It has been one year since Vistakon became the last defendant to settle federal litigation that charged Vistakon, the AOA, CIBA Vision, Bausch & Lomb and others with violating antitrust laws. What effect will this settlement really have? Phil Keefer, president of Johnson & Johnsons Vistakon unit, says eye care practitioners can now enjoy a level playing field when it comes to dispensing contact lenses.
In an interview, Mr. Keefer acknowledges that the contact lens industry is in a state of transition, with more patients wanting to obtain replacement lenses without having to return to their eye doctor. But that doesnt change the fact that its a medical device and requires a prescription, Mr. Keefer says.
So, Vistakon settled the suit by agreeing to sell its Acuvue brand lenses to alternative distributors, but only if they agree to dispense the lenses after receiving a valid prescription, comply with all federal and state contact lens dispensing laws, and agree not to sell Vistakons diagnostic lenses.
The 32 state attorneys general who filed the suit accused Vistakon and the other defendants of conspiring to restrict competition from alternative contact delivery channels to drive up consumer prices of replacement contact lenses. As part of the settlement agreement, these same attorneys general must enforce their state laws that govern contact lens dispensing.
Since the settlement, Vistakon has received applications from alternative distributors, and is confirming that those companies obtain written verification of prescriptions before shipping lenses, Mr. Keefer says.
Last December, Vistakon authorized Lens Express as one of its accounts in 40 states. Weve spent a lot of time verifying by making purchases in the various states [that Lens Express] is in fact requiring a valid prescription, not just calling and leaving a recording Mr. Keefer says.
One alternative distributor who has not applied to become a Vistakon account: 1-800 Contacts. J&J has accused 1-800 Contacts of making false statements about Vistakons products in promotional materials, and prominently picturing Vistakons products in advertising and on its Web site without disclosing that it had a limited supply of Acuvue lenses. J&J filed suit in October, and a U.S. District Court judge has granted J&Js request for a temporary injunction against 1-800 Contacts.
On another front, Vistakon plans to launch a program later this year to help practitioners develop their own Web sites, from which patients could order replacement lenses with a credit card. But the doctor would be in charge of ensuring that the patient will, in fact, have a valid prescription to get lenses, Mr. Keefer says.
