest contact lens manufacturers for 

colluding to restrict competition. 

Many of these same attorneys general strongly supported the Fairness to Contact 

Lens Consumers Act (FCLCA), a law that gives consumers a right to their contact lens 

prescription and the freedom to choose where to buy their lenses. 

As part of our long-standing efforts to protect contact lens wearers, the attorneys 

general strongly support H.R. 5762. This legislation is necessary to end a practice that 

threatens competition, threatens ocular health, and threatens to undermine the FCLCA. 

Certain manufacturers are limiting distribution of their contact lenses solely to eye 

doctors. This practice is designed to lock consumers into purchasing contact lenses from 

the eye doctor writing the prescription. 

The so-called “doctors only” marketing scheme puts the eye doctor’s profit motive 

ahead of patient health. It is designed to insulate eye doctors from the increased 

competition the FCLCA intended to spur and to limit consumer choice. 

This same anti-consumer, anti-competitive practice was the subject of the multi-state 

litigation I previously referenced. The central issue in that case was the manufacturers’ 

refusal to sell contact lenses to retailers not affiliated with an eye doctor. 

The attorneys general believe manufacturers engaged in the “doctors only” 

marketing scheme to entice eye doctors, who also sell the lenses they prescribe, to write 

prescriptions for restricted lenses. In their dual role as both prescriber and retailer, eye 

doctors have an inherent conflict of interest which makes them more likely to prescribe 

lenses that restrict competition and maximize profits. 

During nearly seven years of litigation, over 200 depositions, 45 motions for 

summary judgment, a docket sheet with over 1,400 entries and five weeks of trial before 

a jury, no evidence surfaced to demonstrate any consumer benefit resulting from limiting 

distribution of contact lenses only to eye doctors. In fact, the evidence indicated that 

“doctors only” lenses run counter to the health interests of consumers. Easier access to, 

and lower prices for, contact lenses encourage patients to replace their lenses more 

frequently. 

To settle this litigation, the named manufacturers agreed to sell their lenses in a 

commercially reasonable and non-discriminatory manner to mail order, Internet, 

pharmacies, and other retailers not affiliated with an eye doctor. With these consent 

decrees in force, competition has flourished and consumers have benefited from lower 

prices and more choices. 

While these consent decrees were a significant victory for consumers, litigation 

alone cannot address all threats to competition in the contact lens market. Litigation is 

particularly ineffective in addressing the fundamental structural problem in the contact 

lens industry – doctors selling the lenses they prescribe. 

Congress attempted to regulate this inherent conflict of interest in passing the 

FCLCA. However, the competitive and consumer protection benefits of the FCLCA are 

currently at risk. 

Since passage of the FCLCA, certain manufacturers have engaged in an aggressive 

effort to entice eye doctors to prescribe patients lenses only available at the doctor’s own 

store. The attorneys general are concerned that, unless all manufacturers abandon these 

restrictive distribution policies, the effect will be to harm consumers. Consumers will 

pay more for contact lenses and may suffer adverse health consequences if higher prices 

cause them to replace lenses less frequently than recommended. 

Mr. Chairman, H.R. 5762 is necessary to ensure that all contact lens wearers enjoy 

the benefits of the FCLCA and the attorneys general litigation. The legislation 

effectively codifies the consent decrees to prevent manufacturers from engaging in an 

anti-competitive practice. This will advance the public interest by promoting competition 

and patient safety. 
32

You will likely hear today that H.R. 5762 will compromise patient health. This 

argument is baseless, and one more example of the false health claims that the optometric 

community has made repeatedly over the years. 

It bears highlighting that, in addition to suing the contact lens manufacturers, the 

attorneys general also sued the national associations of optometry and ophthalmology – 

the same groups testifying here today. Optometry and ophthalmology settled the 

attorneys general action by paying fines and agreeing not to make claims that consumers 

could suffer adverse health events if they did not buy contact lenses from their eye 

doctor. 

Specifically, optometry and ophthalmology agree that they: 

• (a) will not ask or encourage any contact lens manufacturer to refuse to sell 

contact lenses to any channel of trade; 

• (b) will not make an agreement with any manufacturer to restrict the supply of 

contact lenses to any channel of trade; 

• (c) will resist any invitation by any contact lens manufacturer to enlist the eye 

doctor’s aid in enforcing any manufacturer’s distribution policy refusing to sell 

contact lenses to any channel of trade; and 

• (d) will not represent directly or indirectly that increased eye health risk is 

inherent in the distribution of replacement disposable contact lenses by mail 

order, or pharmacy or drug stores. 

I would like to submit these settlement agreements for the record. 

Mr. Chairman, in conclusion, Congress should finish the job it started in passing the 

FCLCA. H.R. 5762 will ensure that America’s 36 million contact lens wearers have the 

freedom to purchase contact lenses from their chosen supplier, regardless of whether that 

supplier is affiliated with an eye doctor. 

Thank you for considering these views. I would be happy to answer any questions 

that Members of the Subcommittee may have for me. 

MR. STEARNS. Thank you. 

Mr. Coon, welcome. 

MR. COON. Thank you, Mr. Chairman. My name is Jonathan Coon. 

I am the CEO of 1-800 Contacts. I started the business in college in 

1992, shortly after I began wearing contact lenses. I just felt like 

someone could offer a better price and better service than I experienced 

when I got my contact lenses, and as it turns out, I wasn’t alone. In the 

last 14 years we have shipped 15 million orders to more than 5 million 

customers. 

In passing the Fairness to Contact Lens Consumers Act in 2003, this 

committee clearly intended that prescriptions be more than just a piece of 

paper. The report this committee filed with the FCLCA read, and I 

quote, “the consumer’s right to a copy of their contact lens prescription 

means nothing unless consumers can fill that prescription at the business 

of their choice.” And again, that is the report this committee filed with 

the FCLCA. 

Unfortunately, some manufacturers are offering doctors a way to 

give patients a prescription, but prevent them from buying from the 

business of their choice. The best illustration of this is the ads that 
33

promote the practice. These are trade ads that are focused at doctors who 

are supposed to be focused on the health interests of their patient. 

Clearly this is an intent and effort to get around the release of a 

prescription. This is an ad on the left paid for by a company called 

Ocular Sciences, which is now owned by CooperVision. It says, quote, 

“we would get calls for patients from 1-800 Contacts asking us for their 

prescription; I wanted to use another strategy to prevent that from 

happening.” So the strategy best described in another ad, “a lens that 

cannot be shopped around.” It is interesting that a doctor would be 

interested in a lens that cannot be shopped around, but that is because 

they not only prescribe lenses, they also want to sell them. Another ad is 

even more explicit. It says since ProClear lenses are only available 

through your practice, you will get what you are looking for, increased 

patient loyalty and greater profitability. And that ad bears the headline, 

“Let’s see, you will make more money.” And again, that ad is directed 

to doctors. There is a new entrant that has entered this market recently, 

and they have adopted the same strategy. In fact, in the last 5 years, no 

new manufacturer has entered this market with anything other than a 

purely doctors-only strategy. 

The intent of Congress and doctors-only lenses are clearly at odds 

with each other. The purpose of the law was to allow consumers to 

choose; the purpose of this practice is to deny them that choice. This 

doesn’t happen with drugs. No one goes to Walgreen’s only to find out 

they can’t get their prescription filled because the doctor prescribed 

something that only the doctor can sell. This committee got it right in 

the report language, “the prescription means nothing if the patient can’t 

fill it at the business of their choice.” 

In granting consumers the right to choose where they purchase, 

Congress was also very clear that third party sellers must verify 

prescriptions, wait 8 hours to hear from the doctor, cancel an order if the 

eye doctor tells them the prescription is invalid. 

Verification is the single most important thing our company does. 

Since the law went into effect in early 2004, we have processed and 

verified prescriptions for 5 million orders. We have canceled 861,000 of 

those orders. An average order is around a hundred dollars. A single 

violation of the FCLCA bears a fine of $11,000. There is nothing to be 

gained by anything less than full and unconditional compliance with the 

Act. 

We employ 50 people in our verification department and have made 

substantial investment in redundant phone systems, databases, and 

hardware. We keep detailed records of every verification and every 

response from the doctor. We go beyond what is required by the law and 

beyond what is required by the FTC rule. That is why we are able to 
34

respond this morning with the facts about allegations that I learned for 

the first time last night as I read Dr. Curtis’ written testimony. 

Dr. Curtis claims that 1-800 Contacts sold lenses with no verification 

or contact with his office on 17 of the 18 orders he supposedly tracked. 

We keep detailed records and recordings of every single order and every 

interaction with the doctor. Our records with Dr. Curtis’ office show that 

in the last 12 months we have received 117 orders from Dr. Curtis’ 

patients. We have made 192 phone calls to Dr. Curtis’ office and sent 3 

faxes. We spent a total of 8 hours and 32 minutes on the phone with his 

staff. For each of these 192 phone calls we have a separate digital 

recording of the person in Dr. Curtis’ office answering the phone, so we 

know who we spoke with. 

After navigating Dr. Curtis’ automated phone system that answered 

most of our calls, our agents spoke predominantly with Gail, Kim, Lori, 

and Liz. I ask to submit for the record a log of all of our 

communications with Dr. Curtis’ office for the last 12 months. 

MR. STEARNS. By unanimous consent, so ordered. 

[The information follows:] 
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MR. COON. Thank you, Mr. Chairman. I would also add that if the 

committee has interest we can also provide copies of our phone bill from 

Verizon that will match and verify every call, time, and the duration of 

each of these 192 phone calls to Dr. Curtis’ office. 

Despite this and other unsupported claims that have been leveled 

against our company, we want to have a good relationship with eye 

doctors, and in fact do with most doctors and with most manufacturers. 

The reason for the conflict today is the same as when I testified before 
47

this committee in 2003, it is that eye doctors sell what they prescribe and 

they compete with anyone else trying to fill that prescription. That 

inherent conflict of interest either has to be eliminated or managed in 

order to ensure that 38 million contact lens wearers don’t get caught in 

the middle. 

That said, I believe there is actually more common ground here than 

it might appear from everyone’s written testimony. I thank the 

committee for your time, and I look forward to your questions. 

[The prepared statement of Mr. Coon follows:] 

PREPARED STATEMENT OF JONATHAN C. COON, CHAIRMAN AND CHIEF EXECUTIVE 

OFFICER, 1-800 CONTACTS, INC. 

Mr. Chairman and Members of the Subcommittee, my name is Jonathan Coon and I 

am the CEO of 1-800 CONTACTS. Our company is the largest direct marketer of 

prescription contact lenses, serving approximately two million consumers. 

I appreciate the opportunity to appear before the Subcommittee today. I am grateful 

to the Subcommittee for investing time on the important issues facing America’s 38 

million contact lens wearers. 

Our company believes that contact lens wearers should be afforded two basic 

consumer protections: 

1. Every contact lens wearer holding a valid prescription should have the 

freedom to choose where her prescription is filled. 

2. Every contact lens wearer should feel confident that her prescription is 

based on health needs and not influenced by the prescriber’s financial 

interests. 

Unlike most pharmaceuticals, contact lenses are regulated medical products that are 

sold by the prescriber, creating an inherent conflict of interest. Congress reviewed this 

conflict in detail in the 2003 hearings held before the passage of the Fairness to Contact 

Lens Consumers Act (FCLCA). In the FCLCA report, Congress recognized this conflict 

of interest when this committee concluded: 

“Consumers continue to face a difficult time getting prescriptions filled by 

alternative third party sellers due to prescription verification obstacles. Unlike 

medical doctors who are prohibited from selling the drugs they prescribe, eye 

doctors and optometrists (“doctors”) are able to fill the contact lens 

prescriptions they write. This sets up an inherent conflict of interest because 

third party sellers are forced to compete for the sale of lenses with the 

individual who is writing the prescription.” 

The committee recommended, and Congress agreed, that based on an “unusually 

high number of consumer complaints in states that rely on active verification schemes” 

that “a passive verification system ensures that consumers are not caught in the 

competitive tug-of-war between doctors and third party sellers for the sale of contact 

lenses.” 

Congress understood in passing the FCLCA that having a copy of the prescription is 

meaningless if the retailer chosen by the consumer cannot get the prescription verified. 

For example, when consumers seek to refill their prescriptions for medicines, it’s 

generally a simple process – the consumer goes to his or her local pharmacy, the 

pharmacy calls into the prescribing physician and the physician’s office then promptly 
48

confirms, corrects or rejects the refill. That’s the way it should work with refills of 

contact lens prescriptions – but in most cases it does not. 

Since eye care professionals both prescribe and sell contact lenses, verification 

amounts to the consumer asking their doctor’s permission to buy lenses from a 

competitor. Before the FCLCA, these verification requests were ignored more than half 

the time. After the FCLCA, these verification requests are still ignored more than half 

the time, but this lack of response does not prevent the consumer from buying from the 

doctor’s competitor. Several states examined this issue closely and some enacted 

different verification systems before Congress enacting the FCLCA and created a federal 

standard. The state laws at the time fell into basically two different verification systems. 

1. “Positive verification” requires a competing seller to wait indefinitely for the 

eye doctor, who sells contacts, to respond to the verification request. The seller 

must wait until a response is received and the patient has no recourse other than 

to complain when the doctor refuses to grant permission to a competitor to 

make a sale. This method has proven to result in a very large number of 

consumer complaints. 

2. “Presumed verification” defines how long an eye doctor has to respond to a 

verification request when a consumer chooses to purchase from a seller that is 

not an eye doctor and prevents a doctor from blocking access to competitors by 

simply ignoring the request. This system requires a seller to verify the 

prescription directly with the prescriber and gives the prescriber a reasonable 

time period in which to reply. If the prescriber tells the seller within that time 

period that the prescription is expired or invalid, the seller must cancel the 

order. If the prescriber does not respond to the seller within the defined time 

period, the seller can assume the prescription information is correct and fill the 

order. 

Presumed verification was described by the FTC at the 2003 hearing as a self 

enforcing system because doctors have a financial interest to enforce the law 

and prevent invalid prescriptions from being filled by competitors. However, 

unlike a positive verification system in which the doctor’s refusal to respond 

can stop a patient’s order from a third party, a presumed verification system 

requires the doctor to actively do something to cancel the patient’s order. 

A positive, or active verification system can work where the prescriber has no 

conflict of interest and does not compete with others filling the prescription. The 

verification process, communication methods, and time frame for response between 

medical doctors and pharmacies are not defined. This system works despite the lack of 

defined rules because medical doctors do not sell drugs and pharmacies do not prescribe. 

The roles of medical doctors and pharmacies are defined and limited in such a way that 

cooperation is not a problem. Pharmacies are not asking a competitor for permission to 

fill an order. Medical doctors are not losing income by cooperating with pharmacies. 

Where positive verification systems have been implemented for the sale of 

replacement contact lenses, the result has been widespread consumer dissatisfaction. 

Thousands of consumers waited so long for a verification response that more than half 

ultimately canceled their orders. Most of these customers give up and went back to the 

doctor to purchase lenses. Many just kept wearing their old lenses. 

In just Texas alone, where an indefinite time period system had been in place for 

more than a year, our company canceled more than 40,000 customer orders solely for 

non-response by the eye doctor. Consumers filed more than 4,300 hand-signed 

complaints with the optometry board. Additional complaints were filed by consumer 

groups. The optometry board (made up of optometrists) took no action on any of the 

consumer complaints. The result was an unmitigated disaster for Texas consumers with 
49

more than half of all third party seller orders canceled simply because the eye doctor 

never responded - in any time period. 

A presumed verification system was first called for by the Federal Trade 

Commission (“FTC”) staff in its comments before the Connecticut Opticians Board in 

2002. FTC proposed that the right way to deal with the conflict of interest of doctors 

selling what they prescribe and the competitive relationship between eye doctors and 

third party sellers was a presumed or passive verification system. The FTC stated that the 

right verification system for this market was one in which “a valid prescription, 

communicated to the seller by the patient, can be presumed verified if the doctor is 

contacted and given sufficient opportunity to correct any errors.” 

This compromise system was enacted into law in California in 2002. The system 

was developed with the involvement of ophthalmologists, optometrists, consumer groups, 

the California Medical Board, and the California Optometric Association. In their written 

statement supporting the California bill, the California Optometric Association concluded 

that the law “supports safe and responsible patient access to contact lens prescriptions” 

and “strikes a reasonable balance between access and accountability.” Our Company 

processed more than several hundred thousand orders under this system before the 

FCLCA was enacted and did so without any complaints being received by the medical 

board from consumers, online sellers, or eye doctors. 

Based on the above mentioned testimony, evidence and hearings, the FCLCA was 

enacted and the passive verification system has been the law of the land since December 

of 2003. To date there has been no meaningful evidence that the law is not working or 

that passive verification is not the right system to manage the conflict of interest of a 

doctor selling what they prescribe. Although some on today’s panel will probably make 

unsubstantiated claims to the contrary, Congress did not make a mistake in adopting a 

passive verification system as there is no evidence to support their assertion that this 

provision of the law should be repealed and replaced with the already tested and failed 

positive verification system. Instead, the verification system under the FCLCA has 

allowed millions of consumers the right to purchase their contact lenses at the retailer of 

their choice. However, a loophole to the FCLCA has surfaced which threatens to erase 

all the freedoms Congress gave to consumers as part of the Act. 

Unlike pharmaceuticals, contact lens prescriptions are brand specific – with no 

generic lenses and no substitution allowed. 

Once prescribed a specific lens, federal law only allows the patient to be sold the 

“same contact lens . . . manufactured by the same company” (15 U.S.C. 7603(f)). Unlike 

pharmaceuticals, the prescriber can specify a lens sold only to doctors and effectively 

force the patient to purchase lenses at the doctor’s store or through an affiliated retailer. 

Trade advertisements promise these benefits to doctors who prescribe restricted lenses. 

To provide patients with basic consumer protections, the FCLCA seeks to provide 

consumers with the right to purchase from any retailer, including those not affiliated with 

a prescribing doctor. The Committee report accompanying the FCLCA states that the 

law “allows consumers to purchase contact lenses from the provider of their choice.” 

The FCLCA has had many positive impacts on the marketplace, and has provided 

many consumers with real benefit. Despite the law’s fundamental goals, patients 

prescribed so-called “doctors only” lenses continue to be locked into buying lenses from 

the prescribing doctor or a doctor-affiliated retailer. This loophole allows a doctor to 

comply with the FCLCA by releasing the prescription, but avoid the intent of the law by 

prescribing a lens that is only available from a doctor or an affiliated retailer. 

Mr. Chairman, millions of Americans who wear contact lenses have no more right to 

choose where they buy lenses today than before the FCLCA was passed. We agree with 

the Committee’s report which states that, “The consumer’s right to a copy of their contact 

lens prescription means nothing unless consumers can fill that prescription at the business 

of their choice.” 
50

“Doctors only” lenses are marketed to eye doctors on their ability to increase 

prescriber profits by limiting competition and compelling patients to return to prescribers 

for lens purchases. A brochure for Extreme H2O lenses promises doctors “a lens that 

cannot be shopped around” and “a lens that will retain your replacement business.” 

An ad for ProClear lenses entices the doctor with its headline, “Let’s see. You’ll 

make more money.” The ad goes on to explain to the doctor that “since ProClear 

Compatibles are only available through your practice, you’ll get what you’re looking for: 

Increased patient loyalty and greater profitability.” 

This is the same scheme that 32 state attorneys general sought to stop in bringing 

multi-district litigation (MDL 1030) in 1997. At the time, 100 percent of the market was 

“doctors only,” with all three major manufacturers maintaining a “doctors only” 

distribution policy. The lawsuit led to consent decrees with the then three largest 

manufacturers – Johnson & Johnson, CIBA Vision, and Bausch and Lomb – requiring 

them to abandon their “doctors only” policies and sell to non-prescribers on the same 

terms as prescribers. 

H.R. 5762, introduced by Congressman Lee Terry, is necessary to assure that all 

consumers are afforded the protections of these consent decrees and those promised by 

the FCLCA. The bill codifies the consent decrees, under which 80 percent of all contact 

lenses have been successfully and efficiently sold since 2001. 

Like the consent decrees it seeks to codify, H.R. 5762 would protect consumers and 

promote competition and would remove the ability of any manufacturer to entice doctors 

to with offers of increased profits by restricting consumer choice. 

Thirty-nine state attorneys general said it best in endorsing the legislation: 

“We are very concerned that, unless all manufacturers abandon these restrictive 

distribution policies, the effect will be to harm consumers. Consumers will pay 

higher prices to purchase replacement lenses and may suffer adverse health 

consequences if the higher prices cause them to replace their lenses less 

frequently than recommended. Because of these risks, the restrictive 

distribution policies are undermining both the FCLCA and the MDL 1030 

settlements.” 

Despite the fact that manufacturers market “doctors only” lenses on their utility in 

restricting competition and locking in consumers, a February 2005 FTC report concluded 

that the marketing practice does not appear to harm competition and consumers. The 

FTC study is flawed and best characterized as a snapshot in time of a contact lens market 

that no longer exists. The reason the FTC study found competition for most lenses is 

because 32 states sued to stop the three largest manufacturers (at the time) from colluding 

with eye doctors. H.R. 5762 seeks to codify these settlements before they expire in 

November of this year. The settlements have worked and have created a competitive 

market for the lenses made by the companies that are subject to it. 

The fundamental flaw in the FTC report is its failure to adequately account for the 

two defining characteristics of the contact lens market – contact lenses are prescription 

devices and that eye doctors sell the lenses they prescribe. 

We do not dispute the FTC economist’s view that a manufacturer offering a retailer 

increased profits or exclusivity to promote the manufacturer’s over-the-counter products 

is a sound and reasonable marketing strategy for the manufacturer. However, 39 state 

attorneys general do see a problem for consumers when manufacturers offer doctors 

increased profits to promote and prescribe a prescription product. 

The FTC’s analysis ignores the fact that Federal law requires that a contact lens 

prescription is brand specific and must be filled with the same lens made by the same 

company as that specified by the doctor. Once a patient pays to be fitted and receives a 

prescription, if the lens is not available from her chosen retailer, there is no opportunity 
51

for the patient to choose another lens made by another manufacturer without paying for 

another exam and contact lens fitting. 

The FTC report is based on the assumption that Internet sellers denied direct access 

by the manufacture to “doctors only” lenses could obtain these lenses on the so-called 

“grey” market. Since the report was issued, the “grey” market for “doctors only” lenses 

has dried up. Every week, our company turns away thousands of consumers with valid 

prescriptions because we are not able to obtain the “doctors only” lenses prescribed by 

their doctor. 

It is important to note that CooperVision assures doctors that its lenses are not 

available from non-prescribing retailers while at the same time assuring the FTC and 

Congress that its lenses are widely available from non-prescriber affiliated retailers. 

CooperVision suggests that H.R. 5762 will adversely affect patient safety by 

requiring manufacturers to sell “doctors only” lenses to retailers not affiliated with eye 

doctors. The American Optometric Association (AOA) repeatedly made this same 

unsubstantiated claim in the multi-district lawsuit – in which it was a defendant. This 

argument was shown to be without merit. In fact, the AOA’s settlement, Section 2(h) 

reads: 

“The AOA shall not represent directly or indirectly that the incidence or 

likelihood of eye health problems arising from the use of replacement 

disposable contact lenses is affected by or causally related to the channel of 

trade from which the buyer obtains such lenses.” 

In addition, the coordinated effort between CooperVision and the AOA appears to 

run afoul of the AOA’s settlement, which clearly states in Section 2(e): 

“The AOA will resist any invitation by any contact lens manufacturer to enlist 

the AOA’s aid in enforcing any manufacturer’s distribution policy refusing to 

sell contact lenses to any channels of trade.” 

CooperVision’s president, Greg Fryling, is quoted in his company’s hometown 

newspaper, The Rochester Democrat and Chronicle, July 25th, 2006: 

“What we are also trying to do is push this more to optometrists and the 

American Optometric Association and have them present the case,” Fryling 

said. “In our view, it’s as much their battle as it is our battle.” 

It is odd for a manufacturer to publicly invite doctors to defend the manufacturer’s 

restrictive distribution policy. The AOA appears to agree, and sent a letter to 

CooperVision (attached) regarding “an immediate concern of the American Optometric 

Association” – namely, “marketing materials for contact lenses that emphasize factors 

subordinate to what is clinically best for the health of the patient’s eyes and vision” and 

asking CooperVision to “review your company’s marketing and advertising policies.” 

Even the AOA recognizes that it cannot openly support CooperVision’s offer of financial 

incentives to doctors to promote and prescribe CooperVision lenses. 

Medical doctors know that exclusive distribution deals between doctors and 

manufacturers are wrong. The American Medical Association code of ethics, 8.063, 

section 4 states: 

“Physicians should not participate in exclusive distributorship of health-related 

products which are available only through physician’s offices. Physicians should 

encourage manufacturers to make products of established benefit more widely 

accessible to patients than exclusive distribution mechanisms will allow.” 

Despite their settlement with 32 states and the AMA code, the AOA is opposing a 

bill that would eliminate exclusive distributorships between eye doctors and 

manufacturers and protect consumer choice. 
52

The AOA stated in a January 31, 2006 letter that “the AOA strongly endorses the 

idea that patients should be able to purchase their contact lenses from whomever they 

wish.” And yet the AOA “strongly opposes” a bill which would protect the patient’s 

right to do so. The bill does not limit what a doctor can prescribe for any patient. The 

bill does not limit the doctor’s ability to sell any lens to any patient. The AOA cannot 

have it both ways. If they oppose a bill that has no affect on doctors and protects patient 

choice, then they oppose patient choice. 

We ask the Committee to reaffirm the intent of the Fairness to Contact Lens 

Consumers Act - to allow consumers to fill their prescriptions for contacts where they 

choose. Thirty nine state attorneys general have signed a letter expressing the urgent 

need for this legislation in order to ensure the consumer protection intended by the 

FCLCA and the 32 state settlements (MDL 1030). Please pass HR 5762 and close this 

loophole before the settlements expire November 1st

. 

Mr. Chairman, thank you for the opportunity to testify. I would be pleased to 

answer any questions you may have. 

MR. STEARNS. Thank you. 

Mr. Fryling, welcome. 

MR. FRYLING. Mr. Chairman, and distinguished members of the 

subcommittee. My name is Gregory Fryling. I am the Chief Operating 

Officer of CooperVision, which is the manufacturer of soft contact lenses 

based in Fairport, New York. 

Let me begin by making a few central points about the nature of the 

competition in our industry. First, the contact lens is one of the most 

competitive pro-consumer industries in the country. Quality has steadily 

gone up, and prices, now less than 50 cents per day, have steadily gone 

down over the past decade. 

Second, the contact lens sales at the manufacturing levels are 

characterized by extremely vigorous competition. We regularly 

negotiate distribution contracts under intense pressure from our 

competitors. The result is a wide variety of practices that benefits 

competition and consumers, such as private labels, discounts, special 

promotions. 

Third, CooperVision has been successful because of our high quality 

products and our policy of choosing distributors carefully. Other major 

manufacturers spend a significant amount of money on national 

advertising to influence consumers, we do not. Consequently, we sell 

many of our products at lower prices. Our private label programs also 

allow us to compete against the branded competitors, and these lenses are 

usually sold at lower prices than the branded product. This competitive 

dynamic is good for the consumer. 

Fourth, like other manufacturers, we choose distributors that 

preserve the reputation and image of our products for consumers. A 

Federal law that tends to force CooperVision to sell to all persons in a 

certain broad category would destroy this ability to control the quality 

and ensure service. 
53

Finally, some have argued that legal modest restrictions on the 

distribution have undercut Congress’ goal in passing the Fairness to 

Contact Lens Consumers Act. This claim is far off the mark. The FTC 

conducted an exhaustive study of the contact lens distribution and found 

that the evidence does not support the conclusion that these restrictions 

on the distribution harms competition and consumers. The premise that 

there is a problem that needs to be fixed in the contact lens is simply not 

supported by facts, and I am hoping later on that I can give you specific 

facts that support this rather than assumptions that were being presented 

earlier. 

I want to also address claims that have been made about 

CooperVision distribution practices, particularly the claim that one 

popular family of CooperVision lens, ProClear, is sold only to doctors. 

This claim is false. In addition to sales to prescribers, ProClear is sold to 

over 30 retail chains, including Wal-Mart, Sears, Costco, and many 

others which offer lenses to consumers at low prices at over 10,000 

convenient locations. 

The FTC looked specifically at ProClear Compatibles and found that 

the data does not support an inference that manufacturing limited 

distribution strategy affects the pricing of ProClear Compatibles. 

CooperVision has been hesitant to sell ProClear lenses to Internet 

suppliers and the retail outlets that have no relations with prescribers. 

ProClear has a special FDA approval for late day dryness, and we are 

very anxious to preserve the reputation of these lenses for high quality. 

We have also had the unfortunate experience of sales of counterfeit 

ProClear lenses on the Internet by 1-800 Contacts. I am not saying that 

1-800 Contacts knew these lenses were counterfeit, but they endangered 

patients’ eye health and risked harm to the reputation of this product and 

the entire company. 

Despite this experience, we have recently reviewed our policy of 

selling ProClear to Internet suppliers and have decided to offer these 

lenses to certain Internet suppliers, provided that certain assurance of 

quality and services can be met. For example, we have made an offer to 

sell these lenses to 1-800 Contacts in the near future, and we are 

currently in negotiations over this contract. 

Let me comment on an important issue of patient safety. 

As you know, contact lenses are a medical device regulated by the 

Food and Drug Administration, and manufacturers must monitor sales 

and take action if patient safety issues arise. For example, Bausch & 

Lomb recently recalled a contact lens solution brand due to the risk of 

fungal infection. And recently in France, CooperVision and Johnson & 

Johnson worked together with the health and legal authority to stop the 

sale of counterfeit contact lenses and to trace their source. 
54

Our ability to choose high quality distributors is critical to preventing 

patient safety problems and to effectively remedy problems that may 

arise. 

I understand that this hearing does not specifically focus on the bill, 

H.R. 5762, but I would like to comment briefly on the problem with this 

undoubtedly well-intentioned bill. 

A fundamental problem is the attempt to impose intrusive regulations 

on distribution decisions that have historically been left to the free 

market. While antitrust laws bar manufacturing from colluding in their 

choice of distributors, neither the Federal government nor the State 

governments have required manufacturers to sell to everyone. To do so 

would surely hurt consumers by undermining quality and service. 

Second, the bill undercuts competition. The bill requires 

manufacturers to sell to everyone in several categories in a 

nondiscriminatory manner. I cannot stress enough that a law barring 

discrimination is harmful to competition by potentially foreclosing 

competitive practices that are followed widely in our industry and many 

others, including volume discounts, private label arrangement, special 

promotion, individually negotiated discounts, and so on. 

Third, the bill creates regulatory chaos. Manufacturers are required 

to sell to every mail order company, Internet retailer, pharmacies, buying 

clubs, department stores, or mass merchandising outlets. None of these 

terms is defined. Confusion and arbitrary enforcement would be the 

inevitable result. 

Ultimately, bill 5762 represents a solution to a problem that does not 

exist. It is no surprise that of all the States to have considered similar 

legislation at 1-800’s urging, only Utah, 1-800’s home State, has passed 

the bill. The House rejected 1-800 proposed legislation in 2005 when it 

was included in the Senate appropriation measure, and I urge the House 

to do so again. 

Thank you for holding this important hearing and allowing 

CooperVision to participate. 

[The prepared statement of Mr. Fryling follows:] 

PREPARED STATEMENT OF GREGORY A. FRYLING, CHIEF OPERATING OFFICER,

COOPERVISION, INC. 

Mr. Chairman and Distinguished Members of the Subcommittee: 

 My name is Gregory Fryling. I am Chief Operating Officer of CooperVision, Inc., 

which is a manufacturer of soft contact lenses based in Fairport, New York. 

CooperVision sells contact lenses throughout the United States and in many other 

countries. Thank you for this opportunity to discuss possible federal regulation of contact 

lens distribution. 
55

The Contact Lens Industry

Let me begin by making four central points about the nature of competition in our 

industry. First, the contact lens industry is one of the most competitive, pro-consumer 

industries in the country. Quality has steadily gone up and overall wholesale prices have 

gone down over the past decade. There are literally hundreds of different lenses available 

to consumers, and the technology for correcting all kinds of vision problems with 

comfortable, long-wearing lenses has continued to improve. 

Second, contact lens sales at the manufacturing level is characterized by extremely 

vigorous competition. We regularly negotiate distribution contracts under intense 

pressure from our competitors. These negotiations take place, as they should, behind 

closed doors so that there is no opportunity for collusion. The result is a wide variety of 

practices that benefit competition and consumers, such as private labels, discounts, 

special promotions, and other common practices that economists and antitrust lawyers 

will recognize are the signposts of a vigorously competitive market. For example, the 

major proponent of legislation to regulate contact lens distribution, 1-800 Contacts, has 

recognized the values of private labels and uses them widely in its sales in Europe. That 

is good for consumers in Europe, but it seems 1-800 Contacts wants to restrict these 

practices in the United States. 

Third, there are four major contact lens manufacturers in the United States and a 

number of smaller ones, including some foreign firms that sell into the U.S. We started 

as a small company competing against the large companies. CooperVision has been 

successful because of our high-quality products and our policy of choosing distributors 

carefully. The other major manufacturers spend significant amounts on national 

advertising to consumers. CooperVision does not. Consequently, we sell many of our 

products at lower prices. Our private label program also allows us to compete against the 

branded competitors, and these lenses are usually sold at lower prices than the branded 

products. This competitive dynamic is good for consumers. 

Fourth, we want to sell as many lenses as possible, but we also want to ensure that 

our distributors provide high quality service, comply with all federal and state laws, and 

preserve the reputation of our lenses for excellent quality at a great price. Like other 

manufacturers, we choose distributors that preserve the reputation and image of our 

product for consumers. A federal law that attempts to force CooperVision to sell to all 

persons in several broad categories would destroy this ability to control quality and 

ensure service. It will hurt consumers, not help them. 

Finally, some have argued that legal, modest restrictions on distribution have 

somehow undercut Congress’s goals in passing the Fairness to Contact Lens Consumers 

Act. That claim is far off the mark. The FCLCA and the FTC’s rule implementing it are 

good for consumers and CooperVision strongly supports them. But there is no indication 

in the text of the law or the legislative history that Congress intended to force 

manufacturers to distribute lenses to anyone who wants to be a distributor. That kind of 

intrusive regulation is completely unprecedented in federal or state law, with the sole 

exception of Utah, which coincidentally happens to be the home state of 1-800 Contacts. 

The question is whether restrictions on distribution so limit choice that consumers 

are hurt. The answer to that is clearly no. In response to the claim by 1-800 Contacts that 

these restrictions harm consumers, the FTC conducted an exhaustive study of contact lens 

distribution. It expressly rejected this argument in a study released in February 2005. 

The FTC found that the evidence does “not support the conclusion that these restrictions 

on distribution harm competition and consumers.”1

 

1 The Strength of Competition in the Sale of Rx Contact Lenses: An FTC Study, Federal Trade 

Commission, February 2005, available at http://www.ftc.gov/opa/2005/02/contactlens.htm (the 

“FTC Study”). 
56

CooperVision’s Distribution Practices

 A number of claims have been made about CooperVision’s distribution practices, 

particularly the claim that one popular family of CooperVision’s lenses, Proclear, is sold 

only to doctors. The suggestion is that consumers have nowhere to go after they get a 

prescription for Proclear and, consequently, the prescribing optometrist or 

ophthalmologist can jack up the price. This is supposed to be a “loophole” in the 

FCLCA. 

 This claim bears no relationship to the facts. Proclear is sold to over 30 retail 

chains, including Wal-Mart, Sears, Costco and many others, which make up over 10,000 

retail outlets. These retail chains are shown in the Attachment to my testimony. These 

chains are convenient to consumers, offer low prices, and have the ability to drive hard 

bargains with manufacturers. 

 In response to complaints from 1-800 Contacts, the FTC looked specifically at 

Proclear Compatibles, the CooperVision contact lens that 1-800 Contacts has repeatedly 

identified as a “limited distribution lens.” The FTC report found that CooperVision or its 

authorized distributors sell Proclear Compatibles to retailers ranging from independent 

eye care professionals, to optical chains, to wholesale clubs, and to mass merchandisers.2

 

An FTC sample found these lenses were available to consumers in 86 percent of offline 

outlets sampled and 88 percent of pure online outlets sampled.3 Most importantly, the 

FTC found that whatever modest restrictions are placed on the distribution of these lenses 

do not harm competition or consumers. The FTC found that the data “do not support an 

inference that the manufacturer’s limited distribution strategy affects the pricing of 

Proclear Compatibles.”4 

 It is true that CooperVision has historically been hesitant to sell Proclear lenses to 

Internet suppliers and to retail outlets that have no relationship with prescribers. Proclear 

has a special FDA approval for late-day dryness, which is a medical condition that 

requires identification by qualified eye care professional when the prescription is written, 

and we are very anxious to preserve the reputation of these lenses for high quality. 

Internet suppliers present potential concerns since they may have no optician on staff for 

any consultation and there has been a record of some Internet companies failing to 

actively review prescriptions. In addition, we have had an unfortunate experience of 

counterfeit sales of Proclear by at least one major Internet supplier, 1-800 Contacts. I am 

not saying that 1-800 Contacts knew these lenses were counterfeit, but these sales 

endangered patients’ eye health and had the potential to harm drastically the reputation of 

both Proclear and CooperVision itself. We have recently reviewed our policy of selling 

Proclear to Internet suppliers and are considering providing these lenses to approved 

Internet suppliers, provided that certain conditions can be met, including assurances of 

quality and service. For example, we have made an offer to 1-800 Contacts to begin 

selling Proclear lenses to them in the near future and we are currently in negotiations over 

a contract.

Patient Safety

 It is essential that contact lens manufacturers, like manufacturers in other industries, 

retain the ability to choose reputable distributors that have ethical, efficient, and safe 

business practices. This allows manufacturers to protect and promote quality and insure 

the reputation of their products. It is important to remember that contact lenses are 

medical devices regulated by the Food and Drug Administration, and manufacturers must 

monitor sales and take action if a patient safety issue arises. For example, Bausch & 

Lomb recently recalled a contact lens solution brand due to a risk of fungal infection. 

 

2

 FTC Report at 16. 

3

 FTC Report at 26. 

4

 FTC Report at 14. 
57

And recently in France, CooperVision and Johnson & Johnson worked together with 

health and legal authorities to stop the sale of counterfeit contact lenses and to trace their 

source. Therefore, the ability to choose high-quality distributors is critical to preventing 

patient safety problems and to effectively remedying problems that might arise. 

The Problems with H.R. 5762

I understand that this hearing does not specifically focus on H.R. 5762, as 

introduced by Congressman Terry. However, since that is the only bill addressing 

contact lens distribution that has been introduced in the House, I would like to discuss 

briefly some of the problems with this undoubtedly well-intentioned bill. 

The fundamental flaw in the bill is its attempt to impose intrusive regulation on 

distribution decisions that have historically been left to the free market. The antitrust 

laws bar manufacturers from colluding in their choice of distributors. However, neither 

the federal government nor state governments have required manufacturers to sell to 

anyone who wants to buy their product. For example, there is no law requiring 

automobile manufacturers to sell their cars to anyone who wants to own a car dealership 

even though many consumers would like to have a dealership near their home or 

purchase a car on the Internet. Taking away the right of manufacturers to choose 

distributors would represent a drastic and harmful change in the legal environment. 

Second, H.R. 5762 will undercut competition. The bill requires manufacturers to 

sell to everyone in several distribution categories and to treat them in a “commercially 

reasonable” and “nondiscriminatory manner.” I cannot stress enough that a law barring 

“discrimination” in sales is harmful to competition by potentially foreclosing competitive 

practices that are now followed widely in our industry and many others, including 

volume discounts, private label arrangements, special promotions, individually negotiated 

discounts, and so on. 

The Robinson-Patman Act already prohibits certain types of price discrimination, 

but it has a number of defenses and exceptions, including, for example, a meeting 

competition defense. Most antitrust lawyers and economists will tell you that Congress 

did no favors for consumers by passing the Robinson-Patman Act, but at least 

manufacturers can live with it because of the available defenses. H.R. 5762 contains 

none of these. The result is one the most highly regulatory and intrusive proposals one 

can imagine. If a manufacturer refuses to sell to anyone in these categories, it is subject 

to civil penalties. If a manufacturer tries to negotiate a discount with a customer, other 

retailers can claim “discrimination.” If a manufacturer tries to sell a lens under a private 

label to a discount chain — a common industry practice that lowers prices to consumers 

— other potential distributors can also claim “discrimination.” As I discussed earlier, 

these practices greatly benefit consumers and competition. 

 Third, the bill is a recipe for regulatory chaos. Manufacturers are required to sell to 

every “mail order company, Internet retailer, pharmacy, buying club, department store, or 

mass merchandise outlet.” None of these terms is defined. Wal-Mart is certainly covered 

by the bill as a “mass merchandise outlet,” but it is not clear whether a small convenience 

store qualifies. Similarly, does a “buying club” that is set up by a few friends qualify for 

protection under the bill? Does everyone who sets ups an Internet website and wants to 

sell lenses qualify as an “Internet retailer”? If Congress mandates this intrusive, poorly 

thought-out regulatory program, confusion and arbitrary enforcement are the inevitable 

result. 

 Finally, H.R. 5762 will promote litigation. If a manufacturer turns down a retailer 

who wants to sell its lenses, the retailer can demand that the FTC enforce these provisions 

by bringing an action against a manufacturer. The FTC will then have to decide whether 

to investigate these charges. In states where state law allows a private action based on an 

alleged violation of FTC standards, a disappointed retailer may file a lawsuit alleging that 

a manufacturer has failed to sell lenses to it. The courts will then have to police 
58

distribution decisions that have historically been left to manufacturers’ business 

judgment. Ultimately, this confusion and potential litigation could prevent some lenses 

from being available to consumers. 

Conclusion

 In conclusion, this bill is bad for consumers and competition by reducing the quality 

of service, by reducing price competition, and by creating a regulatory nightmare that 

will promote litigation. It would force the FTC to implement a burdensome and costly 

regulatory program and to become involved in policing decisions that have historically 

been left to the free market. 

 Ultimately, H.R. 5762 represents a solution to a problem that does not exist. It is no 

surprise that of all the states to have considered similar legislation at 1-800’s urging, only 

Utah—1-800’s home state—passed the bill. The FTC has already rejected 1-800’s 

arguments. Former senior FTC officials and economic experts have concluded that the 

legislation pushed by 1-800 at the federal level would “likely lead to lower quality 

service and less promotional activity and potentially higher prices.”5

 And the House 

already rejected 1-800’s proposed legislation in 2005 when it was included in a Senate 

Appropriations measure. We urge the House to do the same this year. 

 Thank you for holding this important hearing and allowing CooperVision to 

participate. 

 

5

 Froeb & Zywicki Analysis at 3.
59

Attachment. Retail Chains Selling Proclear 

Chain Number of Outlets 

Cohens Optical 68 

Eye Masters 67 

EyeMart Express 65 

GVS 42 

Lenscrafters 823 

National Vision Inc 400 

Novamed 100 

Pearle Vision Centers 802 

Site for Sore Eyes 21 

Sterling Optical 105 

Vision Source LP 1500 

Wal-Mart 2246 

ABC 110 

Cole Duplicate as Sears 

Costco 345 

Doctors Optical Center 125 

Doctors Vision Center 80 

ECCA 320 

Empire Vision 89 

Eye Glass World 60 

For Eyes 120 

Nationwide 55 

Nephew’s Group 12 

Sears 880 

OECC 50 

BJ’s Optical 143 

Group Health 9 

Henry Ford Optimeyes 20 

Kaiser 110 

Moresi/Blum 35 

Sam’s Club 475 

Shopko 140 

Target 240 

United Optical 60 

US Vision 550 

MR. STEARNS. Thank you. 

Mr. Schein, Dr. Schein. 

DR. SCHEIN. Thank you, Chairman Stearns, Ranking Member 

Schakowsky, and distinguished committee members for inviting me here 

to testify on the Contact Lens Consumer Protection Act. 

My name is Oliver Schein. I am Professor of Ophthalmology at the 

Wilmer Eye Institute of John Hopkins University School of Medicine. I 

am a specialist in corneal diseases, and my research expertise is in public 

health and blindness prevention. 
60

Contact lenses are the most commonly used medical devices in the 

United States, and I have spent many years studying complications 

associated with these contact lenses. 

I am here today as a member of the American Academy of 

Ophthalmology, the largest national membership association of IMDs. 

IMDs are medical doctors who provide comprehensive medical, surgical, 

and optical care. More than 90 percent of the 17,000 IMDs in the United 

States are members of the Academy of Ophthalmology. 

The Contact Lens Consumer Protection Act, H.R. 5762, seeks to 

amend Public Law 108-164, the Fairness to Contact Lens Consumers 

Act. H.R. 5762 requires contact lens manufacturers to make any contact 

lens they produce, market, distribute, or sell available to specified 

alternative channels of distribution, such as mail order companies, 

Internet retailers, pharmacies, buying clubs, department stores, and mass 

merchandise outlets. 

Under this system, no limited distribution programs could be 

implemented by any contact lens manufacturer. As part of the Fairness 

to Contact Lens Consumers Act, the FTC was required to examine 

consumers’ access to contact lens, and the study states, in quotations, “it 

does not support the hypothesis that sellers are able to limit competition 

or harm consumers by charging higher prices for limited distribution or 

private label lenses.” 

After nearly 2 years of experience with the Contact Lens Rule, the 

American Academy of Ophthalmology remains concerned that particular 

provisions in the rule place the eye health of America’s more than 30 

million contact lens wearers at risk. Of principal concern is the so-called 

passive verification of contact lens prescriptions. Unfortunately, under 

the current rule, a contact lens prescription can be dispensed simply 

because a prescriber fails to communicate with the seller within 8 

business hours after a seller has contacted the prescriber for the purpose 

of verifying a contact lens prescription. This is what we refer to as 

passive or default contact lens prescription verification. In practical 

terms, contract lens sellers treat a nonresponse from a prescriber in 

exactly the same manner as they would a positive response. The contact 

lens in both instances are dispensed to the consumer. In other words, the 

prescription is dispensed unless the seller is told otherwise within 8 

business hours. 

The entire concept of passive or default verification is unprecedented 

in medical practice. Prescriptions for pharmaceuticals and all other 

medical devices are positively identified. Contact lenses are medical 

devices and as such are regulated by the FDA. The Academy believes 

that in the interest of patient safety contact lens prescriptions should also 

be positively verified prior to being dispensed to the contact lens wearer. 
61

When a contact lens wearer is required to present a new or current 

prescription to order contact lenses, it increases the likelihood that the 

patient will undergo an ophthalmic evaluation by an eye care 

professional. This in turn increases the likelihood of compliance with 

appropriate hygiene protocols. 

It is critical that all contact lens wearers receive professional eye care 

on a regular basis, at the very least to reinforce good contact lens hygiene 

practices and for early detection and prevention of adverse events. 

Mr. Chairman, under the current Contact Lens Rule, the potential for 

serious sight threatening ocular injury occurring as a direct result of 

passive verification of contact lens prescriptions is significant and real. 

In fact, the leading cause of consumer product related trauma is in fact 

the contact lens. The responsible and ethical contact lens practitioner 

endeavors to optimize the safety and comfort of his or her patients by 

first evaluating the patient, fitting the lenses, and then managing the 

patient’s contact lens wear. Accordingly, ongoing periodic evaluations 

after the initial prescription are very important to the patient’s overall eye 

health. However, because patients can obtain replacement lenses so 

easily from online providers, they often neglect follow-up examination. 

One of my colleagues recently reported that a 45-year-old patient 

had his contact lenses dispensed by a contact lens seller for 3 years 

without an eye examination. The patient presented in August 2005 with 

a severe bacterial corneal ulcer requiring a 3-day hospitalization. Nine 

months later the corneal scars still exists with diminished visual acuity to 

20/30. 

As recently as last week I treated a college student in Baltimore with 

a severe contact lens related keratitis. She obtains her contact lenses 

from Internet sources and has not had regular eye care in several years. 

When I investigated her contact lens hygiene practices, I learned that she 

has used the same small bottle of cleaning solution for more than 3 years. 

Whenever it approaches being empty, she simply refills it from a larger 

bottle. The same bacteria that we harvested from her cornea were grown 

from that small bottle. 

These sorts of stories are familiar to corneal specialists across the 

United States. The implication is not that Internet purchase causes such 

infections, it is that Internet purchase reduces the likelihood of periodic 

examinations and review of a sound contact lens practice. 

Since the Contact Lens Rule went into effect in August of 2004, 

dispensers have compiled a long history of verification abuses that 

consistently place sales before patient safety. 

Extended wear lenses are regulated as Class III devices, which is the 

most highly regulated FDA medical device category. Passive or default 

verification of contact lens prescriptions undermines the status of contact 
62

lenses as FDA regulated devices and in essence denigrates the need for a 

prescription at all. Passive verification is a flaw in the FCLCA that the 

American Academy of Ophthalmology believes lowers the bar for 

patient safety and opens the door for prescription verification failures 

that can ultimately result in patient harm. Unless the seller has a copy of 

the prescription or it has been positively verified by the doctor, any other 

verification system seems at odds with the FDA’s medically-based 

decision to regulate contact lenses as medical devices. The Academy of 

Ophthalmology remains hopeful that Congress will put the ocular health 

of America’s contact lens wearers first by reexamining this practice and 

occurrence of passive or default contact lens prescription verification, 

and then opting to eliminate them altogether. Thank you. 

[The prepared statement of Dr. Schein follows:] 

PREPARED STATEMENT OF DR. OLIVER D. SCHEIN, M.D., M.P.H., BURTON E. GROSSMAN 

PROFESSOR OF OPHTHALMOLOGY, JOHNS HOPKINS UNIVERSITY, ON BEHALF OF THE 

AMERICAN ACADEMY OF OPHTHALMOLOGY

Thank you, Chairman Stearns, ranking member Schakowsky, and distinguished 

committee members for inviting me here to testify on the Contact Lens Consumer 

Protection Act. 

 I am Dr. Oliver Schein. I am a Professor of Ophthalmology at the Wilmer Eye 

Institute of Johns Hopkins University School of Medicine. I am a specialist in corneal 

diseases, and my research expertise is in public health and blindness prevention. Contact 

lenses are the most commonly used medical devices in the United States, and I have spent 

many years studying complications associated with contact lenses. I am here today as a 

member of the American Academy of Ophthalmology, the largest national membership 

association of Eye M.D.s. Eye M.D.s are medical doctors who provide comprehensive 

medical, surgical, and optical eye care. More than 90 percent of the 17,000 practicing 

Eye M.D.s in the United States are members of the Academy 

 The Contact Lens Consumer Protection Act (H.R. 5762), seeks to amend Public Law 

108-164, the Fairness to Contact Lens Consumers Act (FCLCA). H.R. 5762 requires 

contact lens manufacturers to make any contact lens they produce, market, distribute, or 

sell available to specified alternative channels of distribution such as mail order 

companies, Internet retailers, pharmacies, buying clubs, department stores, and mass 

merchandise outlets. Under this system, no limited distribution programs could be 

implemented by any contact lens manufacturer. 

As part of the Fairness to Contact Lens Consumers Act (FCLCA), the Federal Trade 

Commission was required to undertake a study1

 to examine the strength of competition in 

the sale of prescription contact lenses. 

The study included these issues: 

1. Incidence of exclusive relationships between prescribers or sellers and 

manufacturers and the impact (if any) of such relationships and competition 

2. Difference between online and offline sellers of contact lenses, including price, 

access, and availability 

3. Incidence of, as well as the effect on consumers and competition of contact lens 

prescriptions that specified brand name or custom labeled lenses 

 

1

 The Strength of Competition in the Sale of Rx Contact Lenses: An FTC Study, February 2005 
63

4. Any other issue that has an impact on competition in the sale of prescription 

contact lenses 

In February of 2005, the Federal Trade Commission submitted the results of that 

study to Congress and concluded: 

“Our examination of these issues – exclusive relationships, private label lenses, and 

limited distribution lenses – suggests that such relationships are not prevalent in the 

market for contact lenses and are unlikely to limit competition and harm consumers. 

Exclusive relationships are rare; private label lenses, while more common, still 

represent a small portion of all sales of soft contact lenses; and limited distribution 

policies are not widely used. Moreover, our inquiry showed that a common, limited 

distribution lens, or its private label equivalent, was available from the overwhelming 

majority of outlets sampled. 

Given that the FCLCA permits sellers to fill prescriptions with equivalent national 

brand or private label lenses, consumers have a number of channels through which to 

obtain such lenses. In addition, these relationships may be an efficient way for 

manufacturers to provide beneficial incentives to their lens distributors, which in turn 

may lead to increased competition among various brands of lenses. 

In sum, the theory and the evidence examined do not support the conclusion that 

these distribution practices harm competition and consumers by allowing prescribers to 

lock in their patients to supracompetitively priced lenses”. 

In light of these findings, the American Academy of Ophthalmology wonders why 

there would be any need for H.R.5762. 

The Fairness to Contact Lens Consumers Act was signed into law on December 6, 

2003 and took effect on February 4, 2004. The Federal Trade Commission issued its 

Contact Lens Rule to implement the Act on June 29, 2004 and the Rule became effective 

on August 2, 2004. After nearly two years of experience with the Contact Lens Rule, the 

American Academy of Ophthalmology remains concerned that this rule places the eye 

health of America’s contact lens wearers at risk. 

Of principal concern is the so-called “passive verification” of contact lens 

prescriptions. Mr. Chairman, the entire concept of “passive” or “default” prescription 

verification is unprecedented in medicine. Prescriptions for pharmaceuticals and all other 

medical devices are positively verified. Contact lenses are medical devices and as such, 

are regulated by the FDA. The Academy believes that in the interest of patient safety, 

contact lens prescriptions should also be positively verified prior to being dispensed to 

the contact lens wearer. 

Unfortunately, under the current the rule, a contact lens prescription can be 

dispensed simply because a “prescriber fails to communicate with the seller within eight 

business hours” after a seller has contacted the prescriber for the purpose of verifying a 

contact lens prescription. In practical terms, contact lens sellers treat a non-response 

from a prescriber in exactly the same manner as they would a positive response; the 

contact lenses in both instances are dispensed to the consumer. In other words, the 

prescription is dispensed unless the seller is told otherwise. 

Prescriptions for pharmaceuticals and all other medical devices are positively 

verified and are not dispensed until the prescription is determined to be valid by the 

dispenser and in many if not all instances, the DEA or Medical License number of the 

prescribing physician is determined to be legitimate. Mr. Chairman, under the current 

Contact Lens Rule, the potential for serious sight threatening ocular injury occurring as a 

direct result of the passive verification of contact lens prescriptions is significant and real. 
64

The potential for injury is real because we know that the leading cause of consumer 

product-related ocular trauma is from contact lenses2

. 

There is little doubt that the passive or default verification of contact lens 

prescriptions increases the likelihood that expired or inaccurate prescriptions will 

ultimately be dispensed to consumers. This likelihood is increased when some contact 

lens sellers make it difficult, if not impossible, to be contacted by prescribers who are 

trying to inform the seller that the prescription in question is not valid or inaccurate and 

therefore should not be dispensed. The inability of dispensers to be contacted by 

prescribers is a clear violation of the FCLCA and FTC, to date, has issued several 

warning letters to dispensers requesting that they provide prescribers with a reasonable 

opportunity to communicate with them regarding prescription verification requests. 

Mr. Chairman, what concerns me as an ophthalmologist is the possibility that 

countless contact lens prescriptions that are expired, are being dispensed by sellers as a 

result of “passive” or “default” verification. 

The responsible and ethical contact lens practitioner endeavors to optimize the 

safety and comfort of his or her patients by first evaluating the patient, fitting the lenses 

and then managing the patient’s contact lens wear. Accordingly, ongoing periodic 

evaluations after the initial prescription are very important to the patient’s overall eye 

health. However, because patients can obtain replacement lenses so easily from online 

providers, they often neglect follow-up exams. 

Unlike glasses, with contact lenses there is a greater opportunity to endanger your 

eye health. Poorly fit contact lenses, along with poor maintenance and hygiene leave 

patients susceptible to corneal inflammation, bacterial, and other infections that can 

ultimately be sight threatening. 

It is not uncommon for an eye care professional to see patients that have not 

maintained periodic follow up evaluations. Such patients typically present with an 

assortment of chronic corneal conditions that could easily have been prevented or 

ameliorated by regularly scheduled evaluations by an eye care professional. 

There is consensus in eye care practice that there is a direct correlation between noncompliance and poor hygiene practices and contact lens related adverse events. 

Moreover, it is understood that 50 percent of all contact lens wearers, to some degree, are 

non-compliant with the hygiene instructions that they DO receive so it should come as no 

surprise that up to 80 percent of contact lens complications can be traced to poor patient 

compliance with recommended lens care guidelines3

. Mr. Chairman, these statistics 

underscore the importance of regularly scheduled evaluations for contact lens wearers 

and why the dispensing of expired contact lens prescriptions by way of passive 

verification undermines patient safety. 

When a contact lens wearer is required to present a new or current prescription to 

order contact lenses, it increases the likelihood that the patient will undergo an 

ophthalmic evaluation by an eye care professional. This, in turn allows for the early 

detection of contact lens-associated adverse events. It also provides the opportunity to 

evaluate and improve the patient’s compliance with optimal hygiene protocols. It is 

important that all contact lens wearers receive professional eye care on a regular basis, at 

the very least, to reinforce good contact lens hygiene practices. 

One of my colleagues recently reported that a 45 year-old patient had his contact 

lenses dispensed by a contact lens seller for three years without an eye exam. The patient 

presented in August of 2005 with a severe bacterial corneal ulcer, requiring a three day 

hospitalization. Nine months later, the corneal scar still exists with diminished visual 

acuity to 20/30. As recently as last week, I treated a college student in Baltimore with a 

severe contact lens-related keratitis. She obtains her contact lenses from internet sources 

 

2

 Consumer Product-Related Ocular Trauma, Claude L. Cowan Jr., MD, et al, Washington, DC 3

 Clinical Survey of Lens Care in Contact Lens Patients, Susan Stenson, MD, et al
65

and has not had regular care in several years. When I investigated her contact lens 

hygiene practices, I learned that she has used the same small bottle of cleaning solution 

for more than 3 years. Whenever, it approached being empty, she refilled it from a larger 

bottle. The same bacteria growing in her cornea was cultured from that small bottle. 

These sorts of stories are familiar to corneal specialists across the United States. The 

implication is not that internet purchase causes such infections. It is that internet 

purchase reduces the likelihood of periodic examinations and review of sound contact 

lens practice. 

Extended wear lenses, are regulated as class-three medical devices, which is the 

most highly regulated FDA medical device category. Passive or default verification of 

contact lens prescriptions undermines the status of contact lenses as FDA regulated 

devices and in essence, denigrates the need for a prescription at all. Passive verification 

is a flaw in the FCLCA that the American Academy of Ophthalmology believes lowers 

the bar for patient safety and opens the door for prescription verification failures that can 

ultimately result in patient harm. Unless the seller has a copy of the prescription or it has 

been positively verified by the doctor, any other verification system seems at odds with 

FDA’s medically based decision to regulate contact lenses as medical devices. 

In conclusion, the ocular health of consumers should not be placed at risk by 

methods used by contact lens sellers that are designed solely to augment the sales and 

dispensing of contact lenses. Since the Contact Lens Rule went into effect in August 

2004, dispensers have compiled a long history of verification abuses that consistently 

place contact lens sales before patient safety. 

The American Academy of Ophthalmology remains hopeful that Congress will put 

the ocular health of America’s contact lens wearers first by re-examining the practice and 

occurrence of passive or default contact lens prescription verifications and then opting to 

eliminate them altogether. 

Oliver D. Schein, M.D.,M.P.H. 

Burton E. Grossman Professor of Ophthalmology Johns Hopkins University 

American Academy of Ophthalmology 

MR. STEARNS. Thank you. 

And Dr. Curtis, welcome. 

DR. CURTIS. Thank you. 

Good morning, Mr. Chairman and Ranking Member Schakowsky 

and members of the subcommittee. 

I am Dr. Wiley Curtis, a member of the American Optometric 

Association, the AOA, and a private practice optometrist from Arlington, 

Texas. 

On behalf of the 35,000 members of the AOA, America’s frontline 

providers of eye and vision care, I want to thank you for this opportunity 

to appear at today’s hearing. 

The AOA was pleased to have played a very positive role in the 

debate over the contact lens law enacted in 2003, the Fairness to Contact 

Lens Consumers Act, the FCLCA. The AOA supported the legislation 

because we felt it tried to balance the patient’s ability to get their 

prescription with the need to assure that only properly verified 

prescriptions are filled. In fact, then Congressman Richard Burr, the 

sponsor of the FCLCA, specifically recognized the AOA in remarks on 
66

the floor of the House of Representatives during the final consideration 

of the FCLCA bill. 

Since then, the AOA has taken a leading role in educating its 

members about full compliance with the FCLCA. Our education 

materials have been reviewed and even praised by the FTC. The primary 

concerns of the AOA and its members today are the same ones we 

referenced before this panel in 2003, only now we have clear evidence 

that those concerns have materialized in a tangible form. 

We do not want to see any interference with the ability of patients to 

get their prescriptions and purchase their lenses wherever they choose. 

We do want to make certain, however, as the FCLCA envisioned, that 

lenses being sold by Internet and mail order sellers are being sold upon 

verification with a valid prescription. The contained outbreak this year 

of fungal keratitis among some contact lens wearers underscores the fact 

that contact lenses are indeed prescription medical devices and can cause 

serious injury when improperly fitted, worn, or cared for. 

Just last year, after reviewing cases in which consumers were harmed 

by the improper use of decorative noncorrective lenses that were widely 

available online or at flea markets, Congress took decisive action to 

safeguard public health. The passage of the Boozman-Barton-Waxman 

bill, now Public Law 109-96, provides for the regulation of all contact 

lenses as a medical device by the Food and Drug Administration and 

requires that such lenses only be sold pursuant to a doctor’s examination 

and prescription, just like corrective contact lenses. 

Optometrists remain particularly proud of this leadership role played 

by our colleague and your colleague, Dr. John Boozman, in making this 

a priority issue on Capitol Hill and helping to get it to the President’s 

desk. 

It is the very real potential for harm when contact lenses are worn 

improperly that makes the prescription verification safeguards the most 

important part of the FCLCA. With this in mind, I will offer my own 

experiences and the AOA’s recommendation for strengthening the law. 

First, though, I know that there has been discussion of so-called 

doctor-only lenses. Senator Bennett and Congressman Terry have 

introduced legislation seeking to make changes to the FCLCA to govern 

how contact lenses may be marketed by their manufacturers. 

Congressman Terry, a long time friend of our profession, has informed 

my Nebraska colleagues that he would welcome a hearing from 

optometry on how his bill can be improved. We are most appreciative of 

that and of his leadership in health care policy issues. With regard to the 

competition issues, I will expect to look to the FTC today to provide any 

relevant updates to their findings. 
67

I would like now to return to the issue of prescription verification. 

Simply stated, we believe that the time has come for some common 

sense and pro-patient updates to the prescription verification safeguards 

included in the FCLCA. Here is why. We are seeing contact lens orders 

being filled by sellers without any verification of the prescription by the 

prescribing optometrist. We are seeing contact lens prescriptions being 

refilled well beyond the time period that the prescription in question is 

valid. We are seeing sellers use mechanisms like automated calling 

systems to verify prescriptions which impose needless burdens on the 

doctors who want to communicate important patient information to the 

seller. 

Some of my own experiences are very relevant to this discussion. 

Over the course of this year I have tracked 18 contact lens orders placed 

with 1-800 Contacts. I am saddened to report that the first 17 orders 

were all filled by the company without any verification contact with my 

office, in an apparent violation of the FCLCA: No contact through the 

telephone, no contact through the fax machine, and no contact through 

e-mail. A subsequent order, the 18th, did generate a live automated 

telephone call request for a patient’s prescription to be verified. 

Nevertheless, since then, I am aware of additional cases in which patients 

received contact lenses through my office and my office was not 

contacted for a verification request. 

I hope we can all agree that these results fall well short of what this 

committee intended when it crafted prescription verification safeguards 

for patients in the FCLCA. That is why the AOA is encouraging 

Congress to examine the practices used by sellers and take the following 

corrective actions: Allow eye care providers the opportunity to receive 

verification requests from sellers through e-mails and faxes rather than 

automated telephone calls; ensure that all patient health considerations 

raised by an eye care provider are addressed by the seller before a 

contact lens order is filled; to increase the fines that could be imposed by 

the FTC on an unscrupulous contact lens sellers that would violate the 

law and endanger patients. 

These proposals are contained in legislation being crafted by 

Representative Ed Whitfield, the Chairman of the Oversight and 

Investigation Subcommittee. Optometry--and I am pleased to report 

ophthalmology--both support Congressman Whitfield’s bill and his 

efforts to ensure that patients come first. 

Thank you for this opportunity to present this testimony. 

[The prepared statement of Dr. Curtis follows:] 
68

PREPARED STATEMENT OF DR. WILEY CURTIS, O.D., MEMBER, AMERICAN OPTOMETRIC 

ASSOCIATION

Good morning Mr. Chairman, Ranking Member Schakowsky and members of the 

subcommittee. I am Dr. Wiley Curtis, a member of the American Optometric 

Association (AOA) and a private practice optometrist serving patients in Arlington, 

Texas and surrounding communities. 

On behalf of the 35,000 members of the AOA, America’s frontline providers of eye 

and vision care, I want to thank you for the opportunity to appear at today’s hearing. It is 
69

a pleasure to have a chance to report to you on the contact lens prescription verification 

practices of the online and mail order contact lens sales industry, and the concerns I have 

regarding their impact on the visual health and well-being of my patients and the patients 

of my colleagues in communities across the country. 

The AOA was pleased to be very actively involved and to have played a very 

positive role in the debate over the contact lens law enacted in 2003, the Fairness to 

Contact Lens Consumers Act (FCLCA). The AOA supported the legislation because we 

felt it tried to balance the patient’s ability to get his or her prescription with the need to 

assure that only properly verified prescriptions are filled. 

In fact, then-Congressman Richard Burr, once a member of the Energy and 

Commerce Committee and the sponsor of the FCLCA, specifically recognized the AOA 

and his own optometrist, my good friend Dr. Michael Burke, in remarks on the floor of 

the House of Representatives during final consideration of the FCLCA bill: 

“I appreciate the support of the American Optometric Association, especially 

my optometrist in Winston Salem, North Carolina, Dr. Burke, who read 

through these drafts. He helped us as we put the bill together. He improved the 

legislation and put us where we are today.” 

Three years ago, the President of my association appeared before this panel and 

affirmed our position that the AOA supports a consumer’s right to receive his or her 

contact lens prescription and have it verified to a third party. Since then, the AOA has 

taken a leading role in educating its members about full compliance with the FCLCA. 

Our widely disseminated education materials have been reviewed, and even praised, 

by the Federal Trade Commission (FTC). That’s why, Mr. Chairman, it is not a 

coincidence that the FTC “test shops” have found optometrists in compliance with the 

law, even as they have identified serious compliance issues among contact lens sellers. 

The primary concerns of the AOA and its members today are the same ones we 

referenced before this panel in 2003, only now we have clear evidence that those 

concerns have materialized in tangible form. We do not want to see any interference with 

the ability of patients to get their prescriptions and purchase their lenses wherever they 

choose. We do want to make certain however, as the FCLCA envisioned, that lenses 

being sold by Internet and mail order sellers are being sold upon verification that a valid 

prescription exists. 

It is important to remember that in spite of advances in safety and convenience – 

many of which my profession has played a role in – contact lenses are medical devices 

and must always be treated as such. 

The outbreak this year of fungal keratitis among some contact lens wearers 

underscores the fact that contact lenses are indeed prescription medical devices that can 

cause serious injury when improperly fitted, worn or cared for. The AOA was a leader in 

responding to this health situation, providing detailed and reliable information directly to 

our own members, consumers, Federal and state government officials, manufacturers and 

sellers, including 1-800 CONTACTS. 

Just last year, after reviewing cases in which consumers were harmed by the 

improper use of decorative, non-corrective contact lenses that were widely available 

online or at flea markets, Congress took decisive action. The passage of the “BoozmanBarton-Waxman” bill, now Public Law 109-96, provides for the regulation of all 

cosmetic contact lenses as medical devices by the Food and Drug Administration and 

requires that such lenses only be sold pursuant to a doctor’s examination and prescription, 

just like corrective contact lenses. 

Optometrists remain particularly proud of the leadership role played by our 

colleague and your colleague, Dr. John Boozman of Arkansas, in making this the priority 

issue it needed to be for legislation to be enacted and signed into law by the President. 

It is the very real potential for harm when contact lenses are worn improperly that 

makes the prescription verification safeguards the most important element of the FCLCA. 
70

We had, and continue to have, reservations about the verification process in the law, and I 

will offer my own experiences with it and suggestions for improvements to it later in my 

testimony. 

First though, I know that there has been much discussion of so-called “doctor only” 

lenses. I am aware that Senator Bennett and Congressman Terry have introduced 

legislation seeking to make changes to the FCLCA to govern how contact lenses may be 

marketed by their manufacturers. The FTC, under a directive included in the FCLCA, 

prepared and delivered a report to Congress last year on contact lens marketplace 

competition. With regard to so-called “doctor only lenses,” the FTC stated: 

“Our examination of these issues – exclusive relationships, private label lenses, 

and limited distribution lenses – suggests that such relationships are not 

prevalent in the market for contact lenses and are unlikely to limit competition 

and harm consumers. Exclusive relationships are rare; private label lenses 

while more common, still represent a small portion of all sales of soft contact 

lenses; and limited distribution policies are not widely used. Moreover, our 

inquiry showed that a common, limited distribution lens or its private label 

equivalent, was available from an overwhelming majority of outlets sampled. 

Given that the FCLCA permits sellers to fill prescriptions with equivalent 

national brand or private label lenses, consumers have a number of channels 

through which to obtain such lenses. In addition, these relationships may be 

an efficient way for manufacturers to provide beneficial incentives to their lens 

distributors, which in turn may lead to increased competition among various 

brands of lenses. In sum, the theory and the evidence examined do not support 

the conclusion that these distribution practices harm competition and 

consumers by allowing prescribers to lock in their patients to 

supracompetitively priced lenses.” 

The Strength of Competition in the Sale of Rx Contact Lenses: An FTC Study 

February 2005, Page 33 

I will expect to look to the FTC to provide any relevant updates to this finding. 

I would like now to return to the issue of prescription verification. Mr. Chairman, 

this is an area of the FCLCA that is breaking down and, as a result, patients are 

needlessly placed at risk. Over the last year, the AOA has received hundreds of FCLCA 

violation complaints about sellers, has evaluated them and, when necessary and 

appropriate, forwarded them to the FTC. The FTC has also received many direct 

complaints from doctors. 

However, it’s not only optometrists and ophthalmologists who are concerned about 

violations of the FCLCA: 

• Last October, after evaluating FCLCA complaints, the FTC issued a warning 

letter to 1-800 CONTACTS, the nation’s largest Internet seller. The FTC’s 

warning cited a “substantial number of complaints” and urged the company to 

“review the Contact Lens Rule and revise its practices as necessary to ensure 

that they comply with its requirements.” 

• In a press release issued last November, 1-800 CONTACTS charged that a 

competing online seller, Coastal Contacts, was engaged in activities 

“inconsistent with the prescription verification requirements of the FCLCA 

and...practices that misled consumers.” 

• In late June of this year, the FTC issued a series of 18 warning letters to sellers 

of cosmetic contact lenses for failure to comply with the FCLCA based on 

statements made on the sellers’ Web sites. 

• More recently, in August, the FTC imposed formal sanctions on Walsh Optical, 

an Internet contact lens seller. 
71

In light of this and new complaints about deficient verification practices, the AOA is 

urging a crackdown on unscrupulous contact lens sellers. In addition, we believe the time 

has come for some common-sense and pro-patient updates to the prescription verification 

safeguards included in the FCLCA. Here’s why: 

1. We are seeing contact lens orders being filled by sellers without any 

verification of the prescription by the prescribing optometrist. 

2. We are seeing contact lens prescriptions being overfilled, well beyond the time 

period the prescription in question is valid. 

3. We are seeing sellers use mechanisms like automated calling systems to verify 

prescriptions, which impose needless burdens on doctors who want to 

communicate important patient information to the seller. 

Some of my own experiences are very relevant to this discussion. Over the course 

of this year, I have tracked 18 contact lens orders placed with 1-800 CONTACTS. I am 

saddened to report that the first 17 orders were all filled by the company without any 

verification contact with my office, in apparent violation of the FCLCA. 

No contact through the telephone. 

No contact through the fax machine. 

No contact through an e-mail. 

A subsequent order – the 18th – did generate a combination live / automated 

telephone call request for a patient’s prescription to be verified. 

Since then I am aware of additional cases in which my patients received contact 

lenses though my office was not contacted with a verification request. 

These are not the results this committee intended when it crafted what were 

supposed to be prescription verification safeguards for patients in the FCLCA. I can’t 

imagine that anyone on this committee envisioned automated telephone calls would be 

the primary mechanism used by a seller to verify a prescription. I can’t imagine that 

anyone on this committee envisioned that a seller would undermine the law’s intention of 

encouraging patient-focused prescriber-dispenser communications. Unfortunately, that’s 

what’s happening. 

That’s why the AOA is encouraging Congress to examine the practices used by 

sellers and to take the following corrective actions: 

1. Allow eye care providers the opportunity to choose to receive verification 

requests from sellers through e-mails and faxes, rather than automated 

telephone calls. This would help facilitate the type of patient-focused 

communication that occurs between doctors and pharmacists. 

2. Ensure that all patient health considerations raised by an eye care provider are 

addressed by the seller before a contact lens order is filled. 

3. To increase the fines that could be imposed by the FTC on unscrupulous 

contact lens sellers that would violate the law and endanger patients. 

These proposals are embodied in legislation we expect to be introduced in Congress 

in the near future. Optometry and, I am pleased to report, ophthalmology, are in 

agreement about these proposals and about the need for patients to come first. 

Again, Mr. Chairman, let me emphasize that the AOA supported passage of the 

FCLCA in 2003 and continues to support it now. Our concern – then as now – is that the 

Internet and mail order contact lens sales industry must provide doctors with basic patient 

information, in an appropriate manner, so we may respond efficiently, and require that 

prescriptions be positively verified by the doctor before lenses are sold. This is the 

balanced and reasonable approach to the competition and health concerns that Congress 

intended and consumers now expect. 

Thank you for the opportunity to present this testimony. We hope you find our input 

useful and that we can work with you and the members of the subcommittee to move 

forward with legislation to strengthen prescription verification safeguards and crack 

down on the unscrupulous sellers who place profits ahead of patients. 
72

MR. STEARNS. I thank you. And I will be glad to allow the Ranking 

Member, Ms. Schakowsky, a few words here for a second. 

MS. SCHAKOWSKY. I just want to thank the witnesses very much for 

their testimony. 

As you heard Mr. Gonzalez say, some of us do have obligations at 

home. I am going to leave now and catch a flight, but I am glad that I 

stayed this morning to hear from all of you and look forward, through my 

office, to be in contact with each of you. Thank you. 

MR. STEARNS. I will start with my questions. 

Dr. Curtis, you heard Mr. Coon say that they spent 8 hours and 32 

minutes calling your office, 192 phone calls. They talked to Gail, Lori, 

Liz, and someone else. Is your objection that they are automated calls? 

Because in your opening statement you mention that there was a little bit 

of a complaint about these automated calls. So it seems to me that 1-800 

Contacts is calling you, and they are not getting the response they need. 

How do you answer Mr. Coon’s comment that he has called 192 phone 

calls over 8 hours and 32 minutes? 

DR. CURTIS. Sir, I have an automated phone system in my office 

also, and I have had it for 5 years. When you call my office, the 

automated system answers and says thank you for calling the office of 

Vision Source Arlington, and it starts into a menu that gives direction to 

the patient to contact the appointment desk. 

MR. STEARNS. Can you get ahold of an operator and talk with 

anybody? 

DR. CURTIS. Yes, you can, by--you are instructed to press a button 

to get ahold of whoever you wanted to, and at the end you are instructed 

to press 0 to talk to an operator. So I think that it goes through a timely--

and his machine is talking to my machine and nobody is talking to a 

human being. 

MR. STEARNS. Mr. Coon, is that true, it is basically two automated 

machines talking to each other? I mean, in your complaint here, I just 

want to give you a chance for the two of you to verify right here in a 

public forum about your complaints against each another. 

MR. COON. Yeah. Again, it is unfortunate that we are in this 

situation where we are competitors that, you know--we need to cooperate 

with each other, and the patient gets stuck in the middle. 

I want to be cautious not to say I think that Dr. Curtis simply falsely 

represented that he thinks that is the case. I think he actually believes 

that is true or he wouldn’t have put it in his written testimony. However, 

the facts don’t seem to support the allegation. And I would very much 

welcome any data or any evidence that Dr. Curtis has to the contrary. It 

is not uncommon for our competitors, the eye doctors, to make 

unsubstantiated claims. They did it in the litigation with the 32 States-- 
73

MR. STEARNS. Let me just interrupt you. Are your two machines 

talking to each other, yes or no? 

MR. COON. No, sir, they are not. 

MR. STEARNS. So Dr. Curtis, how is 1-800 Contacts supposed to 

fulfill their requirement if they can’t talk-- 

MR. COON. Sir, if I could, we use a live agent to make the phone 

call. We don’t hand off to an automated system until after a live person 

picks up at their office, which is why we know the names of the people 

we spoke with. 

MR. STEARNS. So the question is, can he fulfill his responsibility if 

he spends all of this amount of time--he can’t spend all this amount of 

time with one doctor. Don’t you think he has a legitimate complaint 

here, that he can’t seem to get through to notify you according to the 

procedures here? 

DR. CURTIS. I would have to say that I see it completely on the other 

side in the fact that I think I have a complaint that his automated system 

is unable to get ahold of me. 

I think he mentioned that there was 192 calls to my office. 

MR. COON. Yes, sir. 

DR. CURTIS. And I do know that there have been times that the 

operator has gotten through. And there have been times that a live 

person gets on the line, asks us to identify, is this the office of Dr. Wiley 

Curtis, and when we say yes, then they start the automated phone system, 

which we do follow. But I don’t think it happens every single time. 

MR. STEARNS. Dr. Schein, both you and Dr. Curtis seem to talk 

about ocular health and it is a national problem, and I think one of you, 

Dr. Curtis, somebody mentioned unscrupulous vendors and so forth. In 

the case you are talking about--I guess it was an after market provider, a 

refill that disinfection occurred. Dr. Schein, what vendor was it from? 

How did it occur? Was it from Wal-Mart, was it from 1-800 Contacts? 

Who was the person that--who did they buy their refill contacts from that 

created this disease that you talked about? 

DR. SCHEIN. I don’t know the name. I didn’t ask the name-- 

MR. STEARNS. But the point is that you go on about this ocular 

health and all these problems, but you have got to be specific because we 

can’t take what you are saying with credibility unless there are specifics 

behind it and you can say this is how it occurred on this date with this 

vendor. Because surely the patient would tell you who the vendor is. 

Because if you just, as a blanket, say there is an ocular health problem, 

that gives everybody a scare. But we would like to know specifically 

who is at fault. 

DR. SCHEIN. Right. 
74

MR. STEARNS. If you don’t want to say anything, but I am just 

telling you that you lose your credibility. In my case, if I don’t hear 

specifically who is at fault-- 

DR. SCHEIN. I think you are perhaps misinterpreting the context in 

which a patient is sent to you emergently with a potentially blinding 

condition. I am their physician. I am not even aware of an opportunity 

like today, and if I were, I wouldn’t impose that on a patient-doctor 

relationship. The issue is not-- 

MR. STEARNS. But you could say it is due to people getting refills 

from after market providers; is that what you are saying today? 

DR. SCHEIN. No. 

MR. STEARNS. So that could be done by the doctor himself because 

he prescribed it and the doctor created this problem himself and the 

patient created it. So it has nothing to do with after market providers is 

what I am getting at. 

DR. SCHEIN. Right. The point I am trying to make is that there is a 

link between patient compliance and patient visit to an eye care 

professional. So I am not at all sourcing the disease to a seller. 

MR. STEARNS. Okay. Let me ask of the Federal Trade Commission 

here, should these three major retailers begin marketing under exclusive 

doctors-only arrangements once the consent decree expires? Do you 

believe consumers could or might be harmed to the point where Federal 

action is appropriate and necessary? 

MS. OHLHAUSEN. First, just to clarify, what we found is that there 

weren’t actually doctors-only lenses, that wasn’t a major part of the 

market. We looked at limited distribution lenses, which means that the 

manufacturer makes a decision not to sell it to every seller. But what we 

found were limited distribution lenses were actually available through 

eye care practitioners and then other sellers that had a relationship with 

eye care practitioners, which would include Wal-Mart, Target, Costco, 

that typically would have a relationship-- 

MR. STEARNS. Well, my question is; do you think Federal objection 

is going to be necessary after this consent decree? That is what I need, 

yes or no. 

MS. OHLHAUSEN. We do not believe at this time that it would be 

necessary. Our examination of limited service-- 

MR. STEARNS. So your facts show that it is not necessary after this 

consent decree expires? 

MS. OHLHAUSEN. Right. 

MR. STEARNS. Is that the 1st of November? What is the date for that 

consent? 

MS. OHLHAUSEN. I believe that is right. 
75

MR. STEARNS. Okay. Let me just--before I ask one more question 

here, I want to give Mr. Fryling an opportunity. Well, I think my time 

has expired. We can go around to a second round. I will go to Mr. 

Gonzalez. 

MR. GONZALEZ. I am going to defer to Mr. Terry. 

MR. STEARNS. Sure, Mr. Terry, go ahead. 

MR. TERRY. I appreciate that, Mr. Gonzalez, and Mr. Chairman. 

Before I ask my question, I want to introduce my ophthalmologist, 

Steve Wolf, who is in the audience. And even though my boyish face 

may not be maturing, my eyes are right on in the maturation process, and 

I just got my no-line bifocals from him. And I will state that I bought 

them in his store, and that was my choice because, first of all, they offer 

a real quality service, hands on, and also, I am busy and didn’t want to 

drive around and shop around. 

But again, that was my choice. But thanks for being here today, 

Steve. 

Now, I have to admit on the issue of the limited distribution or 

doctor only, which is the impetus of at least starting this discussion, and 

it has certainly evolved into passive versus active verification, which I 

also think is a legitimate discussion to if the 1993 Act is, or the 2003 Act, 

I am sorry, the Burr bill is actually being complied with. But I am just 

focusing, for my question, on this limited prescription distribution. And 

I hear the testimony from the FTC and from Mr. Fryling, and that seems 

to be counterintuitive of what the advertising is. 

So reading the advertising, something is just not connected. Either 

Ocular Science is not being forthright with the doctors when they are 

saying that we are going to limit this distribution just to you, so you can 

get around 1-800 or whatever, on-line, but then, the testimony from the 

FTC today is it is still widely distributed throughout the community, 

including to the Wal-Marts and the Costcos and all of that. 

So I have got to work through who is right here. Is it widely 

available, or are you complying with what you are telling your doctors, 

that it is only going to be their office that can sell this in a community. 

Mr. Fryling, can you help me work through this apparent discrepancy? 

MR. FRYLING. I definitely will. I will help with you that. To get a 

little history of supervision is, during the last 4 or 5 years, we have 

bought two companies, Biocompatible, which is the Pro Vision ad, and 

let me quote Mr. Coon here, an ad for Proclear Lens entices the doctor 

with the headline, “let’s see, you will make more money.” That ad 

hasn’t run for over 3 years. That ad was a marketing literature for, that 

was developed by the company that we acquired, Biocompatible. We 

discontinued that advertisement a long time ago for the same reason that 

the FTC found. 
76

It wasn’t true. You are absolutely right. And the reason it is not 

true, and this goes back to what the FTC says, and let me quote on their 

findings, is that they found that the eye care practitioner, I am quoting off 

of one of the things, “caught taking advantage of the consumer sacrifices 

future revenue, not only from selling the replacement lenses to such 

patient, but also from eye examinations which produce almost twice the 

revenue of the contact lens sale in 2002.” Listening to what we have 

here, you have to understand the facts. On Proclear, currently, it is 

3 percent of the market. And I look at it, we have 14,000 accounts with-- 

MR. TERRY. I am sorry. I only have a minute and 20 left. Well, let 

me ask it more specifically and then I will let -- 

MR. FRYLING. Well, the other ad is also, we don’t run. 

MR. TERRY. Well, what I want to get to is, are these only being 

marketed to physicians today? If you go into it, I mean, here is The Wall 

Street article that says that they aren’t being sold at Wal-Marts or 

Costcos, and that is only September 5, so-- 

MR. FRYLING. Those articles, I mean Proclear, is sold at Wal-Mart. 

If anyone can get on the Internet right now, type in Wal-Mart, put the 

vision center, ask for the Proclear lens, you can buy it at Wal-Mart today. 

MR. TERRY. Okay. Mr. Coon. 

MR. COON. I think it is important that this committee does know the 

facts and I have with my CooperVision’s current distribution policy from 

December of 2005. I am going to read from it because he says they don’t 

run the ads anymore, but this is what their contract with doctors says. 

“Proclear, Proclear Toric, Proclear multi focal are authorized for resale 

only to patients under the direct care of the original purchaser and for the 

patient’s personal use. Trans shipment, sale, or redistribution by you to 

purchasers other than patients under your direct control would undermine 

this goal and is strictly prohibited.” This contract goes beyond even 

what the ad promises. This says a doctor can’t even fill a prescription 

written by another doctor. Even if he is authorized to sell Proclear, he 

would be violating their current contract if he did. 

MR. FRYLING. Can I respond to that? 

MR. TERRY. Sure. 

MR. FRYLING. That contract basically says to the eye care 

practitioner that they can not resell the product, the Proclear product, to 

an Internet type source. That contract does not restrict the doctor in any 

way to sell the lens to anybody, and that contract does not provide any of 

these restrictions. 

MR. TERRY. All right. But my point is in any physician’s office, 

you sell, as the manufacturer, have the right to sell to the physician. But 

in any community then, pick one out of thin air, you will also have 
77

distributed the same contact lenses to big box manufacturers as well, the 

same. 

MR. FRYLING. Pardon me? 

MR. TERRY. The same contacts that you are supplying to the 

physicians offices, pick any city randomly, we can go to the Wal-marts 

and Costcos and the Walgreens or whatever and find the same contact 

lens. 

MR. FRYLING. That is correct. And just going back to that 

agreement, that restriction doesn’t restrict us from selling this lens, and 

we do sell Proclear to all the retail outlets that were listed in my 

attachment. There are over 10,000 locations. We have mass 

merchandising, we have all the large locations there. So that product is 

readily available throughout the market. 

MR. TERRY. My time is up, Mr. Chairman, and perhaps we can-- 

MR. STEARNS. If the gentleman would yield-- 

MR. TERRY. I will. 

MR. STEARNS. Just another minute. I think you have got a very 

important point here. Mr. Coon has read your document and you are 

saying that document does not apply. 

MR. FRYLING. No. What I am referring to-- 

MR. STEARNS. Because you are telling your doctors you will have 

sole right to sell this and it will not be sold to anybody else. But you are 

just now telling Mr. Terry that you are going to sell them to all the places 

they market, and I don’t understand. 

MR. FRYLING. No, no. The document indicates to the practitioner 

he can not resell that lens, other than directly to a patient. We have the 

ability also to sell that lens to all of the other outlets as well. So what we 

are basically saying to the doctor, and this is a matter of product recall as 

well, is you can’t resell it to, let’s say, another, to an Internet company or 

to so some other group that we have basically indicated we do not want 

to provide that product to. 

MR. STEARNS. Well, let me just read, staff has given me, right from 

your document, from CooperVision, it says “products for sale over the 

Internet except to your patients whom you fitted and prescribed the 

lenses, and any reference to the products on any website you have 

maintained, you have or maintain, must state clearly that such products 

are available only to such patients. Except to your patients whom you 

fitted and prescribed is to sell or resell.” 

MR. FRYLING. Yeah. We are just telling him he can’t be a 

wholesaler. He can sell directly to his patients, but he can’t be a 

wholesaler. 

MR. STEARNS. Okay. Mr. Coon, do you want to answer anything to 

that? 
78

MR. COON. I am just dumbfounded that he is trying to make it sound 

like it isn’t more clear. It says, you will dispense products only to your 

patients under your direct control. It could not be any more clear. That 

is how the doctors read it. Everybody knows the policy. More 

importantly, they gave this list of all these places they sell to. Every 

single one of them has a doctor on-site. That wasn’t the issue when the 

32 States sued. The issue is being able to buy from a non doctor, being 

able to separate purchase from exam. Wal-Mart has doctors on-site. 

Target has doctors on-site. The AGs didn’t have to sue to get companies 

to sell to Wal-Mart. All the three major manufacturers were already 

selling to Wal-Mart. 

MR. STEARNS. You know, I am not making a judgment call here. I 

am just trying to understand. And Mr. Fryling, I mean, what I hear Mr. 

Coon say in his document, what the staff has given me, and what you are 

saying, I am having a little trouble. I am not saying you are right or 

wrong. I am just trying to understand. Could a doctor sell to other 

patients? 

MR. FRYLING. Yes, he can sell to other patients. What he cannot be 

is a wholesaler. That is what that agreement refers to. And Mr. Coon is 

correct in saying what that document basically says is he can’t be a 

wholesaler that would then resell it to the Internet outlets. 

MR. STEARNS. Okay. My time and Mr. Terry’s has expired. I 

appreciate it. Mr. Gonzalez. 

MR. GONZALEZ. Thank you very much, Mr. Chairman. I will start 

off with some general observations. If I have any questions, obviously 

they would be predicated on my understanding. A general observation is 

I really believe there is room for all of y’all out there. We really need to 

accommodate one another. If you ask Congress to fix the problem, you 

are going to be surprised because your fate and your destiny will be in 

other people’s hands. You really don’t want that. And we really need 

some direction and some guidance. And I think I understand the 

Chairman’s somewhat frustration of trying to get some answers to some 

very simple questions. 

In the life of the Internet, a million years ago, which is about 

10 years ago, Steve Case made the observation that the future of the 

Internet is not dependent on technology, but rather regulation. We are 

talking about regulation here. Steve Case wasn’t talking about the 

commercial setting that the Internet has created, but that is where we find 

ourselves today. And we, as Congress, and you, as physicians, doctors, 

manufacturers, distributors, can’t be behind the curve where the 

population, our constituency, and the consumer is going, and that is 

recognizing the role of the Internet, because we have had some of this 

problem previously but not to the degree that the different parties now 
79

feel that their vested interests may be jeopardized, and it is because of the 

Internet. 

But we better catch up, because your patient and your consumer is 

moving forward. And this is the way they conduct business. Congress 

even is asking the physicians to plug into the Internet age. We are 

talking about health information technology. We have bills that are 

pending now. Commerce probably feels the greatest impact of the 

Internet. And so the FTC recognizes that. FTC says we don’t have a 

problem that has risen to the level that creates it. But I have my State 

Attorney General, and I have the greatest respect for the State attorneys 

general, first of all, because I think they are in the forefront, and what 

they are saying is, do you have to be sick before you feel better? Does it 

have to reach that level before we can improve it? 

That is really a good point. But Congress should not act unless it 

really has to act. And we are being asked to act by the different sides. 

And the question here is this real curious one. No one is really 

questioning the adequacy of the prescribed product that eventually ends 

up in the consumer hands, because I heard Dr. Schein say, look, I am not 

trying to attribute blame for this malady, or whatever it was, or disease, 

on one particular manufacturer, so it is not the problem with the quality 

or adequacy of what is ending up in the consumers hands. Now, that’s 

the first question I am going to pose to each of you. Is there any question 

here, any fear that we should have, that the end product, the end 

prescribed product that ends up in the consumers hands is something that 

we should worry about because of some of the practices that are at issue 

here. That is going to be the first question. And I don’t think that it is. 

My second observation, and it is a curious one, and I have to be 

totally blunt and honest with you. And that is what other situations do 

we have where the gatekeeper, being the optometrist or the 

ophthalmologist, really determines whether the consumer is going to 

receive a certain product through a specific channel? And that is really 

an interesting one and presents some real problems. 

And I think distributors should be free to promote whatever product 

that they distribute in any relationship, making exclusive, giving it the 

gold standard seal of approval or whatever, I like that. That is being a 

great entrepreneur, and I don’t think we should interfere with that. There 

is nothing wrong that. And if it doesn’t rise to the level where there is 

some sort of competitiveness that is being infringed and such and there is 

no safety or health safety concern, then what are we doing here today? 

And it all comes down to verification. 

And can we come up with a system that will allow the marketplace 

to proceed with something that is essential and that is verification, Mr. 

Coon, because I think you understand your obligation to make sure it is a 
80

legitimate prescription, it has an expiration date, and there are dangers 

associated with prescribing something that if it wasn’t being supervised 

by the physician, the optometrist, we would have some serious problems. 

And yet verification really lies there at the very feet of the prescriber. 

And I mean, we have got to figure out a way. 

So we are talking about legislation. Let’s not just do it with 

automated phone calls. Let’s do fax and e-mails. I don’t think that there 

is going to be a problem with that, to be honest with you. So that is my 

second question. The second question goes, is the best practices relating 

to verification. How do we get there? 

First question to everyone, do we have a problem with the end 

products adequacy in meeting the patient’s needs as a result of Internet 

sales? 

And the second question, of course, comes down to best practices 

when it comes to verification, because we have had an example here 

where we have differences of opinion between Mr. Coon and Dr. Curtis 

in a real-life setting, so we can imagine how this thing gets replicated 

every day. 

So I have used up most of my time with my general observations, but 

you know my questions and I am going to ask the Chairman to indulge 

me some additional time on those two questions. And we will just go 

down the list. 

MS. OHLHAUSEN. On your first question, we have not seen a 

problem with the product. It seems that it is being delivered to people, 

that it is widely available to them at competitive prices, and we haven’t 

seen health consequences arising from that. 

Secondly, the best practices for verification. When the law and the 

rule were adopted, there was a shake-out period, definitely, and the FTC 

did receive complaints from both sellers and prescribers about not being 

able to communicate with each other well. We have found that those 

complaints have receded. There still may be, from time to time, 

complaints, but the volume of them has gone down. And we engaged in 

quite a bit of consumer and business education to help smooth over this 

transition period. 

MR. KLEIN. Mr. Chairman, Representative Gonzalez, number one, 

on your first question, as part of the attorney general’s litigation and 

settlement with the contact lens industry, one of the pledges we made to 

them was that we will do our best as attorneys general to investigate and 

prosecute people who are engaging in violations and failing to verify. 

And we invited them to send us the complaints, and we pledged that we 

will investigate and validate those complaints, and if they have valid 

complaints we will take action. We are not getting those complaints and 

have not had any actions that were justified. 
81

On your second point, you talked about gatekeeper. And I think the 

gatekeeper role is something that is being lost in some of this discussion. 

I am loathe to criticize another enforcement agency. But I think the 

economists of the FTC doing the study missed a crucial point, and that is 

that yes, in a competitive market, there are great advantages to 

consumers to having the ability, having, letting a manufacturer require a 

vendor to provide full services. This is not, however, a competitive 

market. We, in fact, have a gatekeeper who says you can only buy this 

particular product, and I will tell you the brand name, and you can only 

buy it with written permission from me. And when you have a 

gatekeeper, such as the optometrist, who tells you what you need, when 

you need it, and told you the brand, then we do not have a competitive 

market and we need, then, to create a better balance to restore some 

power to the consumers. Thank you. 

MS. OHLHAUSEN. Could I respond? 

MR. STEARNS. Yes. 

MS. OHLHAUSEN. I just wanted to mention that we did examine in 

our report, because we are certainly aware of the possibility that a 

gatekeeper could perform this kind of function, and we looked at it to see 

if consumers were locked in to purchasing lenses at a higher price or less 

availability. And the evidence that we examined, the pricing evidence, 

the availability evidence, didn’t support the idea that competition wasn’t 

a sufficient check on this ability of the gatekeeper. 

So it is not that we didn’t know that this could be a problem. We 

examined it, and we just found that the evidence didn’t suggest that the 

gatekeeper was able to reduce competition in this way. 

MR. COON. Thank you, sir. If I might go out of order. If I could, 

would you mind if I responded to the FTC’s remarks since she jumped 

in? 

I think no one argues with the FTC’s position that offering a retailer 

a financial incentive or exclusivity to promote a product is fine. Paul 

Mitchell doesn’t sell their shampoo to grocery stores, right? The FTC, in 

its study, looked at markets like beer, fragrance, apparel, electronics. 

There is no problem there because you don’t get a prescription for 

shampoo. I mean, if you can’t find it at the hair stylist and you are in the 

grocery store, you just buy a different shampoo. There is a huge 

difference here that seems to be lost to the FTC. When a manufacturer 

offers a financial incentive to a doctor to prescribe a product, the FTC 

sees no difference between a market in which somebody has no 

prescription and a market in which they do. And it is best evidenced by 

the fact that Ms. Ohlhausen has represented that even if 100 percent of 

the market were to go to doctors-only lenses, the FTC would still see no 

reason for action. 
82

The first issue I want to address to your two questions, health and the 

best practice, on the health, both the FTC and the attorneys general are 

actually in agreement on something. They both agreed that better access 

to and lower prices for contacts will encourage people to replace their 

lenses more frequently, which benefits their ocular health. We actually 

have data on that. The average, according to the major manufacturers, is 

28 lenses per year. Customers who order from us average 40 lenses per 

year. So when their lenses are easier to obtain they do, in fact, throw 

them away more frequently. 

On the second point, I think it is an easy answer. What is the best 

system? I think we all agree here, it is positive verification. But it is 

positive verification like the drug industry. Both of these doctors, at the 

end of the table, if they prescribe you a drug, they are not allowed to sell 

it to you. But if they prescribe you contact lenses they can. And one of 

the doctors said earlier, that regulation like has been proposed by 

Congressman Terry is unprecedented in health care. What is 

unprecedented in health care is doctors selling what they prescribe. And 

what is unprecedented is manufacturers explicitly in their ads offering 

doctors money to write prescriptions for them. If we want a positive 

verification system, it needs to work like drugs. Doctors need to stop 

selling what they prescribe. And we would strongly support that. 

MR. FRYLING. Thank you very much. I would like to give you some 

facts rather than some emotional comments based on what we have. 

Proclear, which is one of the products that they refer to as a financial 

incentive, which I am not sure what you are referring to at that point. 

MR. COON. You will make more money. 

MR. FRYLING. Okay. Make more money. If that was the case, you 

would think that the market share of Proclear, with the limited 

distribution, would be greater in the U.S. than France. France is a market 

where the ophthalmologist writes the scrip, and it is filled separately, 

independently by a retailer. Proclear has a much greater market share in 

France than it does in the U.S., it is around 7 to 8 percent. By the way, in 

France, with that separation, the cost of the product to the consumer is 

higher than it is here in the United States. So let’s make sure we 

understand the consequences of some of these things that emotionally we 

are throwing out. 

Number two, Proclear is sold in 14,000 accounts we sell Proclear to. 

The average sale is about $2,000 of wholesale. The average sale that a 

practice sells is about $40,000. So that is 5 percent of their practice. If 

this is motivated for profit or incentive, you would see a greater 

percentage of Proclear in that market than anywhere else. If you 

understand the market, I really encourage you, both of you that have your 

own practice, you will find that the material profit in contact lenses is a 
83

very small amount for the O.D. He wouldn’t risk his reputation to create 

an artificially high price point that would then not only risk his fitting 

fees, he also has the potential if they buy glasses, they buy everything 

else. This just doesn’t happen. 

That is why the FTC hasn’t found a difference in a price point 

between these products. And as I have indicated to you before, we 

reached that same conclusion when we bought these companies, and that 

is why we no longer put those kinds of ads. The only thing we do, or we 

are trying to do with Proclear is that is a unique product that was 

approved, has a claim for dry eyes, which is one of the main reasons for 

patients dropping out. And with dry eye, it is very complicated, and we 

wanted those patients to be followed up with the practitioner. Sometimes 

if that condition continues, they can use punctal plugs. There are other 

things that can help with that condition. That is the main focus on trying 

to keep those, that product, and only that product, with an eye care 

practitioner. We want to maintain a reputation of our product. All of the 

other products are sold. We are in discussion with 1-800 right now, and I 

agree with you 100 percent. I would much rather let the private market 

decide how we can get distribution into the Internet. 

MR. GONZALEZ. I appreciate that, Mr. Fryling. The problem is that 

the Chairman has given me actually 10 minutes more than I deserved. 

And I need to hear from the doctors because it still comes down to 

verification. At the end of the day, we would like our consumers, of 

course, to be well served. But they are patients and we want them to get 

to the doctors on a regular basis. And I think that was Dr. Schein’s 

concern. And I would like to hear his, one, about adequacy of the 

product, but the other thing too is about verification, which obviously 

dovetails into the regular visits and such. 

DR. SCHEIN. To address your first question first, there is nothing 

fundamentally different about the product based on the origin of sale. 

And, in fact, risk with contact lenses is associated with how the device is 

used and cared for. So whether it is worn, for example, overnight, versus 

daily only or whether it is the contact lens case adequately cleaned and 

replaced, those kind of things determine risk, not the inherent device 

itself. 

I think that I am in agreement with Mr. Coon, that the aim should be 

a positive verification system that works for sellers and practitioners. 

That should be the goal. That should be the purpose of meetings to draft 

new legislation. I cannot believe that that is an impossible issue. I have 

not personally devoted my time to this, but with our communications 

abilities today and the use of the Internet, I cannot believe that that 

cannot be done. 

MR. STEARNS. Dr. Curtis. 
84

DR. CURTIS. To specifically respond to your question about the 

Internet and verification, in my particular situation, I purchased a phone 

answering system 5 years ago and it seemed to be a relatively high tech 

endeavor at the time. And now, using automated phone systems seem to 

be relatively low tech. And my office does many things regularly on 

e-mail, including communicate with patients. And I would love to see a 

verification system where I received an e-mail requesting the contact lens 

prescription and be able to respond to that in a very timely, it would be 

very easy for our office to respond to those types of situations very easily 

and quickly. 

MR. GONZALEZ. Thank you very much. And thank you, Mr. 

Chairman, for your indulgence. 

MR. STEARNS. I appreciate any time when you give, ask questions, 

because I think, like myself, we are just trying to understand this better, 

and I appreciate also your observation that sometimes be careful what 

you ask for when you come to these committees. Having seen what turns 

out to be a pretty good bill, and then it gets amended, and pretty soon no 

one likes the bill and everybody’s trying to stop it after spending so 

much time trying to pass it. 

But I am going to conclude, and I am going to go, Ms. Ohlhausen, 

just to revisit here. You had indicated that the FTC did not find doctor 

only or limited distribution lenses are prevalent. But isn’t this because of 

the three major manufacturers, Johnson & Johnson, CIBA Vision, and 

Bausch & Lomb, are prevented by the consent decree which expires in 

6 weeks from entering into exclusive contracts, isn’t that the reason why 

we don’t see that? 

MS. OHLHAUSEN. That certainly may be a reason why. We made no 

conclusions. 

MR. STEARNS. So you are saying if we didn’t have the consent 

decree, we didn’t need this consent decree, is that what you are telling 

me? 

MS. OHLHAUSEN. No. What I am saying is we didn’t make any 

conclusions in the report as to why the incidence of exclusive 

distribution lenses was at a certain level. We just examined the market 

as it existed when we did the study. 

MR. STEARNS. But, if the consent decree is not extended, what, do 

you think that these folks behavior will change at all? 

MS. OHLHAUSEN. Um -- 

MR. STEARNS. I mean you must have some opinion. You had a 

study on it and you are involved with the consent decree. I mean it 

seems likes at some point-- 

MS. OHLHAUSEN. Excuse me. The FTC is not involved with the 

consent decree. 
85

MR. STEARNS. I understand that. But you were involved with the 

study of it. 

MS. OHLHAUSEN. We were involved with the study that Congress 

directed us to do. 

MR. STEARNS. And what is your observation? Do you think the 

consent decree should extend or not? 

MS. OHLHAUSEN. The FTC doesn’t have an opinion about extending 

it except that -- 

MR. STEARNS. Okay. I appreciate that. That is probably true. 

Mr. Klein, what do you think? 

MR. KLEIN. We are very much worried about it. We are hoping, as 

a result of the consent decree, that consumers would see greater price 

savings; in addition, that the manufacturers would realize how much 

better off they were by selling these lenses, because if what Mr. Coon 

said is true, that consumers are replacing their lenses more frequently 

through cheaper sources, that will result in the manufacturers selling 

more lenses. The more lenses they sell, the more profit they make. 

But, the concern remains paramount about the gatekeeper function. 

And a rough analogy is, if a city requires a building inspector, health 

inspector to come to your home, the health inspector comes to your home 

and says your refrigerator needs to be changed because it doesn’t have 

the latest filter or the antibacterial lining, and so you have to change your 

refrigerator. And I am writing you a prescription that you have to buy 

this particular refrigerator and this brand-- 

MR. STEARNS. I understand. But I am just trying to get this and I 

am going to go right through the panel. The evidence that you have, 

your experience of your boss and yourself, who couldn’t make it here, 

that once this consent decree expires 6 weeks from now, do you think 

these three manufacturers will cut distribution ties with aftercare retailers 

such as 1-800 Contact? I mean, just give me your straight up or down 

here. 

MR. KLEIN. Yes, because it grows its share of the other companies 

they have an incentive to do that. 

MR. STEARNS. Okay. Mr. Coon, obviously your feeling is yes. 

MR. COON. I don’t think they want to start doing it again. I think 

they have moved on, but I don’t think they will have a choice. 

MR. STEARNS. Do you think there is an economic incentive to do 

this for them? 

MR. COON. It is an incredible shortcut. I mean, if you have got a 

doctor who sells what they prescribe, you can just offer the doctor money 

to write a prescription for your product, which is exactly what these ads 

offer to do. 
86

MR. STEARNS. But, you know, you are being a little idealistic if you 

think when you said the statement, doctors should stop being able to sell 

what they prescribe. I mean, the doctors today, they don’t prescribe and 

sell the medicines, but they sure have a lot of incentive to sell some 

medicines over others. And you and I both know that. And those 

incentives come in through lots of different ways that doctors are 

influenced. 

And Mr. Klein, you know that too. So in a free market, lots of things 

happen. Just like here in Congress, how legislation, I mean, this is a free 

and open society where ideas come up, but lots of things happen between 

the cup and the lip. So, you know, your feeling is you need this consent 

decree extended, right? 

MR. COON. To be clear, I think if doctors didn’t sell what they 

prescribed, which is why I mentioned that, this market wouldn’t need 

any regulation. 

MR. STEARNS. Well, we are not going get to legislation passed 

between now and the first of November. That is the bottom line. Unless 

leadership somehow, after this hearing, decides there is a real need. But 

I have seen the plate here. It is full. And there are a lot more higher 

priority issues than this issue. So I guess the question is, knowing that 

this legislation might not pass--this is just a hearing. We haven’t even 

marked up out of my subcommittee. It has got to go to the full 

committee. It has got to go to the House, it has got to go to the Senate. 

There has got to be a conference. Would you want a consent decree 

extended? 

MR. COON. There is no question. And to be clear, if the doctors are 

unwilling to not also sell what they prescribe-- 

MR. STEARNS. So you are not willing to call for an extension of the 

consent decree. 

MR. COON. We think it absolutely ought to be extended, and we 

think the current system can work the way it is. The doctor just needs to 

compete for the sale, which is what this law would do. 

MR. STEARNS. Okay. Mr. Fryling, what is your feeling about the 

consent degree? 

MR. FRYLING. Well, I do think you should ask the other 

manufacturers or follow up. 

MR. STEARNS. Well, I am just asking for your point. 

MR. FRYLING. We have had discussions, and we have agreed that 

we would provide lenses to 1-800 regardless. We are not under the 

consent decree at this point. 

MR. STEARNS. That is right. 

MR. FRYLING. What the FTC did was not under that. 
87

MR. STEARNS. So we don’t have Johnson & Johnson, CIBA Vision, 

or Bausch & Lomb so we can ask them. But Dr. Schein, what do you 

think. 

DR. SCHEIN. I have no opinion. 

MR. STEARNS. Okay. That is fine. Dr. Curtis. 

DR. CURTIS. I would be shocked if any contact lens company 

changed the way they were doing business. 

MR. STEARNS. So with or without the consent decree, that business 

will continue as it is, and once it expires, Bausch & Lomb and CIBA 

Vision and Johnson & Johnson won’t change their behavior. They will 

not go about trying to cut distribution ties with after care retailers such as 

1-800 contact. You think that is true. 

DR. CURTIS. I am way out of bounds speaking for them, but I can’t, 

as a client of theirs or a customer of theirs, I cannot imagine that they 

would change the way they are doing business today. 

MR. FRYLING. Mr. Chairman, could I just give you a reason why I 

think that all the manufacturers will continue? There is a real concern in 

the gray market associated with counterfeit lenses. We want these 

Internet suppliers to get product that we know is our product and not 

potential counterfeit lenses, so there is a real desire for us to go forward. 

And so I would be very surprised, I am not speaking for all the 

manufacturers, that they would not continue with providing product to 

the Internet source. 

MR. STEARNS. Well, thank you all of for your testimony. I am glad 

we had the hearing. I will just conclude in touching upon what Mr. 

Gonzalez has said. Sometimes having these hearings is enough to tell all 

participants, hey, you had better just be careful what you ask for, as he 

pointed out, because the Federal legislation, you have 435 members with 

ideas of their own, and a piece of legislation gets an amendment on the 

subcommittee and the full committee and the House and sometimes you 

don’t even know what you are going to get. 

So it would be well for all of you to somehow work together, as Mr. 

Gonzalez pointed out, and not have the Federal government step up and 

do anything here. And perhaps Mr. Coon, this hearing alone will say to 

these other distributors that, hey, the consent decree is over the first of 

November, but we better watch how everybody plays this game, because 

you might not like what happens. So with that, the subcommittee is 

adjourned. 

[Whereupon, at 11:07 a.m., the subcommittee was adjourned.] 
88

STATEMENT SUBMITTED FOR THE RECORD BY CIBA VISION

CIBA Vision, the eye care unit of Novartis and a global leader in the research, 

development, and manufacturing of contact lenses and lens care products, welcomes the 

opportunity to submit this statement for the record in the Subcommittee’s hearing on the 

topic “Contact Lens Sales: Is Market Regulation the Prescription?” CIBA Vision is 

deeply committed to the eye health and safety of contact lens wearers. For this reason, 

the company supported enactment of the Fairness to Contact Lens Consumers Act 

(“FCLCA”) (Public Law No. 108-164) and was a strong advocate for the “BoozmanBarton-Waxman” plano lens legislation, now Public Law No. 109-96, which mandates 

that the Food and Drug Administration regulate all contact lenses as medical devices and 

requires that such lenses be sold only pursuant to an eye care professional’s examination 

and prescription. It is CIBA Vision’s abiding concern for eye health and safety that 

compels the submission of this statement. 

CIBA Vision understands that one of the purposes of today’s hearing is to examine 

the need for, and the impact on consumers and the marketplace of H.R. 5762, the 

proposed Contact Lens Consumer Protection Act. This legislation would require contact 

lens manufacturers to “make any contact lens the manufacturer produces, markets, 

distributes, or sells available in a commercially reasonable and nondiscriminatory manner 

to—(1) prescribers; (2) entities associated with prescribers; and (3) alternative channels 

of distribution.” For the purposes of the proposal, “alternative channels of distribution” 

mean “any mail order company, Internet retailer, pharmacy, buying club, department 

store, or mass merchandise outlet, without regard to whether the entity is associated with 

a prescriber, unless the entity is a competitor....” 

As an initial matter, CIBA Vision queries whether there is a need for legislation 

such as H.R. 5762. The FCLCA (Section 10) directed the Federal Trade Commission 

(“FTC”) to “undertake a study to examine the strength of competition in the sale of 

prescription contact lenses.” The statute specifies that the study must evaluate several 

issues, including, inter alia: the “incidence of exclusive relationships between prescribers 

or sellers and contact lens manufacturers and the impact of such relationships on 

competition”; the “difference between online and offline sellers of contact lenses, 

including price, access, and availability”; and the “incidence, if any, of contact lens 

prescriptions that specify brand name or custom labeled contact lenses, the reasons for 

the incidence, and the effect on consumers and competition.” The FTC issued its report, 

The Strength of Competition in the Sale of Rx Contact Lenses: An FTC Study, in 

February 2005. After a careful analysis, the FTC concluded: 

Our examination of these issues – exclusive relationships, private label lenses, and 

limited distribution lenses—suggests that such relationships are not prevalent in 

the market for contact lenses and are unlikely to limit competition and harm 

consumers. Exclusive relationships are rare; private label lenses, while more 

common, still represent a small portion of all sales of soft contact lenses; and 

limited distribution policies are not widely used. Moreover, our inquiry showed 

that a common, limited distribution lens, or its private label equivalent, was 

available from the overwhelming majority of outlets sampled. Given that the 

FCLCA permits sellers to fill prescriptions with equivalent national brand or 

private label lenses, consumers have a number of channels through which to 

obtain such lenses. 

* * * 

In sum, the theory and the evidence examined do not support the conclusion that 

these distribution practices harm competition and consumers by allowing 

prescribers to lock in their patients to supracompetitive priced lenses. The 

Strength of Competition in the Sale of Rx Contact Lenses: An FTC Study

(February 2005) at 33. 
89

This study, which Congress specifically requested, demonstrates beyond cavil that 

legislation such as H.R. 5762, which would replace vibrant market competition with 

government regulation, is wholly unnecessary. 

However, in CIBA Vision’s view, there is a serious defect in current law which 

Congress should remedy expeditiously—the “passive” or “default” prescription 

verification provisions of the FCLCA. CIBA Vision concurs with the conclusions of the 

American Optometric Association and the American Academy of Ophthalmology that 

passive verification of contact lens prescriptions is not working in all cases, with all 

sellers, and as a result, the eye health and safety of patients are at serious risk. 

 Section 4 of the FCLCA provides that a “seller may sell contact lenses only in 

accordance with a contact lens prescription for the patient that is—(1) presented to the 

seller by the patient or prescriber directly or by facsimile; or (2) verified by direct 

communication.” Pursuant to the statute, a “prescription is verified...only if one of the 

following occurs: (1) The prescriber confirms the prescription is accurate by direct 

communication with the seller. (2) The prescriber informs the seller that the prescription 

is inaccurate and provides the accurate prescription. (3) The prescriber fails to 

communicate with the seller within 8 business hours, or a similar time as defined by the 

Federal Trade Commission, after receiving from the seller the information described in 

subsection (c).” Subsection (c) provides that when seeking verification of a contact lens 

prescription, a seller must provide the prescriber with specific information including the 

patient’s name and address; contact lens power, manufacturer, base curve or appropriate 

designation, and diameter when appropriate; quantity of lenses ordered; the date of the 

patient request; the date and time of the verification request; and the name of the contact 

person at the seller’s company including telephone and facsimile numbers. “Direct 

communication” includes “communication by telephone, facsimile, or electronic mail.” 

 The FTC implemented the FCLCA through the Contact Lens Rule which was 

promulgated in July 2004. (16 C.F.R. Part 315). In addition, the FTC has issued two 

relevant guidances-- FTC Facts for Business—The Contact Lens Rule: A guide for 

Prescribers and Sellers (October 2004) and Q&A: The Contact Lens Rule and the 

Eyeglass Rule (October 2004). The FCLCA and the FTC’s regulation and guidances all 

make it clear that a seller may conclude that a prescription is valid if eight hours have 

elapsed since a verification request was lodged with the prescriber and no response from 

the prescriber was forthcoming. As a result, a seller may dispense a prescription contact 

lens without ever having had any confirmation that the request was received or that the 

prescription is valid, accurate, and not expired. CIBA Vision respectfully submits that 

such passive or default verification is simply not acceptable. 

 The law is clear that all contact lenses are regulated as medical devices by the FDA 

and that they may only be sold pursuant to an eye care professional’s examination and a 

valid prescription. Such regulation is manifestly justified by the fact that contact lenses 

may cause serious injury if not properly manufactured, distributed, fitted, worn, and cared 

for. The existence of a valid prescription is an indispensable component of the regulatory 

schemata to protect the eye health and safety of contact lens wearers. The gravamen of 

the defect in the FCLCA’s passive verification provision is that it grievously denigrates 

the integrity of the prescription requirement and creates a gaping portal for abusive 

conduct. 

 CIBA Vision is aware of numerous instances of conduct designed to subvert or 

circumvent the verification provisions of the FCLCA. Consider the following: 

• Some sellers are ignoring the verification requirement altogether and selling 

contact lenses without any effort to secure verification from the prescriber. 

• Certain sellers make it extremely difficult, if not impossible, to be contacted by 

the prescriber within the 8-hour window and then, having heard nothing from 

the prescriber, proceed to sell the lenses. 
90

• Contact lenses are being dispensed by some vendors even though the 

prescription has expired and is no longer valid. 

• Some sellers use automated calling systems to verify prescriptions making it 

extremely difficult for a prescriber to convey critical information about the 

patient or the prescription. 

• Prescriptions are being overfilled, sometimes with an unlimited supply of 

product, especially immediately preceding the prescription expiration date. 

• Unlike pharmaceuticals, because a contact lens prescription is not surrendered 

when it is filled, patients are able to order from multiple sellers and limitless 

supplies of contact lenses. 

• Lenses are being ordered using false eye care professionals’ names and contact 

information. 

• Patients are listing eye care professionals they have never seen as the source of 

the prescription and without an active verification requirement, some sellers fill 

the order. 

• Certain sellers have developed recurring “computer problems” which prevent 

communications from prescribers. Claiming that they received no 

communication from the prescriber within the 8 hours, the seller fills the order. 

• TV commercials, websites, and magazine and newspaper advertisements imply 

that prescriptions are not necessary and that orders can be filled on some other 

basis—e.g. taking information from an empty contact lens box. 

 

 We believe these abuses, and others, have emerged as a direct result of the passive 

verification provisions in the FCLCA. There is no limit to the ingenuity of unscrupulous 

sellers who are intent on ignoring or circumventing the weak default prescription 

verification process called for by current law. The potential ramifications to consumer 

eye health and safety must be considered if passive verification remains the statutory 

standard. 

 A safer and more effective prescription verification system should contain at least 

the following elements: (1) providers who write contact lens prescriptions should be 

permitted to require that verification requests from sellers must be submitted by e-mail or 

facsimile rather than through automated telephone systems; (2) a requirement that the 

seller satisfactorily resolve all patient eye health care considerations raised by the 

prescriber before filling the prescription and selling the contact lens; and (3) increased 

penalties and fines for violations of the active prescription verification requirements. 

As Congress considers legislation affecting the contact lens market, it should eschew 

efforts to reconfigure the competitive structure of the industry. Instead, it should accede 

to the compelling demands of consumer eye health and safety by eliminating the passive 

verification system and mandating a system which requires active verification of contact 

lens prescriptions. 

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