Wal-Mart.com Enters Contact Lens Business

Congress Seeks to Increase Contact Competition

September 11, 2003
Retailing giant Wal-Mart has entered the online contact lens business. Wal-Mart, the world's largest company, already sells contacts in about 1,800 stores and is now promising quick turnaround on online orders.

The announcement coincides with Congressional consideration of a bill that would require that sellers of contact lenses verify the accuracy of the consumer’s lens prescription with the optometrist or ophthalmologist who wrote the prescription. It would also require that optometrists and ophthalmologists provide contact lens wearers with copies of their prescriptions.

About 34 million Americans wear contact lenses. Wal-Mart's immense buying power enables it to offer rock-bottom prices, making it a threat to other players in any industry it enters.

Those most likely to be hurt by Wal-Mart's latest move include local optometrists, established online contact suppliers and chain stores such as Pearle Vision and Sterling Optical.

Wal-Mart says that orders filed with its Web site will be filled within one to two days and the lenses will be shipped either to the customer's home or to the local Wal-Mart store's vision center.

Contact lens brands available on www.walmart.com include Johnson & Johnson's JNJ.N Acuvue and Acuvue 2 and Focus Dailies, made by Novartis AG's NOVZn.VX CIBA Vision unit.

H.R.2221, the “Fairness to Contact Lens Consumers Act,” was introduced by Rep. Richard Burr (R-NC). Burr says its major goal is to require eye doctors to give patients their contact lens prescriptions. (Currently, eye doctors are only required to give patients their eyeglass prescriptions).

Additional provisions include:

• Set a 1-year floor for the expiration length of a contact lens prescription and allow state flexibility beyond that requirement. (States have varying expiration lengths from 1-2 years.)
• As found in the current eye glass rule: a) eye doctors cannot require payment for the release of a prescription and, b) their liability on the content of the prescription is not waived by releasing it to the patient.
• Make it against the law to represent that patients can receive prescription contact lenses without a prescription.
• Require the FTC to study the different prescription verification processes around the U.S. and report back to Congress in 9 months.
• Define "contact lens fitting" and "contact lens prescription."

Testifying before the House Energy and Commerce Committee, the Federal Trade Commission said it supports the goal of promoting greater competition among contact lens sellers and enhancing consumer choice.

“Competition among contact lens sellers benefits consumers through lower prices, greater convenience, and improved product quality,” said Howard Beales, Director of the FTC’s Bureau of Consumer Protection.

In 1988, the FTC challenged advertising restrictions on eye care goods and services by the Massachusetts Board of Registration in Optometry concluding that the restrictions didn’t serve any legitimate purpose and were anticompetitive. The agency ordered the board to stop restricting the advertising, thereby increasing competition among sellers, and reducing costs and increasing choice for consumers.

“Increased competition among sellers through advertising, however, does not benefit consumers if the claims made in the ads are false or misleading,” Beales said. “To prevent such claims from being made in the marketplace, the FTC sued sellers who made deceptive advertising claims for eye care products.:

The testimony cites recent settlements with two of the largest LASIK eye surgery services that bar unsubstantiated claims that the surgery eliminates the need for glasses or contacts for life and that LASIK surgery is less risky than wearing contact lenses. “Our cases have enhanced the ability of consumers to make better-informed choices concerning eye care products,” Beales said.

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