1

This letter expresses the views of the FTC’s Office of Policy Planning, Bureau of

Consumer Protection and Bureau of Economics. The letter does not necessarily represent the

views of the Commission or of any individual Commissioner. The Commission has, however,

voted to authorize us to submit these comments.

2

HB 2286 amended Arkansas Code §§ 17-90-108; 17-90-109; 17-90-110. For purposes

of this letter, we will refer to these amendments as HB 2286, even though the bill has been

enacted into law. Your letter indicates that the Arkansas Legislature passed HB 2286 in the

spring of 2003.

3

15 U.S.C. §§ 7601-7610. 

4

The Board of Optometry has informed us that it has not published an official draft

regulation because it has been waiting for the Commission to issue the final Contact Lens Rule. 

Therefore, we would welcome another invitation to comment on such a regulation when it is

finalized.

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580

Office of Policy Planning

Bureau of Consumer Protection

Bureau of Economics 

October 4, 2004

The Honorable Doug Matayo

State of Arkansas

House of Representatives

3110 Magnolia Place

Springdale, Arkansas 72762-7416 

Re: Arkansas HB 2286

Dear Representative Matayo: 

The staff of the Federal Trade Commission’s Office of Policy Planning, Bureau of

Consumer Protection, and Bureau of Economics1

 are pleased to respond to your letter of June 23,

2004, asking us to comment on Arkansas HB 2286 (“HB 2286”)2 and the implementing draft

regulation proposed by the Arkansas Board of Optometry (the “Board”). Your letter indicates

that HB 2286 was enacted before the passage of the Fairness to Contact Lens Consumers Act

(the “Act”)3 and issuance of the Contact Lens Rule (“Contact Lens Rule”). You indicate that

you are now conducting a review of HB 2286 in light of the passage of the Act and issuance of

the Contact Lens Rule. Specifically, you asked us for assistance in determining the consistency

of HB 2286 and the Board’s draft regulation with federal law and their possible impacts on

public health and consumers. We are pleased to provide such assistance with respect to HB

2286.4 In brief, we conclude that portions of Arkansas HB 2286 appear to be preempted in
5

16 C.F.R. Part 456. 

6

69 Fed. Reg. 40481 (July 2, 2004) (to be codified at 16 C.F.R. Part 315). The

Commission’s press release regarding the issuance of the final Contact Lens Rule, including a

link to the text of the Federal Register Notice, is available at

http://www.ftc/gov/opa/2004/06/contactlens.htm.

2

certain circumstances because they conflict with federal law. In addition, under the Board’s

interpretation of HB 2286, it appears that contact lenses can be legally sold to Arkansas residents

only by Arkansas licensed optometrists and ophthalmologists. Thus, it appears that mail order,

Internet, and other alternative providers must be licensed in Arkansas to provide contact lenses

to Arkansas residents. Such an arrangement likely results in higher prices and reduced consumer

choice, without substantially increasing health protections.

This letter briefly summarizes the Commission’s interest and experience in the eye care

industry and provides the staff’s opinion regarding the consistency of HB 2286 with federal law

and the possible impact of HB 2286 on consumers and competition. The Commission has been

active in the eye care industry for almost thirty years. It enforces the Ophthalmic Practices Rules

(“Eyeglass Rule”)5

 and recently issued the Contact Lens Rule6 as required by the Fairness to

Contact Lens Consumers Act. As described in detail below, the agency has also recently issued

a number of advocacy filings and reports regarding the contact lens market. 

Based on our experience in the contact lens industry and our review of your letter and HB

2286, the FTC staff has reached the following conclusions: 

• HB 2286 requires that contact lens prescriptions be released to the patient “upon

request” and “upon payment.” The “upon request” and “upon payment”

restrictions on prescription release appear to be preempted because they conflict

with the automatic prescription release standard imposed by the Act.

• HB 2286 contains an “active” verification requirement that appears to be 

preempted by the “passive” verification standard imposed by the Act and the

Contact Lens Rule. 

• It appears that mail order, Internet, and other alternative providers must be

licensed in Arkansas to provide contact lenses to Arkansas residents. Although

state licensing is not expressly covered by the Act or the Contact Lens Rule, such

a requirement likely results in higher prices and reduced consumer choice. In

turn, such effects may increase the incidence of health problems that are

associated with contact lens use, such as the over-wearing of disposable lenses. 

Less restrictive alternatives to licensing, such as registration alone, may

adequately protect consumers.

A brief summary of the Commission’s history in the eye care industry and a detailed

analysis in support of each of the FTC staff’s conclusions is provided below. 
7

16 C.F.R. Part 456. 

8

69 Fed. Reg. 40481 (July 2, 2004) (to be codified at 16 C.F.R. Part 315). 

9

FTC Staff Comment Before the Connecticut Board of Examiners for Opticians (Mar. 27,

2002), available at http://www.ftc/gov/be/v020007.htm.

10Connecticut Board of Examiners for Opticians, In re: Petition for Declaratory Ruling

Concerning Sales of Contact Lenses, Declaratory Ruling Memorandum of Decision 

(June 24, 2003). 

1167 Fed. Reg. 48472 (2002). The workshop’s transcript is available at

http://www.ftc.gov/opp/ecommerce/anticompetitive/021008antitrans.pdf. All of the panelists’

written statements are available at

http://www.ftc/gov/opp/ecommerce/anticompetitive/agenda.htm.

3

I. Interest and Experience of the Federal Trade Commission

As noted above, the Commission has been active in the eye care industry for nearly three

decades. It enforces the Eyeglass Rule, which requires an optometrist or ophthalmologist to

provide a patient, at no extra cost, a copy of the patient’s eyeglass prescription after completion

of an eye exam.7

 The Commission also recently issued the Contact Lens Rule, which requires a

prescriber to provide the patient a copy of the contact lens prescription upon the completion of a

contact lens fitting.8 The Contact Lens Rule also allows contact lenses to be sold if sellers obtain

a copy of the consumer’s prescription or verify the prescription with the prescriber. 

In March 2002, the Commission staff filed a comment before the Connecticut Board of

Examiners for Opticians in a declaratory ruling proceeding on the interpretation and applicability

of various statutes and regulations concerning the sale of contact lenses.9

 The comment

addressed whether Connecticut state law requires that out-of-state sellers obtain a license to sell

contact lenses to the state's residents. In that comment, Commission staff concluded that out-ofstate sellers should not be subject to state licensing requirements because the possible benefit to

consumers from increased state protection did not outweigh the likely negative effect from

decreased competition. Ultimately, the Connecticut Board of Examiners decided that state law

did not require out-of-state sellers to obtain a license to sell contact lenses to consumers.10

In October 2002, the Commission held a public workshop entitled Possible

Anticompetitive Efforts to Restrict Competition on the Internet to evaluate possible efforts to

restrict competition in contact lenses and other industries.11 Commission staff heard testimony

about the contact lens issue from many perspectives, including eye care practitioners, a major

contact lens manufacturer, an online seller, traditional bricks and mortar lens sellers, and an

economics professor with expertise in occupational licensing issues. In March 2004, the
12Possible Barriers to E-Commerce: Contact Lenses: A Report from the Staff of the

Federal Trade Commission (Mar. 29, 2004), available at

http://www.ftc.gov/os/2004/03/040329clreportfinal.pdf.

1369 Fed. Reg. at 40505, citing Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 121 S. Ct.

2404, 2414 (2001); Crosby v. National Foreign Trade Council, 530 U.S. 363, 372-73 (2000);

English v. General Elec. Co., 496 U.S. 72, 78-79 (1990).

1469 Fed. Reg. at 40505, quoting Freightliner Corp. v. Myrick, 514 U.S. 280, 287 (1995);

Hines v. Davidowitz, 312 U.S. 52, 67 (1941).

15Id.

16Id. at 40506.

4

Commission staff issued a report, Possible Barriers to E-Commerce: Contact Lenses: A Report

from the Staff of the Federal Trade Commission (“Contact Lens Report”).12 

II. Federal Preemption 

The Commission’s Statement of Basis and Purpose (the “SBP”) for the Contact Lens

Rule addresses the issue of preemption. The SBP points out generally that a federal law may

preempt state law through implied preemption where state and federal law actually conflict.13

The SBP notes that a conflict may arise where state law “stand[s] as an obstacle to the

accomplishment and execution of the full purposes and objectives of Congress.”14 The SBP

further states that “[t]he Act does not expressly state that it preempts any state laws. The

language of the Act, however, appears to be inconsistent with the language of some state laws.”15

Ultimately, the SBP concludes that “the Act preempts any State laws or regulations that restrict

prescription release or require active verification, because they would undermine Congress’s

purpose of giving consumers greater freedom of choice in their choice of sellers from whom they

purchase their contact lenses.”16

 

The Commission staff believes that the prescription release restrictions and the “active”

verification standard contained in HB 2286 conflict with the language of the Act and would

undermine the purpose that Congress intended to achieve: providing consumers with greater

choice with respect to sellers of contact lenses. Consequently, such more restrictive and

burdensome state laws and regulations conflict with the federal law and are therefore preempted. 

These issues are addressed more fully below. 
1769 Fed. Reg. at 40506.

18In addition, Section 3 of the Act requires that “presentation of proof of insurance

coverage for the service” be deemed a payment. 15 U.S.C. § 7602. HB 2286 does not expressly

address the relationship between proof of insurance coverage and payment. 

1915 U.S.C. § 7601(a)(1).

2015 U.S.C. § 7602.

5

A. Prescription Release Restrictions

The Commission has concluded that the Act preempts state laws or regulations restricting

prescription release.17 Accordingly, Section 315.11 of the Contact Lens Rule provides that state

laws and regulations “that restrict prescription release . . . are preempted.” HB 2286 contains

two restrictions on prescription release that appear to conflict with the Act and the Contact Lens

Rule.18 

First, Section 1(a)(2)(A) of HB 2286 requires prescription release to occur “upon request

of the patient” at the completion of the fitting. However, Section 2(a)(1) of the Act requires

prescription release to occur at the completion of the contact lens fitting “whether or not the

patient requests it.”19 The “upon request” release standard set out in HB 2286 thus appears to be

preempted because it conflicts with the automatic release standard imposed by the Act. 

Second, Section 1(a)(2)(A) of HB 2286 requires release of the contact lens prescription

“upon payment being made for the examination and the fitting.” In contrast, Section 3 of the

Act20 allows a prescriber to require payment prior to the release of the contact lens prescription

“only if the prescriber” also “requires immediate payment in the case of an examination that

reveals no need for contact lenses or other ophthalmic goods.” Because HB 2286 allows a

prescriber to require payment prior to prescription release for contact lens patients even if the

prescriber does not require immediate payment from patients whose exams reveal no need for

ophthalmic goods, it conflicts with the Act and the Contact Lens Rule in certain circumstances. 

To the extent that HB 2286 conflicts with the Act and the Rule, it is preempted.

B. Positive Verification Systems

 The Commission also has concluded that certain state laws regarding positive

verification requirements appear to inhibit the accomplishment of the objectives of the Act. In

particular, the SBP explains that the Act preempts state laws or regulations that “require active

verification, because they would undermine Congress’s purpose of giving consumers greater
2169 Fed. Reg. at 40505, noting that legislative history supports the same conclusion:

“The Committee believes that any state law with an active or positive contact lens prescription

verification system would stand as an obstacle to the accomplishment of the full purposes and

objectives of this Act. Practically, it would be impossible to comply with the terms of this Act

and an active verification scheme. Therefore, it is the intent of the Committee that the passive

verification system in section 4(d) preempt any conflicting state laws that use active or positive

contact lens prescription verification systems.” H. Rep. No. 108-318, at 9-10 (2003). 

As prescribed by the Act, the Contact Lens Rule imposes requirements on sellers in

connection with prescription verification: “the seller shall provide a reasonable opportunity for

the prescriber to communication with the seller concerning the verification request” and a seller

shall maintain a record of all direct communications. 16 C.F.R. § 315.5 (c)(3), (f). When

seeking verification of a contact lens prescription, a seller shall also provide the prescriber with

certain required information as set forth in the Contact Lens Rule. Id. at § 315.5 (b).

22Existing Arkansas law specifies that “[t]he practice of optometry shall include but not

be limited to: the prescribing and sale of eyeglasses and contact lenses. . . .” Ark. Code 17-90-

101.

23Contact Lens Report at 3.

6

freedom in their choice of sellers from whom they purchase their contact lenses.”21 Accordingly,

the Commission added Section 315.11 to the Contact Lens Rule to clarify that state laws and

regulations that “require active verification are preempted.” Consequently, the active

verification standard imposed by Section 1(a)(2)(B) of HB 2286, which requires out-of-state

sellers to possess a “positively verified” prescription, appears to be preempted because it

conflicts with the Act and the Contact Lens Rule.

III. State Registration and Licensing Issues

Section 2 of HB 2286 includes provisions for the registration of mail order, Internet, and

other alternative providers of contact lenses to Arkansas residents. Your letter of June 23, 2004

indicates that the Board interprets existing law to mean that contact lenses can be legally sold to

Arkansas residents only by Arkansas licensed optometrists and ophthalmologists.22 Thus, it

appears that mail order, Internet, and other alternative providers must be licensed in Arkansas to

provide contact lenses to Arkansas residents.

The Contact Lens Report considered the benefits and costs associated with licensing and

concluded that “although there are significant health issues concerning the use and sale of

contact lenses, requiring a professional license to sell replacement contact lenses over the

Internet is likely to raise prices and/or reduce convenience to consumers without substantially

increasing health protections.”23 Accordingly, FTC staff recommended that policymakers and

other officials “[r]escind, or refrain from adopting, requirements that an Internet seller have a
24Id. at 31.

25See id. at 8. See, e.g., FDA Center for Devices and Radiological Health, Buying

Contact Lenses on the Internet, by Phone, or by Mail: Questions and Answers (2002), available

at http://www.fda.gov/cdrh/consumer/buycontactqa.html. Disposable contact lenses prevent

oxygen from reaching the cornea, and lack of oxygen can lead to severe eye damage. Therefore,

to lower their health risks, it is important that a patient adhere to the doctor’s recommended

wearing schedule, removing and replacing the lenses when recommended. 

26Contact Lens Report at 9.

27See 21 U.S.C. §§ 331(a), 333, 352(f), and 353(b)(1). 

28For example, comments submitted to the FTC’s E-commerce workshop argued that it

was difficult for state boards to reach out-of-state sellers. See Summary of Testimony of J. Pat

7

professional license to sell replacement contact lenses. If states want to regulate such sellers

beyond prescription requirements and general state and federal consumer protection laws, they

should adopt a simple registration requirement.”24 

An examination of the benefits and costs of licensing identified by the Contact Lens

Report is helpful in evaluating the impact of Arkansas’s licensing requirement on public health

and consumers. The possible benefits include additional protections to consumer health and

welfare. The costs include possible price increases, as well as reductions in convenience, which

may also affect consumers’ health. 

The Contact Lens Report recognizes that the use and sale of contact lenses involves

significant health issues. The primary health concern with contact lenses appears to be ensuring

that contact lens wearers visit their doctors regularly for eye examinations.25 Consumers may

thus endanger the health of their eyes if they obtain and wear replacement contact lenses without

a valid prescription.26

Federal law currently requires that contact lenses only be sold to patients with valid

prescriptions, which they receive after an eye examination. First, the Fairness to Contact Lens

Consumers Act and the FTC’s Contact Lens Rule prohibit sales of contact lenses unless the

seller has a copy of the patient’s prescription or has verified that prescription with the prescriber. 

Second, the Food and Drug Administration has strict labeling requirements for contact lenses,

and it has the authority to take action against the sales of such a device without a valid

prescription.27

Some have argued that a potential benefit of requiring a state professional license for

contact lens sellers is that the license may give the state additional leverage over out-of-state

sellers.28 If a seller fails to comply with prescription requirements, for example, then the state
Cummings, Jr., O.D., President, American Optometric Ass’n; Summary of the Position of the

National Ass’n of Optometrists and Opticians, available at 

http://www.ftc.gov/os/2004/03/040329clreportfinal.pdf.

29Contact Lens Report at 22. The Report did note that “[i]n comments submitted to the

workshop, [the American Optometric Association] stated that sales of contact lens without a

valid prescription were frequent, and [the National Association of Optometrists and Opticians]

stated it was difficult for state boards to reach out-of-state sellers who sold without a

prescription.” Id. at 22, n.85. Nonetheless, staff concluded in the Contact Lens Report that

concerns about quality of care issues can be addressed by enforcing contact lens prescription

requirements. Id. at 23.

30Id. at 6, 16-17, 21. The Contact Lens Report did state, however, that “[w]orkshop

participants did not provide, and FTC staff does not know of, a study that directly assesses the

impact of optical licensing on costs or prices of contact lenses in general or replacement lenses in

particular.” Id. at 16. While staff does not know of such a study, the report noted that “the idea

that licensing requirements create additional costs for consumers is hardly novel or unique to

replacement lenses” and referred to comments by Professor Kleiner on the potential impact

licensing may have on costs. Id.

31See id. at 21.

32See id.

33See id. at 23.

8

could prompt compliance by threatening to revoke the seller’s license. The Act, which provides

for federal enforcement of its requirement that contact lenses be sold pursuant to a valid

prescription, obviates much of the concern about the difficulty of reaching out-of-state sellers.29

Although state licensing requirements can provide health and safety benefits, it is also

important to examine the costs that a licensing requirement may impose on consumers. The

Contact Lens Report found that requiring a professional license to sell replacement contact

lenses over the Internet is likely to raise prices and/or reduce consumer choice.30 In particular,

the need to employ a state-licensed professional, such as an optometrist, an ophthalmologist or a

dispensing optician, would likely be a costly proposition for an Internet or mail-order seller of

replacement lenses.31 Because such firms may not sell eyeglasses or conduct contact lens

fittings, they may not already have a state-licensed professional on staff.32 Because the Board’s

interpretation of Arkansas Code § 17-90-101 almost certainly imposes additional costs on standalone sellers of replacement lenses, however, requiring a state-licensed professional would likely

induce such sellers to charge higher prices to consumers or – alternatively – to exit sales entirely,

thereby harming consumers.33

There seems to be consensus that disposable lenses, especially when worn properly,
34See Report of Douglas F. Greer on Behalf of the Thirty-One Plaintiff States, filed in In

re: Disposable Contact Lens Antitrust Litigation, No. MDL 1030 at 134-35 (complaints filed

M.D. Fla. 1994) (citing studies); Contact Lens Report at 19.

35Id. at 135-36. See also Contact Lens Report at 19.

36For example, one survey has found that fewer than 50 percent of consumers comply

with the recommended wearing schedule. McKinsey & Company, Consumer Fact Pack, filed in

In re: Disposable Contact Antitrust Litigation, at 92. The same survey found that fifty-seven

percent of consumers stated they would replace their lenses more frequently if the lenses cost

less. Id. at 97. Thirty percent specifically identified cost savings as the reason they over-wear

their lenses, stating they “try to save money by wearing [their] contact lenses for more days than

[their] doctor recommends before disposing of them.” Id. Twenty-two percent said they do not

replace their lenses as often as they should because “purchasing them is inconvenient.” See also

Contact Lens Report at 19-20.

37See Contact Lens Report at 19.

9

generally promote better eye health than do conventional daily wear lenses.34 Doctors have

reported that frequent replacement of lenses has yielded a significant decrease in eye infections

and inflammation among their patients who wear disposables.35 However, it appears that while

many consumers over-wear their disposable lenses, thus diminishing their health benefits, they

might replace their lenses more frequently if the lenses cost less.36

Thus, to the extent that licensing raises the cost or inconvenience of obtaining disposable

replacement lenses, it may induce more individuals to over-wear their replacement contact lenses

or exacerbate the practice by persons already doing so. Thus, licensing may increase the

incidence of health problems associated with contact lens use.37 In particular, to the extent that

contact lens wearers choose to over-wear disposable contact lenses in response to a price

increase, as a way to save money, they increase the risk of severe eye damage.

The key question, then, is whether there are incremental benefits to consumers from an

additional, more restrictive regulation such as state licensing that outweigh its accompanying

consumer costs. In this instance, it appears that the costs of such state licensing outweigh any

possible benefits. The costs of a licensing requirement would be concentrated on customers who

prefer stand-alone sellers of replacement lenses to other types of sellers. But such a requirement

would not substantially increase the health protections already provided by existing law. 

The Contact Lens Report recommends that if a state finds it necessary to regulate

replacement lens sellers beyond already existing prescription requirements and general consumer

protection laws, it should consider a simple registration requirement, which could provide

additional consumer safeguards but would be less restrictive or burdensome than a state
38See id. at 20-23. For example, the Contact Lens Report notes that “California requires a

non-resident contact lens seller to be authorized in its home state, to maintain records of lenses

sold in California, and to provide a toll-free number where patients can ask questions or make

complaints and a toll-free number or e-mail address where eye care practitioners can confirm

their prescriptions.” Id. at 21.

10

licensing requirement.38 Specifically, a registration system, unlike licensing, would not require

that individuals or firms that want to sell replacement lenses fulfill expensive and unnecessary

requirements in order to do so. Rather, replacement lens sellers would merely file their names

and other required information in Arkansas and would have sufficient contact information in the

event that a particular seller engages in practices that create health risks for consumers.

IV. Conclusion

For these reasons, FTC staff believes that Arkansas HB 2286's release “upon request of

the patient”and release “upon payment” requirements appear to be preempted in certain

circumstances because they conflict with the Fairness to Contact Lens Consumer Act and the

Contact Lens Rule. The active verification requirement also appears to be preempted because it

conflicts with the Act and the Rule. In addition, the FTC staff recommends that if Arkansas

finds it necessary to regulate replacement lens sellers beyond already existing regulations, it

should consider a simple registration requirement instead of licensing.

Respectfully submitted,

__________________________________
11

Maureen K. Ohlhausen, Acting Director

Christopher M. Grengs, Attorney Advisor

Office of Policy Planning

__________________________________

Lydia B. Parnes, Acting Director

Thomas B. Pahl, Assistant Director, Division of Advertising Practices

Char Pagar, Attorney

Bureau of Consumer Protection

_______________________________

Luke M. Froeb, Director

Joseph Mulholland, Economist

Bureau of Economics