ANNUAL REPORT

Contact Lenses

By Joseph T. Barr, OD, MS, FAAO
January 2001

Our yearly snapshot of the contact lens industry, including major events, new products and glimpses into the future.

In Neil Bailey's first Contact Lens Spectrum in 1986, the hot topics were:

• The concern about hydrogel contact lens extended wear ulcers
• FDA approval of Boston IV material
• Concern about PMMA safety
• Superpermeable RGP lenses for extended wear
• Flat contact lens sale
• Lens care solution pH
• Tears, contact lenses, and AIDs (Note: no transmission via contact lenses has been established)

Have we made progress in the last 15 years since Contact Lens Spectrum was first published? Absolutely. We know much more about extended wear and have new materials for safer extended wear. RGP materials and lens quality are better than ever. Contact lens solutions are better than ever, including better comfort and ease of use. Contact lens sales are predicted to grow even in the saturated North American market until at least the middle of this decade, and growth elsewhere on the planet will be substantial.

The Big Picture

First Wesley Jessen and Ocular Sciences Inc. tried to merge. Then CIBA Vision attempted to buy Wesley Jessen. Then Bausch & Lomb tried to buy Wesley Jessen. In the end, Wesley Jessen, founded over four decades ago, was purchased by CIBA Vision, and OSI ended up with $25 million. Novartis transferred its pharmaceutical business out of the CIBA Vision contact lens and solutions business.

Bausch & Lomb reorganized and successfully launched the B&L Two-Week Lens. Vistakon finally launched their disposable toric soft contact lens. High double-digit growth of new fits of toric and especially disposable toric lenses continued in 2000. Even higher growth was evident for bifocal contact lenses. No conventional wear lenses remain in the top 20 sellers at the end of 2000.

Total soft contact lens new fits were up eight percent in the first nine months of 2000. There are perhaps three percent more new wearers in the United States and perhaps six percent fewer RGP wearers. Table 1 illustrates the usage patterns for U.S. contact lens wearers.

Mail Order

Biocompatibles reported in early 2000 that it found that 72 percent of contact lens patients surveyed agreed that shopping around for best price was worth their while, 40 percent thought soft contact lenses were all pretty much the same and 51 percent had purchased lenses from sources other than their original prescribing practitioner (13 percent mail order, 18 percent mass merchandiser and 38 percent from a practitioner other than their prescriber.) In this survey only 57 percent thought their eye doctor kept them up to date on new technology, and only 17 percent thought annual eye examinations were important. Of the patients who wore a lens recommended for replacement every two weeks, only 38 percent replaced their lenses this frequently.

According to Forbes, 1-800 CONTACTS netted $6.1 million in 1999. In 2000 they were expected to have sales of over $100 million. I can remember when $6 million was a good-sized contact lens company, and now 1-800 is just an unnecessary distributor. With 26 states legally requiring contact lens prescription release, and 1-800 CONTACTS admitting in their company literature that they violate state laws, there is little relief from competition for the sale of contact lenses. (See related stories on Pages 3 and 52.) Legal action in at least California, Texas and Kansas could challenge 1-800.

The $600 million, 32 attorneys general antitrust suit against major manufacturers and the American Optometric Association goes to court in Florida in March of this year. CIBA Vision has already settled and sells to some mail order firms. Johnson & Johnson/Vistakon, Bausch & Lomb and the American Optometric Association will go to battle against the attorneys general this March.

Until these suits are settled and beyond, inappropriate filling of contact lens prescriptions will continue unless we can prove it is unsafe practice, and each state takes action. Such situations create negative perceptions about how worthwhile contact lens dispensing is to the eyecare practitioner. Many practitioners have adopted numerous methods to prevent this practice, including practitioner-directed manufacturer shipment of lenses to patients and selling a 12-month supply at the time of fitting or annual examination of contact lens patients.

The FDA looked into illegal web-based sales of healthcare products, but contact lenses are only one of these products. The Contact Lens Institute considered proposing legislation to require anyone selling contact lenses to have a hard copy or call the practitioner to insure the prescription was valid.

Bifocal Lens Use Soars

Led by Acuvue Bifocal and CIBA Vision's Focus Progressive multifocal, annualized bifocal contact lens total dispenses growth was 30 percent. Numerous other multifocals including: Acuity One 4Cycles (like UltraVue multifocal), LifeStyle Toric Bifocal, Lens Dynamics Presbylite, X-Cel Solutions, Blanchard Essentials, Art Optical MagniClear, Tru-Form Optics Triune, GP Specialists Nulife, MetroSeg, MetroFocal Toric, Unilens Quantum Thin and EMA have helped lead this growth. Wesley Jessen had planned to introduce the Freshlook Progressive bifocal. Where this growth will stabilize is hard to predict with four million new American presbyopes per year entering the market. CIBA Vision may introduce a Focus Progressives daily disposable lens this year in the United States.

Soft Torics ­ Better Than Ever

Cooper was overall number one in market share with its many designs, including new two-week Encore Toric. Then WJ joined CIBA Vision, making the combined company number one. Vistakon's Acuvue Toric and B&L's SofLens 66 Toric received high marks from practitioners in 2000. Ocular Sciences Inc. plans to introduce a toric lens soon.

Extended Wear Market

Surveys indicate that nearly two-thirds of potential extended wear contact lens patients would use these lenses if they were recommended by an eyecare professional. PureVision, Bausch & Lomb's high Dk silicone hydrogel lens approved for extended wear up to seven days, although commonly perceived as a good contact lens, has not overcome the vast negative perception in the eyecare practitioner community about the risk of corneal ulcers. It is likely that CIBA Vision (Night and Day Lens outside the United States) and B&L will pursue FDA approval for 30-day extended wear this year. This competition, coupled with practitioner education about this improved technology, consumer advertising and/or perhaps lower price could change attitudes about extended wear.

The FDA is likely to require post market surveillance of these new lenses to track if ulcer rates in extended wear with these new lenses exceeds an acceptable risk. If nearly 10 percent of soft contact lens wearers in the United States typically wears lenses for extended wear and at least five times that many do so occasionally whether they should or not, it is likely that with even a slight paradigm shift toward acceptance of 30-day continuous wear, up to 30 percent of spherical soft contact lens wearers may accept this modality within this decade. Nearly half of the 18-to-35-year-olds recently surveyed did not know they could sleep in some contact lenses, and over 60 percent didn't know they could achieve 20/20 vision with contact lenses. Targeted marketing to this group could ramp up the interest in extended wear.

Other Soft Contact Lenses

OSI launched its Hydrogenics 60 UV lens on a limited basis. LaJolla Diagnostics (whose chairman is former Hydrocurve developer Don Brucker, OD) introduced the NatureWell Contact Lens in cooperation with UltraVision. Wesley Jessen continued to promote more varieties of its Wild Eyes lenses, and Cooper Vision entered the "fun" lens category with Crazy Lenses. ChromaGen lenses were FDA approved, and the company claims they are useful for dyslexia and color anomalies. Softchrome, Inc. offers an in-office soft contact lens tinting system.

RGPs

Early in 2000, after previously deciding to exit the U.S. market, Menicon chose to continue supplying contact lenses and solutions on an uninterrupted, but limited, basis until it returns to full U.S. operations sometime in the future.

Visions, a spherical, inventoried lens made from Paragon's HDS material and shipped as a pair in soaking solution in vials, was successfully launched in early 2000 by X-Cel. This lens is not fitted from diagnostic fitting sets but from Ks, refraction and patient examination findings or by using a Palm Pilot. Boston introduced its Aercor XO material to complement its lower Dk, highly successful ES and EO materials. Paragon introduced its SportSight GP lens which blocks 99 percent of UVA and UVB. A new RGP material FLOSI was also introduced by The Lagado Corporation with a Dk of 26.

The great hope is that the B&L-sponsored Singapore Contact Lens Myopia Treatment Study and The Contact Lens and Myopia Progression Study at Ohio State will provide the conclusive evidence that myopia can be controlled to a clinically significant level with RGPs. Preliminary data from the Singapore study was not highly encouraging, but further analysis is expected soon. We know that myopic esophoric children can have reduced myopia progression when bifocal spectacles are used. Studies of myopia progression with bifocal or multifocal contact lenses are needed, as are studies of advanced orthokeratology in children.

No one is sure how many people have been treated with the modern reverse geometry orthokeralogy. Late in 2000 Paragon Vision Sciences launched an educational program to teach the procedure they prefer to call Corneal Refractive Therapy. Surely tens of thousands if not well over 100,000 have tried this treatment either for daily or non-FDA approved overnight wear. Contex and now Paragon have FDA approval for daily wear promotion with their designs. Euclid has applied for overnight approval and others are testing this procedure.

Specialty UltraVision Epicon, a unique carbosilfocon material, recently launched for keratoconus and other astigmatic needs.

Drying

Late last decade, Biocompatibles obtained FDA approval for its Proclear (phosphoryl choline-containing) line of lenses for marginal dry eye patients. Benz Research and Development has touted its Extreme H₂0 as a dryness-resistant material as well. The small fluorescein strip Dry Eye Test is now available from Akorn to assist in dry eye diagnosis. It is estimated that there are at least 16 million contact lens drop- outs, and many of these are due to "dryness" complaints.

Allergan relaunched its Complete multi-purpose lens care solution with hydroxypropylmethylcellulose in 2000 with the claim that it improves late-day comfort due to its coating and humectant properties. Allergan also launched Refresh Contacts to remoisturize the eye and contact lenses with the same formula as its popular Refresh Tears dry eye product. Allergan and Vistakon formed an alliance to market lenses and solutions.

Solutions

Beyond the contact lens solutions and lens care events previously mentioned, probably the most noteworthy event for many years is the FDA approval of Alcon's OptiFree Express for multi-purpose lens care (cleaning, rinsing and soaking/disinfection) with a recommendation that would permit appropriate use without rubbing the lens during the digital cleaning step. Some practitioners were surprised how forward Alcon's packaging revealed this possibility, but most expert practitioners realized that this approval simply adds a safeguard for the 50 percent or more of patients who do not rub their lenses when cleaning. Initially Alcon's no-rub claim applied to lenses used for 30 days or less but now encompasses all soft contact lenses.

Alcon also released its reformulated product, Clerz Plus, to prevent protein buildup. Although FDA does not permit Alcon to say it, this is the first attempt at the long hoped for "on-the-eye cleaner" in the contact lens field. Pseudomonas kill by multipurpose solutions became an issue again with publications regarding OptiFree Express and ReNu Multiplus. B&L introduced ReNu 1 Step daily protein remover, encouraging its use for people who had not upgraded to its MultiPlus solution.

Contact Lens Fees

This is our seventh year of surveying readers about their contact lens fees (Table 2). The year 2000 was a good year for the U.S. economy, although late in the year some companies acknowledged poorer than expected contact lens sales, and global and U.S. investment markets were in flux.

The proportion of practices that increased professional fees in 2000 as compared to 1999 may be decreasing. In the two previous years, 44 and 43 percent, respectively, of practices responding reported professional fee increases.

Although three respondents indicated they obtained 100 percent of their net income from contact lenses, respondents estimated they make 34 percent of their net income from contact lenses on average. This compares to 40 percent in 1998 and 35 percent in 1999. Prior to 1998, two-thirds of our respondents thought spectacle-only patients were more profitable than either contact lens-only or contact lens and spectacle wearers, 45 percent thought spectacles-only patients were more profitable in 1998, as compared to 50 percent in 1999 and 51 percent in 2000. Indeed, half of our respondents in recent years believe contact lens-only (18 percent in 2000) and contact lens and spectacle wearers are as profitable as spectacle-only patients.

Explaining Fee Trends

In our fee and income survey, we ask contact lens practitioners why their fees have increased or not. This is an open-ended question. Eighteen respondents volunteered that mail-order and Internet contact lens sales had an impact on their decisions. Fourteen volunteered that mass merchandisers such as Costco and Wal-Mart influenced their decisions. Although we have heard these comments before, such mentions were more frequent in 2000. Another frequent response was the need to lower material costs and raise professional fees due to competitive pressures. At least four respondents mentioned that practice management consultants had recommended increased professional and material fees. Seven to one, our respondents mentioned increased patient flow, especially for disposable toric and bifocal patients, as a factor in their practices. Other frequently mentioned reasons for fee decisions were managed care and insurance plans, inflation, rebates and eyeglass and refractive surgery competition.

Optometric Management (July 1999 and 2000) reports a seven-year trend in annual reduction in overall contact lens fees. As Craig Norman, FCLSA, said early in 2000, "How much will your fees be when you can't mark up contact lenses at all?"

One factor that impacts this competition is the oversupply of optometrists in the United States, depending upon how one interprets recent AOA survey data. If ODs were better geographically distributed and eyecare demand was what it should be, including eyecare for children and the aging, supply could meet demand. Given current demand, we may see an excess of 2,000 to 4,000 ODs in five to 15 years. This would surely keep contact lens competition keen.

On the Web

The AMA and our own surveys indicated 70 percent of eye-care practitioners now have Internet access in their offices. We redesigned clspectrum.com and cltoday.com in 2000. J&J and Essilor announced a planned new eye and vision care portal called Vision Web. Industry experts see this competing with E-dr. and others for the attention of practitioners who will be conducting business on the web. Allabout-vision.com increased its impact on eyecare consumer awareness in 2000, while the Contact Lens Council promoted contactlenscouncil.com. For consumer information about refractive surgery try ftc.com or surgicaleyes.org. Keep the RGPLI's RGP Contact Lens and Material Guide at rgpli.com bookmarked for quick reference.

Refractive Surgery

In August 2000, the Federal Trade Commission published a Consumer Alert concerning an increasing number of complaints about complications associated with LASIK, and the lack of advertising disclosures about attendant risks. The FTC reports 900 laser centers were operating in 2000, up from 300 in 1996. Some 1.5 million LASIK procedures took place in 2000 out of a possible 1.65 million refractive surgery procedures. Five years from now, we may see as many as 3 million per year.

The FTC alert mentioned that hundreds of thousands of procedures have been successfully performed, but the procedure was not recommended for those under age 18 (although FDA approval is for age 21 or older), pregnant, nursing or using Accutane or oral prednisone. Reports of night vision problems and iatrogenic ectasia were made increasing known in 2000. The Canadian Medical Association issued a "Fitness to Drive Guide," mentioning significantly reduced contrast sensitivity from refractive surgery. The refractive errors most frequently corrected with LASIK overlap the contact lens-wearing population, and the average age for laser procedures has been reported a number of times at 39. Presbyopes who are considering laser procedures now have the option of spectacles, monovision and better bifocal contact lenses. Except for a few scattered anecdotes about laser refractive procedures for teens, most teens are still contact lens candidates and not refractive surgery candidates. So far contact lens sell-through profile production has not been altered by refractive surgery.

Contact lens options to manage post-operative refractive surgery cases are manifold, including soft aspheric lenses to reduce spherical aberration (Specialty UltraVision Choice AB and Cooper Frequency 55 AS) and reverse geometry RGP lenses and special designs such as C&H Contact Lens Macrolens.

The American Academy of Ophthalmology challenged co-management of refractive surgery by ODs and MDs, while optometry organizations defended their right to co-manage these patients. Later in 2000, the International Society of Refractive Surgeons, who represent many large practice refractive surgeons, came out in favor of appropriate co-management in the patients' best interest. When this editor has challenged the ethics of high co-management fees for optometrists, he has been swiftly criticized for suggesting that such fees for mostly uncomplicated patient care could be perceived as a finder's fee.

Many contact industry observers hope that as LASIK fees decrease under pressure from low $999 or $500 per eye rates, decreased co-management fees will cause optometrists to encourage contact lens wear instead of refractive surgery.

Intacs (from KeraVision) were approved by the Federal Aviation Administration for use by the United States' 635,000 pilots who would like refractive surgery.

Interestingly, Vistakon reported an analysis in 2000 which reported the 29 million American contact lens wearers were supported by about $20 million in advertising or 69 cents per wearer, while a million LASIK patients were supported by $200 million in advertising or $200 per patient.

Education

While some within the profession and the contact lens industry have criticized optometry for not providing enough contact lens education, optometry still leads in this area. While ophthalmologists provide perhaps 10 to 15 percent of the U.S. contact lens care, ophthalmology residents are said to be comfortable with spherical lenses and less so for special designs. They also report they are confident managing contact lens complications, according to a report from the Contact Lens Association of Ophthalmologists. They report 87 percent of residents have contact lens training, and 61 percent of these are trained by ODs. The 20 hours (average) of contact lens training is an improvement over previous reports.

Acknowledging the Past, Predicting the Future

Industry leaders Leonard Seidner, OD, and Joe Goldberg allegedly retired in 2000. There are few optometrists who run contact lens companies like those in the early years of the contact lens industry such as Newton Wesley, OD, and many more. Morton Greenspoon, OD, received the AOA Contact Lens and Cornea Section Achievement Award for his Emmy Award-winning work with special effect cosmetic lenses. We lost some leaders at the end of the millennium: Bill Fleischman, Rodger Kame, OD, Bob Lester and Joe Soper.

Baby boomers will continue to impact the contact lens industry this decade, especially as bifocal contact lens wearers and their children are and will be the new contact lens wearers. Some 95 percent of new contact lens wearers are under age 20. About one-third of practitioners surveyed recommend contact lenses at age 10 to 11, while two-thirds do so at 12 to 15 years of age.

Although only about five percent of our patients use daily disposables, about 20 percent of optometrists use them. Forty percent of our patients would be interested in single-use contact lenses if the price were only $1 per day. It is likely with the large capacity available to CIBA Vision, Vistakon and Bausch & Lomb, that 30 percent of our patients may use daily disposables by the end of the decade. CIBA Vision's advertising of its Focus Dailies lenses to teenage girls has had an impact on their awareness of contact lenses and on sales.

Later this decade it is predicted that daily disposable contact lens wearers and extended wear contact lens wearers could each hold 30 percent of the contact lens-wearing population. Current technology allows making toric and bifocal daily disposable and extended wear contact lenses more readily than in the past.

There is little doubt that who sells contact lenses to patients will continue to evolve like the delivery of medicine. We need enforcement of sales only by licensed providers based on valid contact lens prescriptions.

Will LASIK, phakic patient IOLs or corneal inlays compete with contact lenses later this decade? Stay tuned and we'll let you know.

Dr. Barr is editor of Contact Lens Spectrum and assistant dean for clinical affairs at The Ohio State University.