A federal appeals court ruling in the US could have major ramifications for the country’s $4bn contact lens market after giving online discount contact lens retailers the green light to drop prices while manufacturers are locked in a legal battle to impose minimum prices on their products.
The 10th Circuit Court of Appeals in Denver handed down the judgement as Alcon Laboratories, Johnson & Johnson and Bausch+Lomb remained at loggerheads with the state of Utah over the new legislation which banned contact lens price fixing.
According to a report in the Winnipeg Free Press, the manufacturers believed that the law allowed discount sellers to violate interstate commerce regulations and circumvent industry price standards.
The Contact Lens Consumer Protection act, which banned manufacturers from using unilateral pricing polices (UPP) to set minimum prices, was backed by a number of retailers, including Utah-based discount seller 1-800 Contacts.
Utah's attorney general said the companies were wrongly driving up prices, and the law was a legitimate anti-trust measure designed to enhance competition and help customers.
1-800 Contacts described the ruling as another victory in the battle to offer lower prices to consumers and that it planned to drop its prices imminently.
Alcon Laboratories said it was extremely disappointed and that the law contravened interstate commercial rules. Johnson & Johnson said it was planning its appeal and that minimum price structure was legal.
The ruling means the law will go into effect while the legal battle makes its way through the courts. The case will be fast-tracked and was scheduled to begin later in June.