- Associated Press - Wednesday, May 27, 2015

SALT LAKE CITY (AP) - Utah state attorneys have asked an appeals court to clear the way for a contentious law that bans price fixing by contact lens makers and could have wide-ranging implications for the $4 billion industry.

The Utah Attorney General’s Office argued in court documents that the law banning minimum prices set by the country’s biggest contact lens makers is an antitrust measure designed to increase competition and help customers.

State attorneys asked the 10th U.S. Circuit Court of Appeals in Denver to lift an injunction blocking the law Tuesday. They were joined by the discount retailers Costco and Utah-based 1-800 Contacts.

Suing to block the law are lens makers Alcon Laboratories, Johnson & Johnson and Bausch & Lomb. They say minimum price are good for customers and eye doctors, and the law was written specifically to benefit 1-800 Contacts.

According to the lens makers, the law would allow one of the country’s largest contact lens retailers to sell improperly discounted contacts across state lines, a violation of interstate commerce rules.

State officials deny the law was written to help 1-800 Contacts, but they’ve been vague on how it would affect sales to out-of-state customers.

At stake is control of a roughly $4 billion market with some 38 million American consumers.

Many contact lens sales come from eye doctors, who issue prescriptions that are brand- and model-specific. But discount retailers have grown in recent years, and 1-800 Contacts has captured about 10 percent of the national market, according to court papers.

The nation’s largest lens manufacturers started setting minimum prices about two years ago and telling retailers they would yank the products if the lenses sold too cheaply. The companies say the program protects eye doctors from being undercut by discounters that don’t offer customers the same level of expertise.

The law allows the state attorney general to sue lens makers if they refuse to sell to Utah companies.

Though U.S. District Judge Dee Benson allowed the law to take effect earlier this month, the companies appealed, and the 10th Circuit granted a temporary injunction last week.

Attorneys for the lens makers are scheduled to file counter-arguments to keep the law at bay next week.


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