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Three of the nation's largest contact lens manufacturers call a Utah law banning price fixing a brazen overreach that would give any discount seller in the state an illegal end run around minimum prices set by the companies.
Alcon Laboratories, Johnson & Johnson and Bausch & Lomb asked a federal appeals court in Denver to solidify an injunction blocking the law in court documents filed Tuesday. They say the measure would violate interstate commerce rules by allowing discount sellers like the Utah-based giant 1-800 Contacts to ignore minimum prices on sales to customers all over the country.
"The brazen overreach of the Utah legislature and its Attorney General is unconstitutional," attorneys wrote. "Any national retailer that maintains operations in Utah can play the same game as 1-800-Contacts."
The Utah law could have wide-ranging effects on the roughly $4 billion contact lens market, which has some 38 million American consumers.
The Utah Attorney General contends that the companies are inflating contact lens prices and the law is a legitimate antitrust measure designed to make the marketplace more competitive and benefit customers.
The state wants the 10th Circuit Court of Appeals to lift a temporary injunction blocking the law, though they've been vague on how exactly the law would affect sales to out-of-state customers. No deadline has been set for the court to rule in the case.
The contacts manufacturers are appealing a decision from U.S. District Judge Dee Benson, who ruled last month that the law is a legal antitrust measure. They also take issue with a provision in the law that allows the state to sue any manufacturer that refuses to sell to a discount company, saying Utah is trying to control the way they do business.
The contact lens makers that dominate the market say the price minimums they began setting two years ago protect eye doctors from being undercut by discount sellers who don't offer the same expertise.
While many contact lens sales come from eye doctors, discounters have been making inroads in recent years, and 1-800 Contacts now holds 10 percent of the national market, according to court papers.
The manufacturers' pricing policies have also been scrutinized by Congress, consumer advocates and others.