(Peter Ferrara, Investor’s Business Daily) – No one likes going to the doctor’s office, but the American people should be more apprehensive about their appointments than ever before. Apparently, eye doctors aren’t seeing 20/20 themselves, even with their corrective lenses on.
The problem? Eye doctors are intentionally disobeying the consumer protection laws that are currently on the books to restrict consumer choices. Some ophthalmologists and optometrists are refusing to give patients copies of their prescriptions, in effect forcing them to purchase lenses directly from their offices at inflated prices.
Their actions come in direct violation of the Contact Lens Rule of 2004, the legislation that Congress “prescribed” for the industry to stop this exact malpractice from occurring. This bill mandates that doctors give patients copies of their prescriptions and allows third party vendors to fill orders so long as the prescriber doesn’t flag a health concern within one business day.
The stubborn and greedy medical lobby isn’t very happy that the law gives consumers this purchasing freedom. They fear that third party vendors like Wal-Mart, Costco and 1-800 Contacts will eat into their market share. As a result, eye doctors have taken off their corrective lenses and are pretending as if they’ve never seen the fine print in their own rule books.
For this reason, the FTC recently stepped in with a new proposal that will strengthen Congress’ original prescription for these doctors’ vision problems. The new rule will ensure that doctors are following the 2004 Contact Lens Rule by mandating that they receive a signed form from each patient signifying that they received a copy of their prescription at the appointment.
The FTC’s new rule is sorely needed for the purposes of restoring free market prices and competition to the contact lens industry. It will prevent companies like Alcon, Bausch & Lomb, CooperVision, and Johnson & Johnson — which have captured about 97% of the contact lens industry — from rigging prices upward by strangle-holding the market.
Let me be clear: I am not against natural monopolies.
President Ronald Reagan, my former boss, admired them. He did not support Teddy Roosevelt, William Taft and John Sherman’s assault on efficient businesses through the “big stick” power of antitrust law, nor do I. If a firm receives significant business because it offers higher quality or lower priced goods than its competitors, then we should by no means interfere.
The problem in the contact lens industry is that companies like Johnson & Johnson do not have a natural monopoly — they have, as a result of burdensome government mandates, a government-created one. Johnson & Johnson does not boast 40% of the industry’s market share because it is more efficient than its competitors; the reason it sells so many lenses is because the law states that consumers need a prescription, and eye doctors are taking advantage of their prescribing powers by forcing consumers to purchase Johnson & Johnson’s Acuvue lenses.
This is an assault on the free market, and it’s why the new FTC rule needs to be put into law as soon as possible. Consumers should, without question, have the ability to shop away from the doctor’s office for lenses.
In truth, this monopoly problem could also be solved another way: By waiving the eye-care prescription mandate, the only vehicle that eye doctors have to holding up the industry.
This idea is not as radical as it seems. In Japan and nearly all of Europe, prescriptions aren’t required to purchase lenses, and both countries have not seen any increase in eye-infection numbers since waiving the mandate.
Should the prescription mandate be removed, consumers would have the ability to fully utilize up-and-coming smartphone apps like GlassesOn and Opternative, which have been scientifically proven to determine eye needs as accurately as a traditional eye exam.
By empowering consumers to make their own choices, patients could then begin going to the eye doctor’s office just once every two years instead of every time a lens refill is needed. Even the American Optometry Association, the group leading the push for more regulations, admits that this is all that is necessary for healthy adults aged 18 to 60.
Instead of working to increase consumer access, optometry boards like California’s are using state tax dollars to wage a public relations war against companies like Opternative because they don’t like the competition that they bring to the table. Groups such as Johnson & Johnson and the American Optometry Association are also attempting to increase their monopoly powers by asking Congress to pass a protectionist bill.
The bill, the Contact Lens Consumer Health Protection Act (CLCHPA), will completely scrap the Contact Lens Rule of 2004. It will allow eye doctors to indefinitely hold up third party sales by simply refusing to respond to vendors’ transaction requests.
Yes, you saw that correctly: As a way of stopping valid lens sales from companies they don’t like, doctors will have the ability to “pocket veto” the transactions by refusing to give a yes or no answer on the filling request. If the CLCHPA goes into effect, doctors won’t have to go on the record as for why they refused to fill the order, and that’s a major issue.
The current myopic perspective on free market competition that many of our eye doctors seem to have is causing great distress for our nation’s 41 million contact lens users, and it needs to be corrected immediately with the FTC’s laudable “prescription” before any further damage to the industry is done.
To parrot the words of my former boss: Growth, prosperity and human fulfillment are created from the bottom up, not the government down. If we want the contact lens industry to blossom into something great, then we need to make sure that the excessive government mandates and occupational licensing laws that are stifling the industry are minimized. That means fixing the problem at hand with the FTC’s clarification to the law, not adding further rules to the books.
Let’s hope that the Republican-controlled Congress stands its ground and ensures that the free market will be allowed to produce cheap and affordable contact lenses for all. After all, it’s why the American people gave them control of both the executive and legislative branches in the first place.
Ferrara is senior fellow for budget policy and entitlement reform for the Heartland Institute and senior policy advisor for budget and entitlement reform at the National Taxpayer Limitation Foundation. He served in the White House Office of Policy Development under President Reagan, and as associate deputy U.S. attorney general under President George H.W. Bush.
Column originally appears at Investor’s Business Daily.