More than half a decade after it began, a class-action lawsuit accusing several contact lens manufacturers of anticompetitive price fixing has finally come to a close.
The case ended with Alcon and Johnson & Johnson Vision agreeing to separate settlements that together equal $75 million. The proposals were initially put forth in April of this year and agreed to by all parties on Wednesday.
According to court filings, Alcon agreed to pay $20 million, while J&J Vision will dole out $55 million. They join previous settlements from Bausch + Lomb and CooperVision, which agreed to pay $10 million and $3 million, respectively, in 2019. In agreeing to the settlements, none of the four companies admitted to any wrongdoing in the case.
“The company has agreed to resolve this matter and will continue to focus on bringing innovative products to patients. We acted appropriately and responsibly in the marketing of our products, and this settlement is not an admission of liability or wrongdoing,” a J&J spokesperson told Fierce Medtech in a statement.
Alcon didn’t immediately respond to Fierce Medtech’s request for comment.
A separate filing on Wednesday determined that one-third of the combined $88 million settlement fees—plus another $1.6 million in costs and expenses—will be paid out in attorneys’ fees, totaling just under $31 million.
The class-action suit began in 2015. A later consolidated complaint filed in Florida district court in 2017 claimed that the four companies—among the largest makers of disposable contact lenses in the U.S.—had “conspired with each other” as well as with their shared distributor ABB Optical Group, the American Optometric Association and some independent eye care professionals to impose mandatory pricing schemes for some of their products, dating back to 2013.
The companies were accused not of fixing the prices of their contacts all at the same level but rather of conspiring to “eliminate discounting of contact lenses by ensuring that all retailers charged the same minimum price,” a move that still falls under the umbrella of price fixing, per the complaint.
That allegedly entailed setting minimum resale prices for certain contacts that would prevent them from being priced competitively by retailers like Walmart, Costco, 1-800-Contacts and more. As early as June 2013, per the complaint, the companies began notifying retailers of new minimum prices for several of their “most advanced and/or most popular lines of contact lenses,” while also threatening to “curtail the supply” of those products if retailers sold them at discounted prices.
Testimony in a 2014 hearing—before CooperVision had implemented its own alleged pricing scheme—estimated that the products targeted by the other three companies’ minimum pricing thresholds “encompassed 40% of the domestic contact lens market.” The “conspiracy” to slash discounts on those lenses, the plaintiffs said, led the tens of millions of Americans who wear contacts to pay “millions of dollars more” than they would have otherwise.
According to the plaintiffs, the contact lens makers had an interest in eliminating discounts “because they saw price-bargaining power shifting away from manufacturers towards big buyers.”
Independent eye clinics would also be interested in limiting competition, the plaintiffs said in the complaint, because they typically sell lenses at higher prices than traditional retailers. They simultaneously hold the power to prescribe specific brands and types of contacts, making them “the gatekeepers of the disposable lens market.”
The distributor ABB shared that interest, per the lawsuit, since it “is the largest distributor of contact lenses in the United States” and works with more than two-thirds of those clinics.
ABB reached a $30.2 million settlement of its own in 2020.
With all litigation now complete, eligible individuals in the U.S. who purchased certain contact lenses from any of the four companies between 2013 and 2018 and who previously registered claims online will soon receive payments from what’s left of the five defendants’ total $118.2 million pool of settlement funds after attorneys’ fees are subtracted.