    [Senate Hearing 113-893]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 113-893

                        PRICING POLICIES AND COMPETITION
                         IN THE CONTACT LENS INDUSTRY:
                         IS WHAT YOU SEE WHAT YOU GET?

    =======================================================================

                                    HEARING

                                   before the

                           SUBCOMMITTEE ON ANTITRUST,
                     COMPETITION POLICY AND CONSUMER RIGHTS

                                     of the

                           COMMITTEE ON THE JUDICIARY
                              UNITED STATES SENATE

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 JULY 30, 2014

                                   __________

                              Serial No. J-113-72

                                   __________

             Printed for the use of the Committee on the Judiciary

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                           U.S. GOVERNMENT PUBLISHING OFFICE

     28-425 PDF                    WASHINGTON : 2018

                           COMMITTEE ON THE JUDICIARY

                      PATRICK J. LEAHY, Vermont, Chairman
    DIANNE FEINSTEIN, California         CHUCK GRASSLEY, Iowa, Ranking
    CHUCK SCHUMER, New York                  Member
    DICK DURBIN, Illinois                ORRIN G. HATCH, Utah
    SHELDON WHITEHOUSE, Rhode Island     JEFF SESSIONS, Alabama
    AMY KLOBUCHAR, Minnesota             LINDSEY GRAHAM, South Carolina
    AL FRANKEN, Minnesota                JOHN CORNYN, Texas
    CHRISTOPHER A. COONS, Delaware       MICHAEL S. LEE, Utah
    RICHARD BLUMENTHAL, Connecticut      TED CRUZ, Texas
    MAZIE HIRONO, Hawaii                 JEFF FLAKE, Arizona
               Kristine Lucius, Chief Counsel and Staff Director
            Kolan Davis, Republican Chief Counsel and Staff Director
                                     ------

       Subcommittee on Antitrust, Competition Policy and Consumer Rights

                       AMY KLOBUCHAR, Minnesota, Chairman
    CHUCK SCHUMER, New York              MICHAEL S. LEE, Utah, Ranking
    AL FRANKEN, Minnesota                    Member
    CHRISTOPHER A. COONS, Delaware       LINDSEY GRAHAM, South Carolina
    RICHARD BLUMENTHAL, Connecticut      CHUCK GRASSLEY, Iowa
                                         JEFF FLAKE, Arizona
                   Caroline Holland, Democratic Chief Counsel
                    Bryson Bachman, Republican Chief Counsel

                                C O N T E N T S

                                  ----------

                            JULY 30, 2014, 2:16 P.M.

                        STATEMENTS OF COMMITTEE MEMBERS

                                                                       Page

    Klobuchar, Hon. Amy, a U.S. Senator from the State of Minnesota..     1
    Lee, Hon. Michael S., a U.S. Senator from the State of Utah......     3

                                   WITNESSES

    Witness List.....................................................    29
    Cockrell, David A., O.D., President, American Optometric
      Association, Stillwater, Oklahoma..............................     8
        prepared statement...........................................    50
    Knight, Millicent L., O.D., Head of Professional Affairs, Johnson
      & Johnson Vision Care, North America, Jacksonville, Florida....     7
        prepared statement...........................................    45
    Slover, George, Senior Policy Counsel, Consumers Union,
      Washington, DC.................................................    10
        prepared statement...........................................    60
    Zeidner, R. Joe, General Counsel, 1-800 CONTACTS, Inc., Draper,
      Utah...........................................................     5
        prepared statement...........................................    30

                                   QUESTIONS

    Questions submitted to David A. Cockrell, O.D., by Senator
      Klobuchar......................................................    67
    Questions submitted to Millicent L. Knight, O.D., by Senator
      Klobuchar......................................................    68
    Questions submitted to George Slover by Senator Klobuchar........    69
    Questions submitted to R. Joe Zeidner by Senator Klobuchar.......    70

                                    ANSWERS

    Responses of David A. Cockrell, O.D., to questions submitted by
      Senator Klobuchar..............................................    71
    Responses of Millicent L. Knight, O.D., to questions submitted by
      Senator Klobuchar..............................................    72
    Responses of George Slover to questions submitted by Senator
      Klobuchar......................................................    74
    [Note: At the time of printing, after several attempts to obtain
      responses to the written questions, the Committee had not
      received responses from R. Joe Zeidner.]

                    MISCELLANEOUS SUBMISSIONS FOR THE RECORD

    Alcon Laboratories, Inc., Fort Worth, Texas, statement...........    89
    Zeidner, R. Joe, General Counsel, 1-800 CONTACTS, Inc., Draper,
      Utah, follow-up statement......................................    76

                        PRICING POLICIES AND COMPETITION

                         IN THE CONTACT LENS INDUSTRY:

                         IS WHAT YOU SEE WHAT YOU GET?

                                  ----------

                            WEDNESDAY, JULY 30, 2014

                          United States Senate,
          Subcommittee on Antitrust, Competition Policy
                                   and Consumer Rights,
                                    Committee on the Judiciary,
                                                        Washington, DC.
        The Subcommittee met, pursuant to notice, at 2:16 p.m., in
    Room SD-226, Dirksen Senate Office Building, Hon. Amy
    Klobuchar, Chairman of the Subcommittee, presiding.
        Present: Senators Klobuchar and Lee.

                OPENING STATEMENT OF HON. AMY KLOBUCHAR,
               A U.S. SENATOR FROM THE STATE OF MINNESOTA

        Chairman Klobuchar. I call the hearing to order and thank
    our witnesses for being here on an afternoon in Washington, DC.
        More than 35 million Americans use contact lenses to
    correct their vision. Contact lenses are an essential part of
    our daily lives--even though I have not worn mine since the day
    I got married, Senator Lee. But they are a very big part of
    many--luckily I am still married. They are an essential part of
    many people's daily lives and can cost hundreds of dollars per
    year.
        Senator Lee and I are having this hearing to examine recent
    pricing policies initiated by contact lens manufacturers that
    would affect retail price competition for contact lenses. The
    policies boil down to this: A manufacturer tells retailers that
    if they want to sell a particular contact lens, then they
    cannot sell them below a set price set by the manufacturer. If
    a retailer sets the lenses for below that price, then the
    supply of that particular contact lens would be cutoff.
        This means that retailers, whether they are independent
    optometrists, national chain retailers like Lenscrafters or
    Pearle Vision, a big box store like Costco or Walmart or
    Target, or an online retailer like 1-800 CONTACTS or Vision
    Direct, cannot discount those contact lenses that are subject
    to this agreement below a certain price.
        For consumers, this can mean no coupons, no rebates, no
    bundled discounts, or any other specials that could lower the
    price to below what the manufacturer has set.
        This does raise legitimate questions about what the
    policies will do to competition and what kind of prices
    consumers will be paying because of these policies. Are they
    lower or are they higher? What is the effect?
        We can all agree that manufacturers generally have the
    right to decide which retailers they want to sell their
    products to. A nearly 100-year-old Supreme Court case, U.S. v.
    Colgate, confirms that they are free to make those decisions
    based on retailers' adherence to a suggested retail price.
    Today we will hear a variety of views on the justification for
    those policies and if those policies are good.
        We also know that contact lenses are not typical retail
    products like computers or televisions or laundry detergents
    where consumers drive all of the choices. They can decide which
    product or which brand to purchase. Sometimes consumers have a
    prescription for a specific brand or model of a contact lens
    that is made by their eye professional. Eye care professionals
    also typically sell the contact lenses that they prescribe,
    creating the potential for a conflict of interest.
        In addition, there may be limits on which specific contact
    lenses a consumer can wear and significant costs required to
    switch contact lenses in response to pricing changes.
        After spending time and money on fitting, it may turn out
    that there is no other lens that would address a particular
    consumer's health needs, so this is a market where retail
    competition may be the only competition in the market.
        In this discussion, we need to also consider competition at
    other points of the distribution chain, but the fact is that
    the contact lenses market is relatively concentrated. Three
    companies--Johnson & Johnson Vision Care, and thank you for
    being here, Cooper Vision, and Alcon--make up about 90 percent
    of the market, and adding in Bausch & Lomb brings the total
    close to 100 percent.
        So we need to ask whether inter-brand competition between
    these four companies is sufficient to make up for the
    elimination of intra-brand competition on the retail level.
        Although the manufacturers have been very clear about the
    fact that their pricing policies are unilateral and do not
    involve agreement with retailers, we have to look at the
    relevance of the Supreme Court's 2007 Leegin decision. This is
    the case where the Court significantly relaxed the almost 100-
    year-old ban on agreements between manufacturers and retailers
    to set minimum retail prices. Many experts believe that this
    decision paved the way for more unilateral pricing policies
    which, prior to the decision, were more risky because they
    could inadvertently between construed as agreements.
        But whether we are here today with whatever views we have,
    we do not know that we are not here as judges or juries in an
    antitrust case, as much as Senator Lee would make a great
    judge, regardless of whether a minimum resale price was entered
    into through some sort of agreement or unilaterally. We are
    here, in fact, to discuss the policies and try to shed some
    light on what they will mean for competition for the millions
    of Americans who wear contact lenses.
        With that, I will turn it over to my Ranking Member,
    Senator Lee.

               OPENING STATEMENT OF HON. MICHAEL S. LEE,
                 A U.S. SENATOR FROM THE STATE OF UTAH

        Senator Lee. Thank you very much, Madam Chair, and thanks
    to all of you for joining us today. Our hearing today focuses
    on the effect on consumers of recent pricing policies that have
    been implemented by certain manufacturers of contact lenses. It
    makes sense that our focus should always be on the consumer.
        As Robert Bork made clear in his seminal work on antitrust,
    ``The Antitrust Paradox,'' the only legitimate goal of
    antitrust is the maximization of consumer welfare. And, in
    fact, the very name of our Subcommittee reflects this
    observation, reflects this same focus on the consumer: the
    Subcommittee on Antitrust, Competition Policy and Consumer
    Rights.
        Business decisions are no doubt complex, and neither
    Congress nor regulators can always be in a position to
    understand all the different motives and imperatives that
    result in a particular business adopting a particular policy.
    So we have to be careful not to second-guess business judgment.
    Our interest goes no further than to protect competition so as
    to maximize consumer welfare, and we seek an understanding of
    certain business practices for that purpose, and only for that
    purpose.
        Any analysis we conduct, as well as any analysis conducted
    by the antitrust enforcement agencies within the Federal
    Government, must be grounded in evidence and must be consistent
    with well-established economic policy.
        During its short history, antitrust law has at times been
    subject to attempts by competitors to use the process not to
    benefit competition within the marketplace, but instead to
    modify it in a way that might inure to their own benefit, that
    might advantage their own particular business interests. That
    temptation will always be present in antitrust law, and so we
    must always be on guard to ensure that we aim only to protect
    competition rather than any particular competitor or
    individual. By so doing we can help create market conditions
    that result in the most choices, in the highest quality, and
    the most favorable prices for consumers, who, as I mentioned at
    the outset, are the proper focus of our antitrust analysis.
        With this in mind, I look forward to hearing from the
    witnesses today regarding the state of competition in the
    market for contact lenses and any effect that new pricing
    policies implemented by a few of the manufacturers might have
    on that market.
        As I understand it, the market for contact lenses is a
    little different than most other product markets. It is joined
    by only a few other industries, such as industries involving
    pet medications and in some instances dermatological
    preparations, in that the retailer of the product is also an
    essential gatekeeper without whose permission in the form of a
    required medical prescription the product simply cannot be
    purchased, it cannot be obtained.
        I am interested in how Federal laws might be affecting
    competition in the market for medications for pet animals and
    during recent weeks have been looking into potential
    legislation to address issues in that market.
        With respect to the market for contact lenses, within the
    last 2 years three significant manufacturers have announced a
    new pricing scheme whereby the manufacturers will not provide
    lenses to distributors, whether that distributor is an
    optometrist or a big box store like Walmart or somebody else,
    if that distributor sells the product to consumers below
    certain minimum prices.
        When such policies involve an agreement between the
    manufacturer the retailer, they are often referred to as
    ``resale price maintenance agreements.'' Minimum price
    arrangements can in some circumstances be justified, whether by
    increases in service, concerns about free riding, or for other
    reasons. But in most cases, the most immediate result is an
    increase in price as consumers no longer have the option of
    seeking the product at a lower price from a business that
    offers it at discounted prices.
        This is intended as an exploratory hearing to give the
    Subcommittee and regulators a better understanding of the
    reasons for minimum price arrangements in this particular
    market. Tens of millions of Americans pay for contact lenses
    each year, spending hundreds of millions of dollars. Price
    matters. For example, I have heard concerns that as prices for
    contact lenses go up, some consumers wear their lenses longer
    than they should, and in so doing, risk doing some damage to
    their eyes, specifically in an attempt to save money. It is,
    therefore, fairly important that we consider very carefully the
    effect that minimum price arrangements might have on prices for
    contract lenses, and thus in turn on the consumers who wear
    them.
        I thank the witnesses for being here today and look forward
    to their testimony. Thank you, Madam Chair.
        Chairman Klobuchar. Thank you very much.
        I would like to now introduce our distinguished witnesses.
    Our first witness is Joe Zeidner. He has been the legal counsel
    at 1-800 CONTACTS since 2003, the chief legal officer, and
    prior to that was general counsel and corporate secretary of
    the company.
        Our second witness is Dr. Millicent Knight. Dr. Knight was
    named head of professional affairs at VISTAKON, Johnson &
    Johnson Vision Care, in April 2014. Before that, she was a
    practicing optometrist for 25 years and has owned her own
    practice twice.
        Next we will hear from Dr. David Cockrell. He is president
    of the American Optometric Association. He and his wife, Dr.
    Cheryl Cockrell, own a practice in Stillwater, Oklahoma, which
    is called the Cockrell Eye Care Center.
        Our final witness will be Mr. George Slover. He is the
    senior policy counsel in Consumers Union's Washington office.
    Prior to that he worked for the House Judiciary and Energy and
    Commerce Committees, as well as the Justice Department's
    Antitrust Division.
        Thank you all for appearing at our Subcommittee to testify.
    I ask our witnesses to raise their right hand and stand as I
    administer the oath. Do you affirm that the testimony you are
    about to give before the Committee will be the truth, the whole
    truth, and nothing but the truth, so help you God?
        Mr. Zeidner. I do.
        Dr. Knight. I do.
        Dr. Cockrell. I do.
        Mr. Slover. I do.
        Chairman Klobuchar. Thank you.
        We will start with you, Mr. Zeidner. Thank you.

             STATEMENT OF R. JOE ZEIDNER, GENERAL COUNSEL,
                   1-800 CONTACTS, INC., DRAPER, UTAH

        Mr. Zeidner. Madam Chairwoman, Senator Lee, my name is Joe
    Zeidner. I am General Counsel of 1-800 CONTACTS. This is my
    first time testifying before the U.S. Senate, and I appreciate
    you giving me this honor. I am proud to have my son, Pierce,
    here with me today.
        I am here to talk about resale price maintenance programs
    that have been adopted by three of the four largest contact
    lenses manufacturers. These programs prevent us and every other
    retailer from selling those lenses below the price set by the
    manufacturer.
        This development will fundamentally change our industry and
    in the process dramatically reduce options available to
    consumers. Consumers prescribed lenses covered by RPM will no
    longer be able to shop around for a discount. They will pay
    higher prices, generally now and especially in the future, as
    discounted sellers are forced out of the contact lens business.
    Decades of work by Congress, the FTC, and the State Attorneys
    General to separate the prescription from the purchase of
    contact lenses will be reversed.
        Thirty-eight million Americans, two-thirds of whom are
    women, wear contact lenses. They will spend $4.2 billion
    annually on contact lenses and billions more on solutions and
    services such as eye exams. RPM agreements are a problem for
    these consumers because the marketplace for contact lenses is
    different. It is different in four ways.
        First, under Federal law, consumers cannot purchase contact
    lenses without a prescription.
        Second, contact lens prescriptions are brand-specific and
    optometrists, not the consumer, determine the brand.
        Third, under Federal law, the consumer cannot substitute
    one brand for another, so there is no inter-brand competition
    and the consumer is locked in.
        And, fourth, optometrists wear two hats, both as a
    professional and as a retailer. They sell what they prescribe.
    As this graphic clearly illustrated, there is an inherent
    conflict of interest.
        Because of these constraints, RPM agreements function
    differently here than in other retail markets. Because
    consumers cannot buy contact lenses without a prescription,
    they cannot switch brands once prescribed. For decades, our
    Government has worked to prevent these constraints from being
    exploited for anticompetitive purposes.
        In 1996, 34 State Attorneys General sued the AOA and the
    major manufacturers for conspiring to impede competition from
    alternative sellers. This map shows the States that
    participated. We appreciate the role played by then-Connecticut
    Attorney General Blumenthal.
        In 2002, Senator Ted Cruz, who was then the director of the
    Office of Policy Planning at the FTC, proposed a verification
    system to make it easier for consumers to purchase their lenses
    from retailers other than their eye doctor.
        In 2003, Congress enacted the Fairness to Contact Lens
    Consumers Act, guaranteeing consumers the right to
    automatically receive copies of their prescriptions and
    enacting the verification system proposed by the FTC.
        In 2005, legislation was introduced, cosponsored by now-
    Chairman Senator Leahy, to bar manufacturers from
    discriminating against alternative retailers and the
    distribution of their products.
        The latest attempt to frustrate these efforts are RPM
    programs. They are being introduced in the market, which is
    already concentrated and dominated by only four players who,
    between them, control the market.
        The RPM program now covers 40 percent of the market and it
    is growing. As we sit here today, millions of Americans who
    have been prescribed one of these brands have unwittingly been
    thrown into a controlled marketplace. Those who have been
    choosing to buy from retailers other than their eye doctor will
    see fixed prices, they will see higher prices, and they will
    lose their ability to shop around based on price. They will
    have no alternative but to pay a fixed price or expend the time
    and money to return to their eye doctor and have him prescribe
    an alternative brand.
        What does this mean to the contact lens wearer? As is
    summarized on this graph, depending upon which type of J&J lens
    the consumer wears, she could see costs increase as high as 112
    percent above recent discount prices. Since vision correction
    is genetic, the cost impact on a family could be much greater.
    Even a consumer who has worn the same lens for years will
    suddenly have fewer choices and inexplicably higher prices the
    next time they reorder.
        And to the extent RPM programs limit a consumer's ability
    to purchase their lenses from anyone other than her eye doctor,
    she and those like her will spend hundreds of millions of
    dollars more in time and transportation costs, in addition to
    having to spend more for the lenses themselves.
        The irony is that ocular health is served when contact lens
    wearers switch out their lenses on a timely basis. By
    preventing consumers from shopping for a discount, RPM programs
    will make replacement lenses more expensive and more difficult
    to obtain, making it less likely that wearers will abide by the
    replacement schedule.
        Unless someone steps in to stop these programs from
    dominating an already highly concentrated industry, discount
    shopping will be a thing of the past. Consumers will have far
    fewer choices of where they can purchase their lenses. They
    will pay higher prices, especially as discounters drop out of
    the market and eye care providers gain more pricing power.
        We appreciate the Subcommittee holding today's hearing, and
    I thank you for the opportunity to testify.
        [The prepared statement of Mr. Zeidner appears as a
    submission for the record.]
        Chairman Klobuchar. Thank you very much.
        Dr. Knight.

     STATEMENT OF MILLICENT L. KNIGHT, O.D., HEAD OF PROFESSIONAL
        AFFAIRS, JOHNSON & JOHNSON VISION CARE, NORTH AMERICA,
                         JACKSONVILLE, FLORIDA

        Dr. Knight. Good afternoon, Madam Chairwoman and Ranking
    Member Lee. Thank you for the opportunity to testify today.
    Again, as you indicated, my name is Dr. Millicent Knight, and I
    am the head of professional affairs and a member of the North
    America Management Team for Johnson & Johnson Vision Care, the
    makers of ACUVUE brand contact lenses. I serve as a liaison
    between the company and our professional customers, which
    include the 50,000 independent eye care professionals who
    prescribe contact lenses for their patients.
        Before my role, as Senator Klobuchar indicated, I was a
    practicing optometrist for 25 years. Although I do not see
    patients now, I continue to advocate on their behalf by helping
    our company best understand what doctors need to better serve
    their patients. And it is with the patient in mind that I would
    like to share our perspective on consumer pricing within the
    contact lens industry.
        Let me begin by stating we have not implemented resale
    pricing maintenance, called an RPM, with retailers on the
    prices at which they will sell ACUVUE products. Rather, we have
    established a unilateral pricing policy, called a UPP. It is
    the minimum price in the market--a price that is actually lower
    than the current national average selling price to consumers.
    There are no agreements with any resellers now, nor are any
    planned for the future.
        We believe the implementation of a UPP on several of our
    most widely prescribed ACUVUE brands will benefit consumers who
    depend on these products.
        First, by implementing UPP, we are lowering the price for
    the most widely prescribed ACUVUE brand lenses, and based on a
    review of current average consumer prices across all channels--
    and that includes independent eye care professionals, national
    retailers, and online retailers--we estimate that two-thirds of
    patients who buy ACUVUE brands will pay a lower price for their
    product as a result of the UPP. An additional 17 percent of
    consumers will see little to no change.
        In looking at Internet sales, 1-800 customers will see on
    average an 8.5-percent decrease in the price of ACUVUE brands
    if 1-800 sells at our UPP minimal retail price.
        For example, one box of ACUVUE Oasys for astigmatism is now
    $47.00 on their website. If they charge our UPP price, the cost
    to the consumer will be $40.
        Second, by implementing the UPP, we are passing the
    benefits of rebates across our entire customer base. We are
    replacing the burdensome rebate process with instant savings
    for every box purchased, regardless of the quantity. In fact,
    our data suggests only a very few ACUVUE consumers complete the
    process to redeem a rebate. With the UPP, lower prices are
    available to more consumers, including those who are more
    likely to purchase one box at a time. Typically, these are less
    affluent consumers who would benefit most from lower prices.
        Third, by implementing the UPP, we are offering consumers
    more pricing transparency. Today an advertisement may show a
    low box price that is only obtained if the consumer buys the
    maximum quantity and redeems a mail-in rebate. Often the
    consumer is not aware of these conditions until the transaction
    is already underway. With our UPP, consumers will have
    significantly improved visibility to the price they can expect
    to pay, regardless of where they choose to purchase their
    contact lenses.
        Finally, we believe that the transparency of UPP minimum
    retail price is the best way to effect a consumer price
    reduction. Historical pricing data shows that retail prices in
    the contact lens market rarely go lower. Of the 12 most popular
    contact lenses prescribed in the last 5 years, only Johnson &
    Johnson Vision Care's 1-day ACUVUE Moist showed a material
    price decline. Consumers like 1-800 have already shared this
    information with their consumers.
        In closing, by instituting a UPP, lowering our prices, and
    by making the process by which consumers can access these lower
    prices simpler and more convenient, we believe we can better
    compete with other manufacturers in the contact lens market,
    and, more importantly, our UPP will lead to lower prices for a
    large majority of our consumers.
        Thank you.
        [The prepared statement of Dr. Knight appears as a
    submission for the record.]
        Chairman Klobuchar. Thank you very much.
        Dr. Cockrell.

       STATEMENT OF DAVID A. COCKRELL, O.D., PRESIDENT, AMERICAN
              OPTOMETRIC ASSOCIATION, STILLWATER, OKLAHOMA

        Dr. Cockrell. Thank you. Good afternoon, Chairperson
    Klobuchar, Ranking Member Lee. I am Dr. David A. Cockrell,
    president of the American Optometric Association and an
    optometrist in independent practice in Stillwater, Oklahoma. I
    am joined today by my colleague Dr. Kerry Beebe of Brainard,
    Minnesota, who is here on behalf of the Minnesota Optometric
    Association. Like me, Dr. Beebe is currently treating patients
    with serious complications arising from improper contact lens
    use.
        I do want to ask a question. My understanding is that our
    full submitted statement will be included in the record?
        Chairman Klobuchar. That is correct. Thank you.
        Dr. Cockrell. Thank you.
        Along with our colleagues Dr. Michael Duenas and Dr. Beth
    Kneib, who participated in a meeting last week with the
    Subcommittee staff, we are pleased to be a resource for this
    panel on patient health and safety concerns and to discuss the
    high-quality eye care provided by the Nation's doctors of
    optometry.
        The AOA, with more than 36,000 member doctors and
    affiliated associations representing each State, DC, and our
    Armed Forces and Federal service optometrists, is the national
    voice for the optometric profession, the tens of millions of
    patients who depend on us, and the cause for eye health care.
        Optometrists provide a full range of primary eye health and
    vision care to our patients, including children and working
    adults. In my own practice, we see patients ranging in age from
    babies just a few months old to centenarians. Within that
    group, our contact lens patients range in age from the age of 2
    up to over 90 years of age.
        My own office's main focus is on the management and
    treatment of vision-related problems and eye diseases. As a
    team of four primary eye care physicians, we regularly see
    patients with conjunctivitis, cataract, glaucoma, diabetic
    retinopathy, and macular degeneration. Also, we perform surgery
    for lid procedures as well as laser surgeries for glaucoma and
    secondary cataract in our office.
        Often we are working closely with our ophthalmologist
    colleagues to ensure that every patient gets the care that she
    or he needs. Many ophthalmology practices also prescribe and
    dispense contact lenses for the same reasons that optometrists
    do, and there is considerable agreement between the respective
    national organizations on appropriate patient care, eye health,
    and consumer safety concerns.
        Given the topic of today's hearing and the AOA's role in
    educating the public, it is essential to state that contact
    lenses have been recognized in law and regulation since the
    1970s as a medical device. A doctor's supervision and care for
    their proper and safe use is required. However, since contact
    lenses are so widely and successfully used by consumers, I have
    been asked from time to time why physician supervision is
    needed and what it consists of.
        In my own personal experience, I have seen unsupervised or
    non-prescribed contact lens use result in corneal
    neovascularization; giant papillary conjunctivitis; corneal
    infections, ulcer, infiltrates and other forms of inflammation;
    corneal scarring; and permanent loss of vision.
        As an eye doctor, what I find so profoundly tragic is that
    the majority of these conditions are completely preventable.
        With expectations and care implications so notably high, my
    colleagues and I want and frequently insist on the very best
    contact lens products to meet our patients' needs. There have
    been historic innovations in these medical devices over the
    last three decades which I believe have benefited patients in
    three key ways:
        First, innovation in the contact lens industry has enabled
    more patients to use contact lenses for a greater proportion of
    their vision needs;
        Second, innovation has improved the quality of contact
    lenses so that they are easier for patients to use with less
    risk of harm to the eye.
        Third, innovation has created healthy competition among
    contact lens manufacturers to bring high-quality products and
    competitive pricing to consumers.
        The priority for the AOA is to support best practices and
    high standards to benefit the tens of millions of Americans who
    entrust their vision and eye health to my colleagues and to me.
    On the subject of competition generally, the AOA believes
    strongly that competition in the contact lens industry is
    positive and needed.
        As I understand it, I share this table with executives
    representing the largest manufacturer of contact lenses in the
    United States and the largest seller of contact lenses in the
    world. They are in a better position than am I to describe and
    discuss their own pricing policies and strategies. Suffice it
    to say that in my experience of over 30 years of prescribing
    these devices, my contact lens patients have never had more
    choices, products of a higher quality, or greater affordability
    in their options.
        As the national voice of 36,000 doctors of optometry--
    notably including Senator John Boozman, a longtime doctor of
    optometry in private practice and an AOA and an Arkansas
    Optometric Association member--and the tens of millions of
    patients we serve, we work to educate the public about the safe
    use of these contact lenses as a medical device and the dangers
    posed by unscrupulous sellers.
        With consumers still facing risks, the AOA is partnering
    with the Food and Drug Administration on a new national public
    health awareness campaign to alert teenagers and young adults
    to the dangers connected to the improper use of contact lenses.
    I commend the FDA for listening so closely to concerned
    optometrists and the AOA.
        Again, thank you very much for the opportunity to be here
    and to participate in today's questions.
        [The prepared statement of Dr. Cockrell appears as a
    submission for the record.]
        Chairman Klobuchar. Thank you very much, Dr. Cockrell.
        Mr. Slover.

               STATEMENT OF GEORGE SLOVER, SENIOR POLICY
                COUNSEL, CONSUMERS UNION, WASHINGTON, DC

        Mr. Slover. Thank you, Chairwoman Klobuchar, Senator Lee.
    At Consumers Union, the policy and advocacy division of
    Consumer Reports, we work for a fair, just, and safe
    marketplace for consumers and to empower consumers to protect
    themselves. Product safety, square dealing, and competitive
    choices are all key to that mission. Our efforts in recent
    years to promote safety for contact lenses have included
    calling attention to recalls, calling for better warning labels
    on cleaning solution, and publishing contact lens safety tips.
        On consumer choice, our efforts have included working for
    passage of the Fairness to Contact Lens Consumers Act of 2003.
    It requires eye doctors to give patients a copy of their
    prescription, without charge and without having to ask, so they
    can shop around for the best price. Before that law, many
    doctors were making it impossible to shop around, tying the
    professional eye care to purchase of contact lenses from the
    doctor.
        And now, after the 2003 law closed off that pathway to
    restricting consumer choice, we are witnessing a new avenue
    being paved to the same destination.
        We supported efforts in Congress to stop erosion of the per
    se antitrust prohibition against vertical price fixing, a.k.a.
    resale price maintenance or RPM. We saw the per se prohibition
    as a bulwark protector of retail competition and consumer
    choice.
        We were dismayed when the Supreme Court overruled the
    century-old Dr. Miles precedent and swept away the per se
    prohibition in its 2007 Leegin decision. We believe the kinds
    of good-faith business goals the Court cited in abandoning Dr.
    Miles, including the kinds of important patient health and
    safety goals described by other witnesses here today, can be
    pursued effectively without denying the rights of consumers to
    shop for a better price and the rights of retailers to offer
    one.
        The Colgate precedent allows a manufacturer to
    unilaterally, independently set retail price. But in
    fundamental ways, it runs counter to a manufacturer's interest
    to impose pricing terms that stand to reduce retail sales, and
    profits, by putting its product out of reach for consumers who
    cannot afford the higher markup.
        In a competitive market, if one manufacturer tries this
    kind of rigid pricing on its own, another will step in and give
    cost-conscious consumers what they want. This kind of pricing
    policy makes the most sense when the manufacturer is confident
    it will not be undercut by competition.
        So it is important to keep all that in mind when a
    manufacturer describes its pricing policy as ``unilateral,''
    particularly where its competitors seem to be joining in, and
    where others in the marketing chain--the full-price retailers--
    are clearly benefiting.
        Whether what is being described here as unilateral may
    actually cross over into antitrust territory, under Colgate and
    now Leegin, is a question for antitrust enforcers and the
    courts to determine. But it certainly warrants a closer look.
        And whether or not there is an antitrust violation from a
    legal standpoint, from a practical standpoint, no discounting
    means consumers cannot get better deals, because retailers
    cannot offer them--not good for consumers however you look at
    it.
        Not long ago, ``Buy your contact lenses at Costco'' made
    our ShopSmart Top 15 list of money-saving tips. It looks like
    contact lenses may not make that list again.
        The typical reason offered for tolerating RPM--that it
    helps prevent so-called free riding by discounters taking
    advantage of the extra consumer services provided by some full-
    price retailers--does not really come into play here. Here, the
    doctor charges for the eye exam the consumer needs to get the
    correct prescription, and for any follow-up care. The 2003 law
    requires the doctor to give the patient a copy of the
    prescription, but it does not touch the requirement that there
    be one. So here, the doctor is being paid separately for those
    extra services. So even if you accept the free rider idea in
    general--and there are reasons to be skeptical--but even if you
    do accept it, it is not really an issue here.
        In short, there is no reason for professional eye care
    services to be tied to the sale of contact lenses. The 2003 law
    removed chains that once tied them tightly together, but
    unilateral pricing is now replacing those chains with a silken
    cord, softer but with a similar binding effect. Consumers are
    still free to shop around, but not in hopes of saving any
    money.
        Thank you.
        [The prepared statement of Mr. Slover appears as a
    submission for the record.]
        Chairman Klobuchar. Thank you very much to all of you.
    Thank you. After I said we are not juries or judges, I'll just
    start out with that case, that Colgate decision from 1919. I
    assume you've all read every word.
        The Supreme Court precedent from the Colgate case
    establishes that manufacturers are free to decide who they can
    sell their products to, as I mentioned earlier, and they can
    decide to stop selling products to retailers who sell below
    their suggested retail price.
        Given the unique nature of the contact lens market, Mr.
    Slover, are the policies we're talking about in the contact
    lens industry, do you think they're somehow distinguishable
    from the ones outlined in the 1919 case?
        Mr. Slover. Well, in general, the Colgate doctrine allows
    pricing restrictions to harm consumers in the name of freedom
    of contract. That's an accommodation that's been made. But to
    be under Colgate, the pricing policy has to be truly unilateral
    and not the product of communication and coordination. That is
    where the details lie. That is ultimately a factual question
    for investigators and the courts.
        Things are not always what they might appear, so you have
    to dig a little deeper. It is not always clear what has induced
    the new policy, and once it's out there there's the question of
    deciding as you go forward whether and how to maintain it over
    time in the face of positive and negative reactions that you
    get in the marketplace.
        So in this market, there are a number of ways that the eye
    doctors have of interacting with the manufacturers and making
    their views known in determining what products are available to
    the consumers. So it does not really change what the Colgate
    doctrine says, but it does raise some unique issues to be
    looking at.
        Senator Klobuchar. Okay. Anyone else want to comment on
    that?
        [No response].
        Senator Klobuchar. Okay. The next case we talked about here
    was this Leegin case. In 2007, the Supreme Court decided that
    minimum resale price maintenance, which we know here is RPM
    agreements, should not be banned outright, overturning, as I
    mentioned, nearly 100 years of precedent.
        Instead, they said they should be considered on a case-by-
    case basis under the rule of reason test which balances pro-
    competitive justifications for pricing policy with the anti-
    competitive effects.
        The policies at issue today are specifically called
    unilateral pricing policies, so presumably, as you mentioned,
    there's not supposed to be an agreement between the
    manufacturer and the retailer on the minimum retail price.
        Are there any circumstances, do you think, Mr. Slover,
    under which a unilateral minimal retail price policy could be
    considered a form of resale price maintenance and then subject
    to greater scrutiny?
        Mr. Slover. Well, I would just say that it's in the details
    of the facts, if it's truly unilateral, then it's not going to
    be an antitrust violation, and Colgate made that clear 100
    years ago and still makes that clear. The question is whether
    it's truly unilateral, and whether you can maintain a
    unilateral policy in the marketplace going forward without some
    kind of interaction and communication and coordination
    developing.
        Senator Klobuchar. Okay. And I do want to ask unanimous
    consent to include a written statement in the record from Alcon
    Laboraties, which is another contact lens manufacturer.
        [The information referred to appears as a submission for
    the record.]
        Senator Klobuchar. I'll start with Mr. Zeidner and then
    you, Mr. Slover. In testimony submitted, this testimony from
    Alcon which is the second largest contact lens manufacturer,
    they said that they instituted minimum retail prices to assure
    that the selling price for the product was sufficient to
    motivate eyecare professionals to invest their time in learning
    and communicating the benefits of the product.
        They cite the free rider problem, which I can also ask you
    guys about, where eye care professionals incur the cost of
    studying and appraising the new technology, but online and big
    box retailers do not. Does this make some sense? Do you agree
    with this assessment? Maybe I'll just go down the row here.
        Mr. Zeidner. Sure. We do not agree with it. We do not
    believe that eye doctors need to have any extra incentive to
    fit contact lenses. They're already paid a special fitting fee
    to do that so they're already being paid for that.
        And giving doctors an incentive through UPP may or may not
    promote competition among manufacturers, but it destroys
    competition among retailers because the consumer can't choose
    the brand, the brand is chosen for them by the eye doctor. They
    can only choose where they purchase it.
        In fact, Johnson & Johnson's president said that in a
    Vision Monday article where she was interviewed: ``The new
    policy sets minimum retail pricing, which has been communicated
    to all customers. In addition, manufacturers' rebates have been
    eliminated by building those discounts into the retail price of
    these legacy products rather than requiring customers to send
    in proof-of-purchase to obtain rebates. This gives the
    optometrist the ability to improve his or her capture rate in
    the office. Now the patient has no incentive to shop around.''
        That's really what this is about. It's about getting
    patients to buy from the doctor and not shopping for a discount
    price because there's none available.
        What will happen now is a doctor can just say, here's
    screen shots of every discounter that you might be considering
    going to. There's no reason to shop around because everybody
    has the same price as I do.
        Senator Klobuchar. And so before this happened were your
    prices significantly lower than the other ones?
        Mr. Zeidner. Yes. In fact, we've got--we just did this
    before the UPP prices which go into effect on all of J&J's
    products, except for ACUVUE 2, on August 1st. You can see the
    lowest internet price, and this is the most popular lens,
    ACUVUE Oasys. By the way, it used to be sold as a 6-pack, now
    it's sold as a 12-pack. So when we were talking earlier about
    buying one box, that's not available any longer.
        Senator Klobuchar. It's kind of hard to see. Maybe I need
    better contact lenses or something.
        Mr. Zeidner. Oh. We can pass it up.
        Senator Klobuchar. Yes.
        Mr. Zeidner. Maybe you need some more. So you can see, this
    is the same price for a 6-pack before and after. So the
    percentage increase at the lowest internet price just on this
    box is a 111-percent increase. On our product right here, it's
    $25.87 before, $33.75 after, a 30-percent increase.
        Senator Klobuchar. This is what? Before? Okay. Before the
    retail----
        Mr. Zeidner. Right. So across the board, everyone is going
    to be paying more for this most popular lens.
        Senator Klobuchar. Is it on all lenses that they've done
    this?
        Mr. Zeidner. They've done it on all lenses except for the
    most antiquated lens, which is ACUVUE 2.
        Senator Klobuchar. Okay. All right.
        Mr. Zeidner. Correct.
        Senator Klobuchar. Dr. Knight, so I have two things going
    here, actually. One, is--maybe we'll start with this, this
    pricing. I know you may have a different view of this, of what
    the pricing differences are. Then the second thing is about the
    free rider issue and if Alcon, which I know is your competitor,
    but their claim on this in terms of the free rider issue.
        Dr. Knight. First of all, our goal, as I indicated earlier,
    was--is to--with implementing the UPP, was to provide an
    opportunity for consumers to receive lower prices, and I have
    not had a chance to analyze the information that you have on
    the board there. But we have looked at your prices and as I
    indicated, a specific example of where your price would go down
    considerably, from $47.99 to $40.00, if you implement the UPP
    price.
        If you implement our prices, your products across the board
    go down, on average, by 8.5 percent. That is, of course, a
    choice that you have and it's a choice that all retailers had
    prior to the implementation of this UPP policy. Some of them
    chose to lower their prices and many of them have not.
        Senator Klobuchar. Okay.
        Dr. Knight. In regards to the----
        Senator Klobuchar. Alcon's claim about--you know, sort of
    in my head I think about, I have a lot of sympathy for our
    retailers like Best Buy and Target with this marketplace
    fairness issue. A totally different issue, but you know, Amazon
    can sell a TV on the internet without having any--much employee
    description to customers and things like that.
        Then, in fact, the person then spends an hour with their
    Geek Squad or whatever, and then they go online and buy it, you
    know, for less because the taxes are different. It's kind of a
    mess that I hope we're going to fix. A totally different issue.
        But the reason I thought of it was that you've got
    optometrists and other people advising about these lenses, and
    maybe it's the same thing. And Mr. Zeidner pointed out that the
    optometrists get paid separately for that work. I just wondered
    what you thought about that free rider argument that Alcon
    makes.
        Dr. Knight. Well, I think that I don't know a lot about
    Alcon's business philosophy, but the product that they
    released, Dailies Total 1, was new innovation and there's a lot
    of cost involved in creating new innovation. There's a lot of
    time spent by the doctors in continuing education to learn
    about new products.
        I believe that what they were suggesting is that this is a
    way of being able to ensure that doctors will take time and
    ensure that they learn as much as possible about new products.
    Most doctors are really excited when new technology comes out.
    It keeps us stimulated and it's good for the consumer. So I
    think it would happen even without it, but at my best guess I
    would think that that's what the reference is about.
        Senator Klobuchar. Okay.
        Dr. Cockrell?
        Dr. Cockrell. In reference to Alcon?
        Senator Klobuchar. Yes. I'm not going to hold you
    responsible for the pricing dispute.
        Dr. Cockrell. Perfect.
        [Laughter.]
        Senator Klobuchar. Okay.
        Dr. Cockrell. In reference to Alcon's comments in their
    letter, I read that last night as well. I find it interesting.
    It's certainly not how it was presented to me and that's
    certainly not how I think the average optometrist operates.
    Just as Dr. Knight said, our goal must always be to find the
    most viable product to maintain the patients' eye health,
    regardless of how that lens is priced by the manufacturer to us
    or with or without a UPP pricing policy.
        At the end of the day, if the lens doesn't fit and the
    patient either (a) can't see or (b) has some problem with the
    lens, pricing policy doesn't matter. So for us, that pricing
    policy doesn't make any difference for me as a private
    optometrist. As far as the AOA is concerned, we clearly have no
    position on how any company sets its pricing policy.
        Senator Klobuchar. Okay.
        Mr. Slover?
        Mr. Slover. The free rider argument is the classic argument
    for tolerating resale price maintenance and it does, you know,
    have some plausibility and persuadability and it was part of
    what persuaded the court to overturn the Dr. Miles per se rule.
    Among those who've studied it more closely, it's still
    controversial--both as to how much it really affects business
    decisions, and as to whether it's really necessary to restrict
    pricing in order to address it.
        So I think there could very well be a perception among
    people in business that if they restrict pricing, that it can
    help address a free riding problem. We would just hope that
    they would find other ways to get the services that they want
    that don't involve restricting discounters from offering better
    options for consumers.
        Senator Klobuchar. Okay.
        Well, I think I'll turn it over here to Senator Lee. Thank
    you.
        Senator Lee. Thank you very much. Thanks to all of you for
    being here.
        Dr. Cockrell, I didn't understand most of those terms
    referring to horrible eye conditions you described at the
    outset. I nonetheless don't want to get any of them. None of
    them sound pleasant at all.
        I want to get back to Senator Klobuchar's question from a
    minute ago regarding the statement submitted by Alcon. Is there
    a free rider problem in this industry?
        Dr. Cockrell. You know, you're talking to a non-attorney,
    so the free rider language is new to me.
        Senator Lee. Let's just think of it not in legal terms.
    Just think of it in terms of somebody being able to profit off
    of somebody else's services. In other words, a retailer, a
    distributor, whether online or big box or otherwise, sells a
    product that you as an optometrist invests a lot of time in
    learning about, in learning how to fit, in learning the
    advantages and disadvantages to each patient.
        Those big boxes and other retailers don't invest the same
    amount of time that you do. Does that result in them benefiting
    from work that you put in that you might not otherwise be able
    to be compensated for?
        Dr. Cockrell. I think at the retail end of a patient's
    interaction, whether I sell a contact lens or whether an online
    marketer sells a contact lens, at that point in line it's a
    product that we're selling. We provided our services for a fee,
    whatever that fee happens to be for the appropriate service.
        So if I understand your question correctly, I think that
    whether that lens is discounted by me or discounted by anybody
    else, it's the same lens, regardless of the pricing, it's the
    same product at the end of the day. So I think the answer's
    ``no.''
        Senator Lee. Okay. And that is because you're being paid a
    fee for a service that's a separate service?
        Dr. Cockrell. By the patient.
        Senator Lee. By the patient
        Dr. Cockrell. Correct.
        Senator Lee. By the patient.
        And then Senator Klobuchar referred to this briefly, but I
    want to make sure I understand your answer on this one. Have
    you found that the profit margin for eyecare professionals in
    the context of selling contact lenses is diminishing?
        Dr. Cockrell. Over--well, I'll give you two answers to
    that. Over a period of years--in other words, I have practiced
    for 30 years. Over that period of time, I would say it's
    probably about the same but somewhat down. What happened is, as
    the price of contact lenses came down over time, service fees
    moved in one other direction.
        When it comes to an actual price of a box of contact lenses
    that Mr. Zeidner was referring to, it's hard to relate that
    back to before we had disposable contact lenses. With the
    advent of any of these UPP policies, I think that the
    profitability is probably going to be much less because I would
    think that, in my particular case, in my practice--and I am not
    speaking for the AOA--I can't buy a lens in the same volume
    that 1-800 can, so I can't buy a lens at the same price,
    probably.
        I certainly cannot afford to sell at the same price because
    I have those built-in, inherent costs that Senator Klobuchar
    referred to, like Target or big box does in selling a
    television. I've got people on the ground handling that
    discussion back and forth with a live patient in the room. I've
    got a lot more time invested in a person selling one or two
    boxes as opposed to if they buy boxes as a commodity. So my
    cost of doing business for that product, the product itself, is
    higher because of that.
        Senator Lee. Have you taken this up with Dr. Knight? I'm
    just kidding.
        What do you make of the fact that you do have optometrists
    in many instances serving two roles, both as a health care
    provider where they're expected to offer their sound medical
    judgment and they're also a vendor--they're also a retailer who
    sells to the very same people who buy their products. In your
    experience as an optometrist, does this influence judgment--if
    not your judgment, then the judgment of others that you've
    known in the industry?
        Dr. Cockrell. I'd like to give a long answer to that. The
    short answer is no. The long answer is, at the end of the day
    whether I fit you or anyone else with a contact lens, I am
    ultimately responsible for the health of your eye and the
    outcome of that fitting policy. And in our office's case, and I
    think I can speak for virtually all optometrists, those
    problems I discussed are real and we actually see them.
        The trouble that occurs for a patient is, if the lens
    doesn't fit, it's not like having two pairs of shoes that are
    both size nine and one feels good and one doesn't. If that lens
    is too tight and you don't get enough oxygen, because of that,
    you may develop corneal neo-vascularization.
        If the patient chooses to over-wear that lens and extend
    the lens life far past the time it was designed by the
    manufacturer, then the lens builds up debris and gets dirty,
    and again you don't get enough oxygen through the contact lens
    into the cornea and you may develop neo-vascularization and the
    possibility of all the scarring problems I mentioned earlier.
        So at the end of the day, the price of the lens or the
    possible profitability is really a very, very, very small
    factor for two reasons. First, keep in mind, from the
    professional side, we want to make sure that patients' eyes
    stay healthy.
        From the business side, we want that patient/consumer to
    come back and see us over the next 20 or 30 years. If we don't
    take care of that patient and do a good job with their eye
    health and their vision, they're really not likely to come
    back. So we keep both of those factors in mind and always err
    to the side of safety and the best eye health for the patient.
        I'll put on one more hat. I've been on the State Board of
    Examiners in Oklahoma for 20 years and the problems that we see
    that come before us from the public, every single problem I
    have seen in 20 years has come about because of a poorly
    fitting or a contact lens that was purchased from a fraudulent
    dealer where we've had patients' eyes harmed. We've had two
    cases in the past 3 years where they lost vision and ultimately
    wound up having to have a corneal transplant. Those situations
    never turn out perfectly the rest of the patient's life.
        So every optometrist and ophthalmologist who fits a contact
    lens or deals with those problems is very careful to ascertain
    that the health of the eye is the most important part of that
    process, absolutely.
        Senator Lee. Of your patients that you treat, what would
    you say is the rough ratio of them that choose to purchase
    their contact lenses from you rather than going to a third
    party retailer?
        Dr. Cockrell. We think--we have four doctors in our office.
    We think in our office it's probably closer to 50 percent, and
    that's pretty significant. We live in a college town. We have a
    large practice with a variety of patients. As I said, we have
    patients as young as two, due to specific eye disease, that
    wear contact lenses.
        We have patients with a myriad of different eye diseases
    that purchase them from us because they're specialty contact
    lenses they might not be able to get online. But across the
    board, they purchase from all vendors. They purchase from other
    vendors in town where we live, as well as online. So it's a
    pretty high percentage.
        Senator Lee. I'm guessing that putting a contact lens in a
    2-year-old is not an easy thing.
        Dr. Cockrell. There's a lot of noise involved.
        Senator Lee. Yes.
        Dr. Knight, you mentioned that one of the reasons why you
    pursued UPP was to keep prices down. I just wanted to make sure
    I understand how that works. One would assume more intuitively,
    perhaps, that if you wanted to keep prices down you might
    experiment with a maximum price rather than a minimum price. So
    why do you seek to achieve this through a minimum price? Was a
    maximum price something you considered either as an alternative
    or in addition to this?
        Dr. Knight. A maximum price was not part of our business
    strategy. We did not consider it. Our strategy focused, again,
    around lowering prices. We felt that the best vehicle by which
    to have that outcome would be to use a UPP policy. We tried
    lowering prices in the past without any other tool and it has
    not always translated into a reduction in price to the
    consumer.
        Senator Lee. Okay. So that's how you ended up there?
        Dr. Knight. Yes.
        Senator Lee. Do you--I see my time has expired.
        Senator Klobuchar. That's okay. I went on for quite a
    while.
        Senator Lee. Yes, but you are the Chair.
        Senator Klobuchar. Oh, yes. I see.
        [Laughter.]
        Senator Lee. She wields the gavel very effectively. Thank
    you, Madam Chair.
        You heard Dr. Cockrell mention a minute ago that he does
    not think that there is a free rider problem. I just wanted to
    get back to you on that. I know you addressed that briefly with
    Senator Klobuchar. Do you agree that there are--are you saying
    that there is not a free rider problem? Would you agree with
    that?
        Senator Klobuchar. You know, just to be fair, should I read
    him the paragraph from the Alcon testimony?
        Senator Lee. Yes.
        Senator Klobuchar. I just found it, so we can see what it
    is. What they said was: ``In recent years, however, eyecare
    professionals,'' or ACP's--that's you, right? Okay. ``Have
    found their profit margins on the sale of contacts to be
    narrow. The profit margin is low because of a classic free
    rider problem.'' This is them saying this.
        ``An online seller or mass merchandiser which does not
    incur the cost of studying the technology, appraising what is
    best for a particular patient, or recommending a lens can
    generally under-price eyecare professionals who do bear those
    substantial costs and without whom there would be no market for
    contact lenses.'' That's what they're saying.
        Dr. Knight. Okay. I just wanted to make sure I was on. I
    don't really find there to--I have to use my particular case.
    When I was in practice, we charge for our fitting and
    evaluation fees, as Mr. Slover indicated. So I kept my prices
    very competitive and some patients stayed with our practice to
    purchase their products and others were given their
    prescription to go elsewhere. Being able to sell the contact
    lenses in our office, though, really presented a convenience
    factor for a number of our patients.
        We had a lot of patients who had small children, young
    mothers with small children, we had working professionals, and
    for them to be able to just have their examination, get their
    lenses in an office they trusted, and check one more thing off
    their box--list of things to do, was very helpful.
        And from my vantage point, it also really helped with
    compliance because I really focused a lot on if the patient
    needed an annual supply of lenses, making sure they had all
    their products available so that they would stay compliant and
    not have some of the nasty things that Dr. Cockrell just talked
    about.
        Senator Lee. I get that. But is there a free rider problem
    and are profit margins diminishing?
        Dr. Knight. I think it's the competitive market. Profit
    margins are diminishing, in a sense. But I really didn't focus
    so much on the cost of the products; I priced them
    competitively and then I charge for my services.
        Senator Lee. Okay. You heard Dr. Cockrell say a minute ago
    that he expects his profits will diminish, at least on the
    retail end of things, as a result of this. Does that surprise
    you, and do you expect that to be the norm among eyecare
    professionals?
        Dr. Knight. Well, I'll give you an example of my office
    again, and I'll use a specific product. We sell the Oaysis
    brand contact lenses. And again, my goal is usually to give a
    patient an annual supply--that's what I prescribe--so that they
    stay compliant. That price is $250 for the annual supply. The
    UPP is $220. So my office will need to make an adjustment in
    the price, but that's in the best interests of the consumer.
        Senator Lee. Okay. My time is way over. I'm sure we will
    follow up afterward.
        Senator Klobuchar. Okay. Good.
        So in the end, Dr. Knight, including in your testimony, you
    say that ensuring lower prices for consumers was the reason you
    did this because--I think, just to--I don't want to
    characterize this, but you said that some of the price lowering
    wasn't passed on to the consumers when you guys would do this.
        Dr. Knight. Correct.
        Senator Klobuchar. So the reason was--or your belief and
    the reason was that you set these low minimum prices and then
    they're guaranteed to be passed on. Is that right?
        Dr. Knight. Well, our goal is that that--the hope is that
    that would be passed on. We also lowered our prices to each of
    the customers across the board, not just eyecare professionals
    but everyone who sells our products received a reduction in the
    cost.
        Senator Klobuchar. Okay.
        Dr. Knight. And that is what we hope would be passed on to
    the consumer.
        Senator Klobuchar. Okay. And you have five examples of
    minimum retail prices and all but one of them is lower than the
    national average retail price. How about the other products,
    are they all priced lower than the national average? This is in
    your written testimony.
        Dr. Knight. Okay. I don't have that in front of me.
        Senator Klobuchar. It's all right.
        Dr. Knight. The majority of our products would be priced
    lower. There are some that would be priced higher and those are
    usually the more specialty lenses, the latest in innovation.
    It's a very small margin, comparatively speaking.
        Senator Klobuchar. Okay.
        So Mr. Zeidner, you've heard this about, from Dr. Knight's
    standpoint, when they would lower prices without having these
    minimum price--unilateral price policies in place, oftentimes
    it wasn't passed on, from their perspective. I assume they've
    got data to show that. So what is your response to that?
        Mr. Zeidner. Well, generally speaking, in the market all of
    the online sellers are going to be less expensive than the
    doctors, and that's the average OD price that we have there. So
    your online sellers are always going to be lower. When Dr.
    Knight talked about 8.3 percent on average, what's interesting
    is our prices--now, we have not put the new UPP prices into
    effect yet because we don't have to, and we're not going to
    raise prices on our consumers until we have to, which is August
    1st.
        But for some of the products, Johnson & Johnson will give
    rebates. We have higher prices and then, since we're not
    provided those same rebates from Johnson & Johnson, we rebate
    down to the same price that Johnson & Johnson is giving to
    doctors and that they're selling them for, or lower. So
    that's--I don't know. I'm--we're happy to supply you----
        Senator Klobuchar. Are your prices now, right now, lower
    than what their minimum price is?
        Mr. Zeidner. On----
        Senator Klobuchar. What their minimum price will be August
    1st, or whatever it is?
        Mr. Zeidner. On some products they are, but we have to
    change all those August 1st or we get cut off.
        Senator Klobuchar. So we're going to be able to know
    September 1st how this is going?
        Mr. Zeidner. Absolutely.
        Senator Klobuchar. Is that right? If they're--compared to
    where they were the last year?
        Mr. Zeidner. Yes. And if the point is to save consumers
    money, I don't know why we have a minimum price we can't go
    below.
        Senator Klobuchar. I think--I don't want to put words in--I
    think she'd argue that before when they did this it somehow
    wasn't being passed on.
        Mr. Zeidner. Well, but--but they don't have to do that now
    either. It's the minimum price but every--she said that they
    have to adjust their price in their office. That's--in fact,
    they don't have to do anything. They can actually raise the
    price. What we believe is manufacturers are setting that price
    so doctors can say, ahh, no one can compete below that.
        We can stay at that price or even go higher if we want to
    increase our margin. So there's no expectation, at least in our
    minds, that that price is going to be passed on to consumers.
    From our point of view in the business, all that is is
    insulating optometrists from having to compete with discounters
    that go much lower than that price.
        Also, on the whole----
        Senator Klobuchar. So what are you--you have--I think I had
    asked someone else this before this hearing, but you have what
    percentage of the market? Like, online is what percentage, not
    maybe you personally?
        Mr. Zeidner. Well, of--of online, we're probably three-
    quarters. And for----
        Senator Klobuchar. Three-quarters of--oh, you are three-
    quarters of online?
        Mr. Zeidner. Of the online, yes.
        Senator Klobuchar. I thought you meant you're probably
    three-quarters of the market.
        Mr. Zeidner. No, no, no. No, no, no.
        Senator Klobuchar. So you are what percentage? Do you know
    what percent of the market?
        Mr. Zeidner. Yes. We're roughly 10 to 11 percent of the
    entire market. However, because it's so fragmented, because, as
    Dr. Knight mentioned, there's 40,000 to 50,000 optometrists,
    we're still the largest seller because it's so fragmented.
        Senator Klobuchar. I see.
        Mr. Zeidner. So we are the--and we have the most data.
    We're happy to show as well Johnson & Johnson is not offering
    us, as Dr. Cockrell mentioned--we're not getting any price
    discount for buying volume. In fact, that's been taken away. So
    now the same price per box, if you----
        Senator Klobuchar. But that's going to be taken away with
    this?
        Mr. Zeidner. Yes, ma'am.
        Senator Klobuchar. Okay.
        Mr. Zeidner. Yes, ma'am.
        Senator Klobuchar. Okay. All right.
        Mr. Slover, what do you think is going to happen with
    prices when this goes into effect August 1st?
        Mr. Slover. Well, from what I've heard today, when the
    policy is instituted, I think for some patients who are getting
    their lenses from some retailers, the price is going to go down
    in the short term. It sounds like that's the intent and the
    direction. But the prices for consumers who care the most about
    cost and are willing to shop around for options, for them the
    price is going to go up and it's going to stay up.
        I agree with those who have said that if the goal is to
    lower prices, it's more logical to put a maximum of ceiling on
    the retail price and to allow the retailers to go below that if
    they want to, than to put a floor on the price and allow the
    retailers to go above that. Now, historically, the courts have
    often found that maximum prices end up encouraging price fixing
    anyway, but they're treated differently under the antitrust
    laws. You can sort of see why they would be.
        Senator Klobuchar. And do you think the fact that it's more
    concentrated with three companies having 90 percent of the
    market share, and you know, sort of like--a little bit like the
    railroads are right now, but do you think that's going to make
    a difference in how this is rolled out, like it was less
    concentrated and people were offering these minimum price
    agreements? Do you think there might be a different effect than
    the fact that you have a more concentrated industry?
        Mr. Slover. Well, in general, the more concentrated a
    market is, the greater the risk for coordination, because it
    becomes easier for competitors to coordinate their conduct. And
    here, if--it's easier for them all to kind of watch what each
    other is doing and to go along and it's easier for each of them
    to control the situation.
        Senator Klobuchar. Dr. Knight, what do you think the effect
    this is going to have on innovation to do this? That's another
    piece we're talking about, about pricing. Then Dr. Cockrell
    brought up innovation. What do you think the effect it will
    have on innovation?
        Dr. Knight. Well, I think and I hope that it will continue
    to stimulate innovation. It's a competitive market and we will
    always react to the market, as will our competitors. Our goal
    is to increase our market share whenever possible and to be
    able to, at the same token, lower our consumer prices. But the
    market tends to adjust for those things.
        Senator Klobuchar. Could I just say one more thing with
    these price--minimum price agreements? Like, how long do they
    last? Can they be adjusted right away? Because if you had a
    competitive market you'd want to adjust your product right
    away.
        Dr. Knight. That is correct. They can be adjusted right
    away. They are not a permanent solution.
        Senator Klobuchar. Or a year long, or 6 months or anything?
        Dr. Knight. We really didn't put a timeframe on it. It is
    one of the means by which we wanted to try and accomplish our
    goal of lowering prices and if it doesn't work then we'll make
    an adjustment.
        Senator Klobuchar. Do you want to add anything, Dr.
    Cockrell? Do you have your microphone on there?
        Dr. Cockrell. It is now. In our particular practice I
    continue to hear that they occupy the top three spots in 90
    percent of the marketplace. In our office--I checked before I
    came--on a monthly basis we order from between 10 and 15
    different manufacturers. There are over 90 manufacturers and
    each of them provide many different lenses, so we have hundreds
    of lenses available.
        So outside of these pressing policies of the big three that
    you've talked about, we can buy other products to do the same
    thing that may not fit the same, that may fit differently, may
    have different parameters.
        So there's a significant amount of competition in the field
    when you think about 90 different vendors for a lot of these
    products. There are specialty lenses that we order where
    there's only a handful because of the disease states I talked
    about, and things like that. So there's really a lot of
    competition.
        The other thing I would say on the competition, in our
    office, as I said, in some cases we charge lower, I think, than
    1-800 does. I'm certain that we do on some products, and some
    are probably higher. But there's also a part of competition
    that is value, and it's not just value, i.e. price, it's also
    service, as Dr. Knight said, those patients who find it
    convenient to purchase in her office while they're there, or
    those patients who like the care they receive in her office
    when the transaction takes place, or they want to be able to
    look across the counter and talk to somebody when they have a
    question about it. That's all part of the value of where they
    purchased those lenses as opposed to just shopping for what
    might or might not wind up being the lowest cost provider of
    that lens.
        The other thing that we find happens that we explain
    literally on a weekly basis, our staff does this, is the
    confusion over rebates. You know, I don't know what percentage
    of rebates are actually redeemed, but from what I've read
    across all industries it's pretty small.
        So you can have one price and then have a very big rebate,
    understanding that it's not going to be redeemed or that the
    majority are. We wind up making that explanation very
    frequently. So I think having one price eliminates a lot of
    price confusion and benefits the consumer overall, regardless
    of where that is, because it eliminates confusion.
        Senator Klobuchar. Okay.
        Senator Lee.
        Senator Lee. Dr. Knight, so you're saying that although
    prices may go up for some they may go down for others, but
    overall the objective here is to decrease the price paid by the
    typical contact lens consumer, and do you think that's what
    will happen?
        Dr. Knight. Yes, I do. And to comment to what Dr. Cockrell
    mentioned, in our estimates the number of consumers who
    actually redeem the rebates is about 6 to 8 percent.
        Senator Lee. Okay. Mr. Slover, what's your response to
    this, particularly the assertion that on the whole for the
    average customer, prices are going to go down as a result of
    the unilateral pricing policy?
        Mr. Slover. Well, I think for the cost-conscious consumers
    who are looking for the lowest price, that lowest price isn't
    going to be there anymore, so the prices for them are going to
    go up. I think there are a lot of consumers who are less cost-
    conscious, and for them the benefits of getting the contact
    lenses while they're at their doctor's office may be more
    important to them, and they should have that choice. But the
    consumers who need the extra money and are willing to shop and
    get the lower price ought to be able to do that.
        Senator Lee. I assume there are probably a lot of customers
    who become relatively attached to a particular brand of contact
    lenses and they don't want to change, necessarily. Does that
    have an impact on this? I mean, does that have an impact on the
    extent to which prices could go up?
        Mr. Slover. Well, I've heard that a lot of the
    prescriptions that are written are for a particular brand and a
    particular lens. To the extent that's the case, it puts a lot
    of the control in the optometrist's office. How that
    optometrist uses that authority will depend on the particular
    optometrist, but it has the potential to lower options for
    consumers.
        Senator Lee. Thank you.
        Do you want to follow up on that?
        Dr. Knight. Yes, if I may. I think more than brand, the
    modality of the lens is probably even more important. If I have
    a patient, for instance, who has a family history of macular
    degeneration or is at risk for cataracts, I'm going to be
    looking at putting that patient in a lens that maybe has a UV
    component to it, for instance, to protect their eyes from that
    particular situation.
        If I have a patient who has allergies, maybe the best
    modality for that patient might be to go into a lens that they
    dispose of on a daily basis to keep their eyes as clean and
    healthy as possible, and there are a variety of choices along
    that modality. So if a patient has a particular brand in mind
    that they're interested in I probably can find something along
    that line that would work for them, but more so than----
        Senator Lee. And is your ability to do that as an
    optometrist enhanced by UPP? I'm just trying to figure out how
    it ties in to unilateral pricing.
        Dr. Knight. Well, whether you have a unilateral pricing
    policy or not, that's something that I think should be first
    and foremost with most practitioners. It's not so much--Mr.
    Slover was speaking about brand issues. Brand issues are a
    factor, but the bigger factor is, what's the best type of lens
    to put a patient in, what's the best system to put them in
    first and foremost, and then you choose a brand.
        Senator Lee. Okay. Got it.
        Mr. Zeidner, what's your response to the point that the
    price, on average, to the consumer of contact lenses will be
    reduced as a result of this?
        Mr. Zeidner. We don't see how that can happen. Just to
    respond to some of the comments, every single prescription is
    written for a brand. That is required by law, so there is no
    choice by the consumer to change their brand. If they have a
    doctor that will allow them to ask for a specific brand for
    whatever reason they can, but they are locked into that brand.
        Senator Klobuchar. So, when they go on 1-800 CONTACT LENS--
    we're going to say it as much, you know, for your marketing. So
    when they do that, they have to have a prescription with them
    to get it?
        Mr. Zeidner. Yes, ma'am.
        Senator Klobuchar. Okay. Thank you.
        Mr. Zeidner. They have to have a prescription or we will
    verify it with the doctor's office, but it is always a brand.
    So there's no choice here. If it were about modality and the
    doctor said you need to have a 2-week lens that has these
    properties and then the consumer could choose the brand, that
    would be a competitive marketplace. That does not exist right
    now. That would be a competitive marketplace. This is really
    what we think the main issue is. We talk about and we mix these
    metaphors together about free riding and best buy, but this is
    not----
        Senator Klobuchar. Just to be very clear--do you love how
    I'm intervening?
        Senator Lee. It's okay, Madam Chair.
        Senator Klobuchar. I said there was a difference between
    that----
        Mr. Zeidner. No, no, no.
        Senator Klobuchar [continuing]. But it reminded me of some
    of those issues.
        Mr. Zeidner. And that is the difficulty.
        Senator Klobuchar. I didn't mix it up?
        Mr. Zeidner. No, no, no. And I'm not suggesting you do. We
    think consumers get mixed up that way because it is not a
    consumer product. You don't get to go and shop for the brand
    you want, you're told what brand you're going to get, then you
    go and shop for where you want to purchase it.
        That is being taken away because at this point, after UPP,
    you're prescribed a brand and you have to pay that price. So
    it's really not like any other consumer product, and that is
    because you have a medical professional who is selling what
    they prescribe in the office.
        It would be a lot more convenient if I could buy all my
    Lipitor or whatever from my doctor, but I can't because we
    don't allow that in medicine. But in this part of the market,
    we do. That's really the fundamental issue here, is because on
    the one hand we're talking about what's best for the patient,
    what they should be prescribed, on the other hand, where they
    can get the best price.
        Well, now all that's been concentrated into one gatekeeper,
    and that's the optometrist. Because with UPP, there's no way to
    get a lower price. The doctor tells you what you're going to
    wear and then he tells you you can't get it cheaper anywhere
    else.
        Senator Klobuchar. But couldn't the doctor charge a higher
    price?
        Mr. Zeidner. Absolutely. But then----
        Senator Klobuchar. But then wouldn't that make people go to
    1-800 CONTACT LENS to get a cheaper price?
        Mr. Zeidner. It would, but Dr. Knight just said that
    they're going to adjust their prices down to UPP, which every
    doctor could do that as well, too. But you can't go below UPP.
        Senator Klobuchar. Right.
        Mr. Zeidner. So we can't discount any more.
        Senator Klobuchar. I get it.
        Mr. Zeidner. It wouldn't make any sense for someone to want
    to come to us because we don't have--after this we won't have
    any lower price.
        Senator Klobuchar. Sorry.
        Senator Lee. Well, that's okay.
        By the way, can you tell me, or if not you can any of you
    tell me, why it is that there is not the equivalent in the
    contact lens industry of a generic prescription or of some kind
    of fungibility between brands?
        Mr. Zeidner. Well, it's an interesting question. What Dr.
    Knight was just saying is really an interesting option. If the
    prescription said the modality, you need to have a modality
    with these type of protections, you have this type of an eye,
    then the consumer could say, you know what, I want to check on
    prices and then fit me for a couple of these and I'll choose
    which one I want, then you would have competition at the
    consumer level but you don't have that now. This is a strange
    market. I don't know why we don't have those, I don't know why
    doctors sell them. It's a different market than any other
    medical product.
        Senator Lee. So taking your hypothetical one step further
    then, it's analogous, you would say, to what--not just going to
    a doctor and being told, I'm prescribing you Lipitor and you
    may now purchase that from me, but going to a doctor and being
    told, I'm prescribing you Lipitor, there is no generic
    alternative, there are no other alternatives anywhere----
        Mr. Zeidner. And the price is the same everywhere.
        Senator Lee. Okay.
        Mr. Zeidner. That's what the market's becoming.
        Senator Lee. Dr. Knight, did you want to--oh, and Dr.
    Cockrell, you wanted to respond also? Let's go in that order.
        Dr. Knight. Sure. The modalities is only a part of the
    scenario. The brands are not all the same, and so to make
    assumption that you can switch into a generic from one
    manufacturer to another is just faulty. The parameters are
    different, the materials are different, the oxygen content is
    different, the water content is different; they're different
    materials. Patients need to be fit with those lenses to
    determine what's best for them.
        Senator Lee. Okay. So that's why the law is the way it is,
    as a result of that, of those factors that you've just
    identified?
        Dr. Knight. Yes.
        Senator Lee. Dr. Cockrell?
        Dr. Cockrell. I'd like to comment. You know, when you talk
    about a generic medication like Lipitor, the bioavailability of
    a chemical has to be the same, the bioavailability of the
    molecule has to be the same. As Dr. Knight mentioned, today I'm
    wearing two different lenses from two different manufacturers
    because I cannot see well and can't feel good with the same
    lens and the same manufacturer.
        Senator Klobuchar. That would be called like advanced eye
    treatment.
        Dr. Cockrell. Absolutely. But really you can't have
    anything such as an equivalent curve or diameter because every
    single characteristic of that lens is different.
        Within these manufacturers, I'm not sure how many different
    lenses that Vistakon sells, or Cooper, but they sell many
    different lenses with many curves, many, many molecules that
    make up the actual chemical properties, and then you've got to
    put that on the eye.
        If it's a woman who's pregnant, as her estrogen level
    changes the curvature of the cornea can change, so maybe the
    contact that fit before she was pregnant no longer fits. If
    someone is above 55, most people have dry eye. Maybe the lens
    they could wear before, they think, ``I should still be able to
    wear it, now it's too dry and now I can't wear it.''
        So maybe the patient needs to go into a different modality,
    like Dr. Knight was talking about, where they had been wearing
    a lens that they replaced on a weekly, or 2-week, or monthly
    basis, and now the patient needs to replace that lens on a
    daily basis. There are so many different characteristics that
    must be considered.
        If you leave those decisions up to the consumer to say I
    want to pick Brand A because it costs less, then we get back to
    all that myriad of problems that I talked about that may result
    in bad healthcare for the patient and the problems that occur.
    It's no different than letting me pick out which orthopedic hip
    replacement that I want. To say, ``I want that one because it
    costs less'' is just faulty logic, to say the least.
        Senator Lee. I think I saw your hand go up. Did you want to
    respond?
        Mr. Zeidner. Yes. Just two quick things. The most popular,
    growing area of contact lenses is the daily lens. In fact,
    Novartis Ciba Vision's lens doesn't come in a base curve.
    Because it's so thin, it fits anyone that can wear it. So you
    don't have that in every contact lens.
        When you look at the 510(k) filings of the major
    manufacturers, what the FDA says is that the base curve is in
    this range, it's between this and this. The manufacturer
    chooses which number they want, and they all chose different
    numbers. So it does depend on the eye and on how it fits the
    person, but those numbers are set by the manufacturer and
    they're given a range.
        So it's not like they're made microscopically to that level
    of that exact--but it is a range and it does depend on how it
    fits the person's eye. But I think the point is very good, that
    if people want to be able to get a lower price, if Dr. Cockrell
    says that we don't want them choosing their own lens, what
    we've now done is just the opposite.
        We've told them, you can't choose where to buy them because
    it's the same price everywhere, so we've really taken away
    choice completely from the consumer. If it's a bad idea for the
    consumer to choose their lens, we think they should at least be
    able to choose what they want to pay for it and now they're not
    able to with these RPM policies.
        Senator Lee. Madam Chair, may I ask one more follow-up on
    that?
        Senator Klobuchar. Yes.
        Senator Lee. Mr. Slover, from--so let's take as a given
    what we've heard from these witnesses about the fact that, for
    whatever reason, for reasons medical or reasons just related to
    the way the law is, we do have a marketplace in which there is
    not--there is not a type of prescription a doctor can write;
    whether the doctor should or should not be able to write that
    is a different question and one probably far outside the
    jurisdiction of this committee.
        But given that a doctor cannot write a prescription for
    just a type of contact lens but has to write a prescription for
    a particular brand, a particular lens manufactured by a
    particular manufacturer, does that trigger special antitrust or
    consumer welfare concerns that might not exist elsewhere?
        Mr. Slover. Well, in listening to the other witnesses and
    the health considerations that they were discussing and the
    patient safety concerns that they were discussing, I agree with
    all of those. Consumers Union would take a backseat to no one
    in the importance of health and safety for the patients. I
    don't think the health and safety questions need to be
    connected to the marketing questions.
        The better those can be separated, the better for patients
    as consumers, I think. The 2003 law moved in the right
    direction toward separating those. I think the new pricing
    policies move in the opposite direction.
        I think for antitrust you're looking for choices for
    consumers here, and the fact that there are sort of some built-
    in limitations in the marketplace are the kinds of things that
    the antitrust investigators and the courts would take a look
    at, and I think those are all important. But the bottom line, I
    think, is trying to separate out those two sets of
    considerations.
        Senator Lee. Okay. Thank you very much.
        Thank you, Madam Chair.
        Senator Klobuchar. Okay. Well, thank you. This has been a
    very good hearing and we've learned a lot. It's clearly
    something where we'll know a lot more in terms of the pricing
    issues a few months from now, or 6 months from now--I don't
    know how long it will take--so that we should come back and
    look at this again because I know how much you guys like
    testifying anyway.
        I think we came in at this at a good time in terms of the
    fact that we're seeing this major change, and it could have an
    effect on consumers and that's why we have this committee. I
    realized as I was sitting here that I have to correct the
    record because I did wear a contact lens since my wedding--and
    I didn't know who made it, and it turned out it was you guys--
    when I had actually a condition that Dr. Cockrell is going to
    know is very bad called corneal abrasions for a period of
    years. Every so often I would have to put a Band-Aid contact
    lens on and they prescribed an ACUVUE, which turns out you guys
    make. So, there you go.
        And actually one very good ophthalmologist fixed it with
    Lasik so I no longer have this problem, but it makes it hard to
    wear contacts. So you never want to lie on the record, right,
    Senator Lee, in front of our witnesses, but I do want to thank
    all of you for being here.
        And again, this is a really important issue when you look
    at how many Americans wear contacts with a change in the
    pricing, possibly in response to the Supreme Court decision. I
    think it's really important that we keep our eye on this and
    see what the outcomes are going to be for consumers and
    continue to monitor this in the months to come.
        Do you want to add anything, Senator Lee?
        Senator Lee. Thank you very much.
        Senator Klobuchar. Okay. Thank you. This has been a
    productive hearing. We will keep the record open for 1 week for
    any additional submissions or follow-up questions. Thank you.
    The hearing is adjourned.
        [Whereupon, at 3:39 p.m. the hearing was concluded.]
        [Additional material submitted for the record follows.]

                                A P P E N D I X

                  Additional Material Submitted for the Record

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