The FTC’s Contact Lens Rule enforces competition and benefits consumers

This summer, the Federal Trade Commission (FTC) issued 37 letters to various contact lens prescribers warning them about potential violations of the Contact Lens Rule (CLR). Enforced by the FTC, the CLR allows anyone with an eye prescription to shop for contacts and glasses from businesses other than their local optometrist. A rare regulatory gem, it demonstrates the effective use of regulation to protect market forces that ultimately benefit consumers through lower prices and better options. To that end, it’s worth discussing what the CLR does, why it’s good regulation, and why it matters.

First, the CLR maintains that anyone who can prescribe contacts must provide patients with their prescription information without prompt and free of charge and cannot require a patient to buy contact lenses directly from them. This seems like a no-brainer—no doctor’s office would charge a patient just for a copy of a prescription or demand that they buy their medications onsite. But this was how optometrist offices have historically operated: patients have a consultation and select contacts or glasses while there.

Then came the competition.

As with most things, the advent of online retailers eventually threatened brick-and-mortar operations with their offers of delivery, better choice, and lower prices. Even prescribers faced competition from online retailers—especially for contacts, which aren’t cheap and don’t require a pharmacist to dispense. With companies able to record an individual’s prescription information, produce the contacts, and ship them directly from a warehouse, patients had something they didn’t have before: a choice.

Yet, prescribers could still hold onto prescription info and make it difficult for online retailers to verify it. The regulatory process eventually led to the CLR, heavily influenced by the Eyeglass Rule from decades earlier, which also protected competition. Both rules are relatively straightforward. They require prescribers to provide patients with their prescription information at no cost and prohibit them from conditioning exams or results on the purchase of contacts or glasses. However, that wasn’t enough to keep competitive forces at play; in 2020, the CLR was amended to require patient signatures verifying receipt of their prescription be kept on file for at least three years. This new paper trail would confirm compliance with the original CLR instead of relying on the equivalent of a pinky promise.

The CLR also imposes rules on online sellers. For example, they can’t make a customer’s contacts until they have verified the prescription with the prescriber. Verification requests must be clear and straightforward, and they must be recorded.  

Both sellers and prescribers have had qualms with the CLR. During the COVID-19 pandemic, before the rule was officially amended, prescribers warned that requiring patients to sign prescription releases was too burdensome because staff would need to disinfect pens between signatures. Sellers noted that prescribers generally don’t respond to verification requests, making it hard for them to complete the sale. These complaints are evidence that the CLR works to do exactly what it intends: It holds both sellers and prescribers to rules that ultimately deliver more options and lower prices to consumers, all while ensuring a certain level of safety. Of course, prescribers lament the profit loss—it’s hard to think of an industry that hasn’t changed because of disruptive technologies. And sellers prefer easier routes to closing a sale. In the case of contact lenses, since patient health and safety is a factor, putting basic parameters around prescription verification makes sense.

The recent round of FTC letters to prescribers shows that consumers care about CLR enforcement. Further, complaints like this are not new. Just two years ago, the FTC issued a round of 24 warning letters as a result of consumer complaints about prescription practices. The letters highlighted how prescribers were failing to provide required information like names of manufacturers and the trade name of the private label brand. Additionally, prescribers were responding improperly to prescription verification requests by providing only general details and failing to provide prescription information within the 40 business-hour time limit. The FTC letters reminded prescribers of these obligations and advised them to “cease and desist from engaging in any acts or practices that violate the [CLR]” or face penalties of up to $50,120 per violation.

While this warning worked for a while, more letters were sent out earlier this year to warn prescribers of potential violations and remind them that charging an additional fee or requiring patients to sign a waiver to receive their prescription is strictly prohibited under the CLR. Many consumers complained about centers charging those additional fees. An investigation found that some consumers were indeed being charged a fee, but that it was due to miscommunication by employees who didn’t fully understand the CLR’s requirements and proper applications.

These repeated instances of noncompliance show that the CLR is necessary, as it encourages competition that ultimately benefits patients and provides regulations and guidelines that keep bad actors under control. It’s clear that optometrists have a history of making access to prescriptions a difficult and time-consuming process, sometimes even charging outrageous fees. The CLR keeps optometrists and online sellers in check by reinforcing competition and giving consumers access to their prescriptions at no cost so they can decide what works best for them and their families.