[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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