DENVER (AP) - Contact lens makers struggled Thursday to defend their pricing policies in a federal appeals case that could have wide-ranging effects on the $4 billion industry.
DENVER (AP) — Contact lens makers struggled Thursday to defend their pricing policies in a federal appeals case that could have wide-ranging effects on the $4 billion industry.
At issue is a Utah law banning minimum prices for contact lenses. The nation's largest contact lens companies asked the 10th Circuit Court of Appeals in Denver Thursday to strike down the measure. They say it was crafted just to help a homegrown discounter, 1 800 Contacts.
But a three-judge panel grilled the contact lens lawyers about why they don't simply stop doing business in Utah if they insist on price minimums.
A lawyer for Utah accused the contact lens makers of nationwide price-fixing and said that lens prices would drop as much as 35 percent nationally if the manufacturers dropped price minimums.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
A legal battle over a hotly contested Utah law banning minimum prices for contact lenses is set to come before a federal appeals court on Thursday.
The nation's largest contact lens companies are asking the 10th Circuit Court of Appeals in Denver to strike down the measure that could have wide-ranging effects on the $4 billion industry amid an increasingly bitter pricing fight.
Alcon Laboratories, Johnson & Johnson and Bausch & Lomb call the law a brazen overreach written specifically to help Utah-based discount seller 1-800 Contacts.
Utah lawmakers deny that. The state's attorney general contends that the contact lens makers that dominate the market are wrongly driving up prices and the law is a legitimate anti-trust measure.
The manufacturers are appealing a ruling from a federal judge in Utah. After temporarily blocking the law earlier this year, the 10th Circuit allowed the measure to go into effect as the case unfolds.
1-800 Contacts, one of the country's largest discount sellers, has since dropped their prices by up to $15 a box on some brands that were subject to the manufacturers' minimum prices.
The contact lens manufacturers say the Utah law violates interstate commerce regulations because it allows 1-800 Contacts to ignore price minimums in online sales to customers outside state. Utah argues those are considered in-state transactions, no matter where the customer is.
The contact lens makers started setting minimum prices about two years ago to protect eye doctors from being undercut by discount sellers. If a company sells at too steep of a discount, the manufacturers pull their products.
Though most contact sales still come through eye doctors who bring the manufacturers new customers with brand-specific prescriptions, discounters have taken a bigger slice of the market in recent years.
The companies say the pricing policies are good for customers, but they've also been scrutinized by Congress, consumer advocates and others.