Contact Lens Antitrust Lawsuit Settled - Lens Wearers Eligible for Benefits

Johnson & Johnson to pay up to $60 million and provide consumer rebates.

DES MOINES-- Attorney General Tom Miller said Wednesday that purchasers of contact lenses are eligible to receive cash rebates on future lens purchases and eye exams under a proposed settlement with Johnson & Johnson Vision Care, Inc. Johnson & Johnson was a defendant in an antitrust action brought by 32 states and other parties against three contact lens manufacturers and the American Optometric Association.

Miller said: "Our lawsuits alleged that retail prices of disposable contact lenses were too high because Johnson & Johnson and the other defendant manufacturers violated antitrust laws by illegally agreeing with the American Optometric Association that the companies' lenses would be available only from eye care professionals (optometrists, ophthalmologists and opticians), retail optical stores, or mass merchandisers."

A federal district court judge in Jacksonville FL gave preliminary approval late yesterday to the Johnson & Johnson settlement agreement, Miller said. A trial on the matter had begun March 19.

Johnson & Johnson has denied participating in the alleged agreement and has denied that its actions have caused retail prices of replacement contact lenses to be above competitive levels.

Iowans who bought replacement contact lenses from Johnson & Johnson, Bausch & Lomb, or CIBA Vision at any time since January 1, 1988, are eligible to receive rebates under the proposed settlement with Johnson & Johnson. Acuvue®, SeeQuence®, Focus®, and NuVues® are among the brands sold by these manufacturers. Bausch & Lomb and CIBA Vision reached earlier settlements with the States.

"More than ten percent of Americans wear contact lenses," Miller said, "and Johnson & Johnson, Bausch & Lomb and CIBA make the most widely sold brands. Many people will be eligible, and we hope they will take advantage of the settlement benefits."

Consumers may be eligible for benefits under the proposed settlement with Johnson & Johnson and under the proposed settlement reached with Bausch & Lomb. Most consumers will take advantage of benefits when they buy replacement lenses.

Under the proposed settlement, Johnson & Johnson guaranteed to provide at least $30 million of rebates to consumers. Similarly, Bausch & Lomb guaranteed to distribute at least $9.5 million of rebates and coupons. If less than the guaranteed amounts are distributed, each manufacturer agreed to pay into a settlement fund the difference between its guarantee and the amount actually distributed.

The Johnson & Johnson consumer benefits package will include $50 off the purchase of four six-packs of disposable lenses and $25 off the cost of an eye examination by an eye care professional, plus an additional $25 off a future purchase of four or more lens six-packs. Four six-packs of lenses can cost consumers anywhere from about $75 to $100 or more.

The Bausch & Lomb settlement announced in February also provided benefits to consumers who buy replacement lenses from Bausch & Lomb. Consumers who purchased replacement contact lenses from ANY of the defendant lens maker companies since January 1, 1988, will be eligible for a rebate and benefit package from Bausch & Lomb valued at $120, most in the form of cash rebates on future purchase of Bausch & Lomb replacement lenses. Consumers will not need proof of purchase.

For claim forms and more information on the settlements, consumers may call the companies' toll-free numbers or go to their web sites. Johnson & Johnson: 1-888-437-1294, www.acuvue.com, and Bausch & Lomb: 1-888-707-5880, www.freecontactlensrebates.com.

Johnson & Johnson also agreed to pay up to $5 million in cash or coupons to consumers who had worn Johnson & Johnson contact lenses but no longer do so. Those consumers will have the choice of $35 in cash or $50 in coupons upon filing an appropriate claim form with proof, such as a valid prescription or proof of payment for Johnson and Johnson disposable lenses, or a statement by an eye care professional that the claimant once wore lenses. A full description of the criteria for payment is contained in the notice and claim form.

In addition to offering consumers the benefits package, Johnson & Johnson also agreed to pay $25 million in cash into a settlement fund. In prior settlements in the litigation, Bausch & Lomb agreed to pay $8 million in cash and CIBA agreed to pay $5 million.

The Court also gave preliminary approval Tuesday to settlements with the American Optometric Association and 13 individual optometrist defendants. The AOA agreed to pay $750,000, and 13 individuals agreed to pay $8,000 each.

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Note: The settlement also provided detailed injunctive provisions about how the defendants would have to alter their practices:

Both Johnson & Johnson and Bausch & Lomb agreed to change their distribution practices regarding pharmacies, mail order, and other "alternative" channels of trade. The injunctive relief in the Johnson & Johnson settlement provides that for a period of five years from the date the settlement agreement becomes final, the company will sell and distribute its replacement contact lenses to "alternative channels of distribution" in a commercially reasonable and non-discriminatory manner. The requirement applies provided the alternative channel, "like any other authorized account, will sell contact lenses only to consumers based upon a valid prescription and in compliance with all federal and state laws and regulations regarding the sale or dispensing of contact lenses," and agrees not to substitute diagnostic lenses for a revenue-producing product. Bausch and Lomb agreed to substantially similar terms.

The American Optometric Association agreed not to ask any contact lens manufacturer to refuse to sell lenses to any type of distributor, or encourage optometrists to refuse to write prescriptions for any manufacturer because its lenses are sold by outlets other than eye care professionals. The AOA also agreed not to make unfounded claims linking eye health problems with the channel of trade from which contact lenses are bought, and not to oppose the release of contact lens prescriptions to consumers on request, except on valid medical grounds and as consistent with state law. The AOA will publish a letter from its president in the AOA News setting forth these agreements.

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