| WASHINGTON, July 30
WASHINGTON, July 30 An executive at 1-800
CONTACTS told Congress on Wednesday that decisions by three of
the four top U.S. contact lens makers to set price minimums for
some products would push up the prices of the medical devices.
Alcon, owned by Novartis AG ; Bausch & Lomb, owned
by Valeant Pharmaceuticals ; and Johnson & Johnson
all put in place minimum sale prices for some of their
products in the past 14 months.
"They (consumers) will see higher prices. They will lose
their ability to shop around," said Joe Zeidner, general counsel
at 1-800 CONTACTS in a hearing of the Senate Judiciary
Committee's antitrust panel.
Senator Amy Klobuchar, chair of the subcommittee, said she
was concerned about the effect of the actions on the more than
35 million Americans who wear contacts.
"This does raise legitimate questions about what these
policies do to competition," she said.
While the minimums prevent discounting, Millicent Knight, an
official at Johnson & Johnson, argued that her company's prices
would be lower for most people who buy their ACUVUE lenses.
"By institution a UPP (uniform prices), lowering our prices
and making the process by which we make those prices available,
we believe we can better compete in the contact lens market,"
she told lawmakers.
Setting a price floor, thus shutting off the possibility of
discounting, was illegal until 2007, when the Supreme Court said
it was acceptable in some situations.
Alcon set a minimum price for some contacts on June 1, 2013,
a Novartis spokeswoman said in an email. Bausch & Lomb followed,
and Johnson & Johnson is in the process of implementing a
J&J is the top U.S. contact lens maker with 47.1 percent of
the market, followed by Cooper Companies with 21.4 percent,
Alcon at 20 percent and Bausch & Lomb at 9.8 percent, according
to Euromonitor International, a market intelligence company.
Novartis said it implemented the policy to combat
"showrooming" - the practice of having optometrists learn about
their products then educating customers, only to have the
patient go to an online discounter to buy the lenses for a lower
An estimated 10 percent of contact lenses were sold online,
Euromonitor said in a blog post dated in December.
(Reporting by Diane Bartz)