Contact Lens Class Action Lawsuits Alleges Manufacturers, Distributor Fixed Prices
At least two class action lawsuits have been filed against several major contact lens manufacturers, accusing the companies of engaging in a conspiracy to illegally control contact lens prices.
The antitrust lawsuits accuse Bausch & Lomb, Inc., Johnson & Johnson, Vision Care, Inc. Coopervision, Inc., Alcon Laboratories, Inc. and Abb Optical Group of creating an illegal “price floor policy” that prevents retailers from selling contact lenses below a certain price.
The class actions claim that the companies, which control 97% of the contact lens market, have threatened retailers that they will cease to supply them with lenses if they sell below their price floor policy (PFP).
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One of the complaints (PDF) was filed by Clemente Cesare in the U.S. District Court for the Southern District of Florida on March 9, and the other (PDF) was filed by Benjamin W. Hewitt, Gabrielle Pavelko, and John Weissman in the Northern District of California on March 12. Both seek class action status.
The four largest contact lens manufacturers and the leading distributor, ABB, are accused of engaging in a conspiracy that violates antitrust laws through the use of the PFP.
“The PFPs set a minimum price below which no reseller can advertise or sell a particular line of Contact lenses. Although retailers may offer discounts pursuant to the PFPs, the price of lenses after any such discount must not fall below the established price floor,” the lawsuits claim. “If retailers violate a PFP by advertising or selling Contact Lenses below the set price floor, Defendants have cautioned that they ‘will cease to supply’ the retailer with those lenses.”
According to the complaints, the PFP was initiated in June 2013, eliminating benefits consumers saw from price competition among contact lens retailers. The lawsuits claim this is stifling price competition between independent eye care professional retailers and discount retailers such as Wal-Mart, Costco and 1-800 CONTACTS.
“Since Defendants coordinated an industry shift to PFPs, prices for Contact Lenses have increased dramatically,” one of the claims notes. “For example, the price increases in some of J&J’s lines of Contact Lenses range from approximately 75 to nearly 200%. J&J estimated that its PFPs would impact roughly 9.66 million Contact Lens wearers, approximately 69% of J&J Contact Lens consumers.”
According to the complaints, an estimated 39 million Americans wear contact lenses, spending about $4.2 billion on lenses annually.
The complaints claim that the conspiracy was coordinated by the distributor, ABB, and that it has resulted in numerous complaints to the Federal Trade Commission by consumers as well as other companies. The lawsuit notes that some reports indicate that government antitrust enforcement agencies are now investigating the matter.
Plaintiffs indicate that there can be no other purpose for the PFP besides price-fixing and notes that this is not the first time the companies have faced charges of antitrust violations.
In 1996, 32 states and consumers filed lawsuits against several of the same companies, including Johnson & Johnson, Bausch & Lomb, and Alcon’s predecessor CIBA Vision. The lawsuits charged the companies with conspiracy to cut alternative suppliers out of the disposable contact lens industry.
The companies eventually settled, with Bausch & Lomb paying $8 million and Johnson & Johnson paying $25 million. Both companies also agreed to distribute millions in benefits and that they would sell their contact lenses through alternative distribution chains on a non-discriminatory basis.
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SherronMarch 11, 2016 at 4:03 pm
Been wearing contact lenses for 30 years
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