Utah attorneys contend state can regulate contact lens prices even if customers are elsewhere

Economic Indicators Associated Press

Utah attorneys defending a hotly contested law banning minimum prices for contact lenses argued this week that the state has the right to regulate industry price-fixing even if the products are sold to customers elsewhere.

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Any sales by Utah-based retailers are in-state transactions, no matter where the contacts are shipped, the Utah Attorney General's Office said in court documents filed Thursday.

State attorneys specifically cite Utah-based 1-800 Contacts, one of the country's largest discount retailers, in their defense of the law.

Three of the nation's biggest contact lens manufacturers sued to block the law they say violates interstate commerce rules. Alcon, Johnson & Johnson and Bausch & Lomb argue it was written to help 1-800 Contacts in a bitter pricing war.

The three manufacturers sued to block the law and won a temporary injunction, but a federal appeals court allowed the law to go into effect in June.

The two sides are set to argue before the Denver-based 10th Circuit Court of Appeals in August.

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If Utah's law stands, it could have wide-ranging effects on the $4 billion industry.

The law bans pricing programs started by the lens manufacturers who threatened to pull their products from resellers like 1-800 Contacts whose prices dipped too low. The pricing policies have also been scrutinized by Congress, consumer advocates and other states.

The state of Utah has said the law is a legitimate antitrust measure that will bolster competition and help customers get lower prices. While 1-800 Contacts backed the measure when it was passed by Utah's Legislature earlier this year, lawmakers deny it was written specifically to benefit the company.

1-800 Contacts is one of several discounters who have started in recent years to take up a bigger slice of the contact-lens sales market, which has been long-dominated by eye doctors.