JOHNSON & JOHNSON AGREES TO CONTACT
LENS ANTITRUST CASE SETTLEMENT
Baltimore - Attorney General J. Joseph Curran, Jr. announced today that purchasers of contact lenses will receive cash rebates on future lens purchases and eye exams under a proposed settlement with Johnson & Johnson Vision Care, Inc. Johnson & Johnson was the last non-settling defendant in an antitrust action brought by Maryland, 31 other states and a private consumer class against contact lens manufacturers and the American Optometric Association (AOA). The 1996 lawsuit alleged that retail prices of replacement contact lenses were too high because Johnson & Johnson and the other defendant manufacturers agreed with the AOA, in violation of the antitrust laws, that their lenses would be available only from eye care professionals. Plaintiffs alleged that because of the illegal agreements consumers had difficulty in purchasing lenses through the mail or from pharmacies and mass merchandisers.
Maryland residents who bought replacement disposable contact lenses from Johnson & Johnson at any time since January 1, 1988 are eligible to receive $50 toward the purchase of four or more multi-packs of disposable contact lenses, a six months’ supply that usually retails for between $80 and $100. In addition, a lens wearer will receive $25 off a second purchase of four multi-packs plus $25 off the cost of an examination by an eye care professional. Accuvue and Surevue are the brands of disposable lenses sold by Johnson & Johnson.
Under the proposed settlement Johnson & Johnson guaranteed that it would distribute at least $30 million worth of rebates to consumers. Similarly, in an earlier settlement already preliminarily approved by the Court, Bausch & Lomb guaranteed to distribute at least $9.5 million in rebates to consumers. 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.
In addition to offering consumers the benefits package, Johnson & Johnson also agreed to pay $25 million in cash into a settlement fund. Bausch & Lomb had previously agreed to pay $8 million in cash. In prior settlements in the litigation, the AOA agreed to pay $750,000 and 13 individuals agreed to pay $8,000 each.
Johnson & Johnson also agreed to pay up to $5 million in cash to people who no longer wear Johnson & Johnson contact lenses. Those consumers will have the choice of $35 in cash or $50 in coupons upon filing of an appropriate claim form. Plaintiffs will seek to establish from the settlement funds, a similar fund for people who used to wear Bausch & Lomb and CIBA lenses. In addition, the settlement funds established by the defendants will be used to pay for the costs of the litigation.
As a key component of the settlement agreement, Johnson & Johnson and Bausch & Lomb will change their sales practices. Johnson & Johnson will sell disposable lenses to mail order houses, pharmacies, mass merchandisers buying clubs and department stores for resale to consumers, provided that these companies re-sell only to consumers with a valid prescription, comply with all federal and state laws regarding the dispensing of contact lenses, and agree not to substitute diagnostic lenses for a revenue- producing product. Bausch & Lomb agreed to substantially similar terms.
"This settlement provides an immediate benefit to consumers who may have paid more for lenses because of the defendants’ actions and it also provides long term price benefits because consumers will have more choices of where to buy their replacement lenses," Attorney General Curran said.
All the defendants in this litigation deny that their actions were as a result of illegal agreements and that prices to consumers were higher as a result. Trial of the case against Johnson & Johnson and the AOA, begun on March 19, 2001 in Jacksonville, Florida, ended with a settlement after five weeks of trial.
Replacement lenses are those lenses consumers buy after they are fit with an initial pair of lenses. More than 10 percent of Maryland residents wear contact lenses.
Eligible consumers may receive benefits both under the proposed settlement with Johnson & Johnson and under a proposed settlement reached with Bausch & Lomb in January. Consumers can get more information on the lawsuits and the settlements or register for the benefits package at either http://www.freecontactlensrebates.com, or www.acuvuerebates.com. Consumers can also call 1-888-707-5880 or 1-888-437-1294. The federal court will consider whether to approve the settlement at a hearing in Jacksonville, Florida today.