Health-Care Cronies Seek Monopoly Powers Over Contact Lenses by Beth Johnson, Mises Institute
Once upon a time, contact lens manufacturer Johnson & Johnson was on top of the world in terms of its market dominance. Today, it still produces nearly 40 percent of the world’s contact lenses, but this is nothing compared to the company’s heyday, when it enjoyed numerous government-granted monopoly powers over the contact-lens market.
Unfortunately for the nation’s 41 million contact lens users, the good old days of exploiting contact lens customers via government regulations might be coming back if the new Contact Lens Consumer Health Protection Act is passed into law. This legislation will strip consumers of their right to choose in an effort to further the financial interests of the billion-dollar medical lobby.
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Conservatives Open the Contact Lens Market
Before 2003, eye doctors had a virtual monopoly over the sale of contacts. They were not obligated to give patients a copy of their prescriptions, so they could more or less control where consumers purchased their lenses. This normally meant consumers could obtain contacts only directly from eye doctors at higher prices. It was a win-win for the medical lobby. Manufacturers like Johnson & Johnson made more money off the lenses, while doctors’ offices profited greatly from the inflated retail costs.
All was well and good for eye doctors’ favored lens manufacturers, but then Congress changed its mind. Recognizing that the market was stifled, Congress passed legislation to restore greater market competition to the industry. Their bill, The Fairness in Contact Lens Consumers Act (FCLCA), leveled the playing field by enforcing consumer rights. It required that doctors provide prescriptions on demand so that consumers could shop anywhere they wanted for contacts. Gone were the days that doctors could delay third-party sales for indefinite amounts of time — they now had just an 8-hour window to ask questions or express concerns in order to stop prospective sales.
As a result of these free market reforms, a whole new secreted industry sprouted up. Retail stores like Walmart, as well as a wide array of online sellers, entered the market. The slaying of the medical lobby’s monopoly caused prices for contacts to drop immediately. Now, over 41 million Americans can afford to purchase more than $7 billion worth of contact lenses every year from optometrists, retail stores, and online sellers.
Johnson & Johnson’s Plan to Re-Monopolize the Industry
While FCLCA was a great deal for American families, it didn’t fit the desires of crony lens manufacturers like Johnson & Johnson, which wanted to continue controlling the market through the force of government. In recent months, the company has conspired with the American Optometric Association (AOA) to push these new retail and online vendors out of the market.
Representatives from Johnson & Johnson helped draft The Contact Lens Consumer Health Protection Act (CLCHPA), a new Senate bill which will reverse Congress’s free market reforms by restoring optometrists’ monopoly over the eye industry.
CLCHPA will require that all contact lens sellers provide methods of communications like fax numbers and landline numbers — points of contact which many online vendors don’t have. Even worse is that doctors will regain their indefinite approval cushion for third-party orders. This means that eye doctors will essentially be permitted to block the sale of lenses from any vendors they don’t like — by refusing to ever give a yes or no answer on transactions, they will be pocket-vetoing the processing orders.
Health Concerns Debunked
The crony groups like Johnson & Johnson and the American Academy of Ophthalmology that pushed for the bill claim that this bill was introduced in the name of consumer safety. They allege that keratitis, an inflammation of the cornea, occurs more from online orders.
Of course, none of the empirical or academic data matches up with their assertions. These groups are ignoring the fact that all contact lens consumers — regardless of whether they buy from the doctor’s office or online — still need to provide up-to-date prescriptions to receive lenses.
In a letter written to the CLCHPA’s authors, Dr. Paul B. Donzis, a professor of ophthalmology at UCLA, made this point abundantly clear. “Based on … authoritative scientific articles, it appears that online sales of contact lenses have not contributed to any increase in the incidence of contact lens related [injury],” he said.
Moreover, a prominent 20-year epidemiologic study of contact lens related-keratitis published in 2007 by the medical journal Eye & Contact Lens found that there has been no increase in the incidence of microbial keratitis since the advent of online sales.
Congress Must Stop the CLCHPA
What really poses the risk of keratitis is not third party vendors, but the ignorant advocates of this bill, who are indirectly encouraging the extended use of contact lenses.
The number one cause of keratitis is consumers’ failure to replace contacts as scheduled. Well, what do you think will happen if Johnson & Johnson’s Contact Lens Consumer Health Protection Act goes into effect? As the preferred contact lens vendors’ market dominance is restored and the price of contacts rises to pre-2003 levels, consumers will start replacing their contacts less and less frequently in order to cut costs. It’s human nature, and it will happen.
Beth Johnson is an economics student and freelance political journalist based out of Washington, D.C.
Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.