Annual Report

Contact Lenses 2012

The contact lens field was healthy in 2012, with notable growth in certain lens categories and modalities.

Dr. Nichols is the Kevin Mc-Daid Vision Source Professor at the University of Houston College of Optometry as well as the editor-in-chief of Contact Lens Spectrum and editor of the weekly email newsletter Contact Lenses Today. He has received research funding or lecture honoraria from Vistakon, Alcon, and Bausch + Lomb.

By Jason J. Nichols, OD, MPH, PhD, FAAO

Each January we bring to you our annual report, which is intended to summarize the current state of the contact lens field. We place a heavy emphasis on evaluating trends in the marketplace in terms of what practitioners are using in their practices. We also try to identify new concepts or highlight any clinical or research trends that are insightful relative to analyzing the current state of the contact lens field.

While 2012 was a good year with some differences when compared to years past, it appears that the field may not have changed significantly from 2011 with the exception of a few data points described below.

Overview of General Market Trends

We generally use several data sources in evaluating trends in the field in terms of growth and market shares for contact lenses, including our own market research, industry reports, and discussion with industry and financial analysts. One estimate that is always difficult to come by is the total number of contact lens wearers. In the United States market, it has been recognized for several years that growth in the actual number of lens wearers has been somewhat flat, with potentially as many people discontinuing contact lens wear as are entering the market. For the past several years, we’ve believed there to be 34 million to 36 million contact lens wearers in the United States. This year, we estimate that there are approximately 37 million to 38 million lens wearers in the United States.

In recent years, we’ve been concerned about a potential defensive nature of contact lens sales, with the market posting annual growth of 3 percent to 5 percent worldwide and 4 percent to 7 percent in the United States between 2009 and 2011. Data obtained from GfK Retail and Technology (Jim Fleckenstein, Vice President Optics-North America) show a continued healthy upward trend in the sales volume for soft lenses in the United States in 2012. GfK data showed that U.S. sales grew 4.5 percent for January 2012 through September 2012 compared to the same period for 2011. Similarly, data obtained from Robert W. Baird (Jeff Johnson, OD, CFA, director, senior research analyst) show that as of the third quarter of 2012, contact lens trends have been healthy on a marketwide basis, with U.S. sales growing 9 percent through the first nine months of the year and worldwide sales up 5 percent after accounting for the impact of recent fluctuations in foreign exchange rates. With domestic contact lens market growth accelerating in 2012 to its highest level since pre-Great Recession Days, it’s also increasingly evident that technology represents an important growth driver for the industry, especially across silicone hydrogel, daily disposable, and multifocal lens categories, among others.

As for the contact lens market size, Baird’s data suggest that the value of the worldwide contact lens market currently stands at roughly $7.1 billion, with the U.S. market valued at approximately $2.4 billion at the manufacturer level in 2012. Of this, Baird estimates that premium lenses such as torics and multifocals account for roughly 20 percent and 5 percent, respectively, of the worldwide market, with spherical lenses accounting for the majority of the remainder. Further, daily disposable lenses continued to grow in popularity in 2012, accounting for ~39.5 percent of year-to-date 2012 worldwide sales through the end of the third quarter versus ~37.5 percent of worldwide sales in all of 2011. We’ll come back to the daily disposable category later in this report, discussing some other data sources suggesting their continued growth. Finally, Baird estimates that silicone hydrogel lens penetration continued to grow last year, increasing to nearly 50 percent on a worldwide basis through the first nine months of 2012 versus ~43 percent in 2011 (with silicone hydrogel penetration rates closer to 65 percent in the United States according to Baird’s estimates, which is similar to other data source estimates that we’ll come back to later in this report).

It is typically believed that the North American market is the largest global contact lens market. GfK released data in October 2012 for the period from July 2011 to June 2012 showing continued growing demand in various contact lens markets, with Asia leading in terms of the fastest growth (http://www.gfk.com/news-and-events/pressroom/press-releases/pages/contact-lens-marketacross-asia-europe-and-the-us-continue-to-expand-with-asia-being-fastest-growing-region-gfk.aspx). The Asian countries tracked showed growth of 7.4 percent, while the United States and Europe showed growth of 4.8 percent and 3.2 percent, respectively. Of the six Asian countries tracked (including China, Malaysia, South Korea, Taiwan, Hong Kong, and Singapore), Korea showed the most growth at approximately 15 percent, making up 38 percent of the overall region’s market share.

Looking to market share of the four largest lens manufacturers, Baird estimates that market shares were fairly stable in 2012, although CooperVision remained the fastest growing company of the bunch last year and thus likely picked up a small amount of share relative to the competition. Specifically, with the market growing roughly 5 percent on a worldwide basis after accounting for foreign currency fluctuations, and Vistakon and Alcon (formerly Ciba Vision) both growing 4 percent to 5 percent through the first nine months of 2012, it appears likely that both companies maintained their low-40-percent and mid-20-percent worldwide market shares, respectively. For CooperVision, Baird estimates that with the company growing its worldwide contact lens revenue 11 percent through the first three quarters of 2012, its share of the worldwide contact lens market may have increased roughly a point to just approximately 17 percent to 18 percent last year, with Bausch + Lomb (B+L) likely maintaining close to the 10 percent market share that the company had entering the year.

When practitioners were asked in November 2012 about product “innovation” associated with the four major contact lens manufacturers, Baird data showed that Vistakon had regained the No. 1 position, having lost this position in 2010. Vistakon scored the highest at 3.85 on a scale of 1 to 5 (1 = Not innovative at all and 5 = Highly innovative), followed closely by Alcon (3.80), and CooperVision (3.56), with B+L continuing to lag behind (3.00). According to Baird (and as reported in previous years), CooperVision was associated with the highest perceived product innovation in 2011, while Alcon (Ciba Vision) held that title in 2010. B+L has consistently been ranked fourth in perceived product innovation since 2009.

Current Practice Trends

Contact Lens Spectrum also conducts market research, whereby we ask our readers about their practice trends and patterns both generally and as they relate specifically to contact lens practice. Our questions cover a variety of topics including characteristics of the practice patient base, practice business and financial aspects, fitting and prescribing trends, and care solution trends. This year, we had 467 respondents who accessed the survey link, with 428 completing the entire survey and 39 answering a portion of the survey. As I proceed ahead in discussing trends and observations about the contact lens field, I will draw on information provided through this market research in addition to that acquired from the Baird and Co. research group and from GfK, as mentioned previously.

Practice and Business Trends Table 1 summarizes trends in practice and business characteristics from 2009 to 2012. Most of our respondents were optometrists, followed by opticians, contact lens technicians, and ophthalmologists. Modes of practice varied, but the most common was solo private practice, followed by group private practice and retail corporation. In 2012, the typical practice saw an average of 127 patients per week. The patient base of the typical practice was made up of approximately 34 percent contact lens wearers, and the average number of contact lens fittings and refittings in a typical week was about 26. Correspondingly, most respondents felt that about 32 percent of their gross profit and about 27 percent of their net profit was derived from the contact lens portion of their practices. Sixty percent of practitioners believe that they will see an increase in their overall contact lens practice in 2013, while 38 percent believe it will stay the same and 2 percent believe it will be decreasing further.

Much to the dismay of many eyecare practitioners is the growing trend of online eyeglass and contact lens sales at the expense of office-based transactions. An April 2012 report from IBIS World listed online eyeglass and contact lens sales as one of the top 10 fastest growing industries of the next several years (http://www.ibisworld.com/Common/MediaCenter/FastestGrowingIndustries.pdf). According to the report, between 2002 and 2012, online eyeglass and contact lens sales grew 28.2 percent. The report also indicated that the 2012 revenue from these online sales is estimated at approximately $350 million. The report further estimates that by 2017, online dispensing revenue will be approximately $530 million, which suggests almost 9 percent growth per year in this time period.

Lens Dispensing and Mode of Wear Trends As we have reported in years past, silicone hydrogel materials dominate the fits and refits being conducted today (Figure 1). However, in 2011, we saw a definite slowing of the growth in the silicone hydrogel category. In 2012, we noted an apparent small decline in the silicone hydrogel category in that 64 percent of lens fits and refits were conducted with a silicone hydrogel compared to 67 percent in 2011, whereas 24 percent were conducted with a hydrogel material (24 percent in 2011). Thus, as noted last year, our data suggest that the silicone hydrogel category has indeed slowed in terms of any further growth. Similar to years prior, 9 percent of fits and refits were conducted with GP materials—we noted that respondents indicated 8 percent of fits and refits were done with GP materials in 2011.

Figure 1. Distribution of material classes used in fittings and refittings.

Figure 2 shows that most of the reported fits and refits are with soft spherical lenses (51 percent) and in full time daily wear (59 percent), followed by soft toric lenses (22 percent), soft multifocal lenses (12 percent), spherical GPs (6 percent), and multifocal GPs (3 percent). Most of your patients are using monthly replacement (45 percent) schedules as shown in Figure 3. Twoweek replacement was down to 30 percent this year, again losing share in the replacement schedule sector of the market. When Baird asked practitioners about their preferences regarding spherical lenses, silicone hydrogel monthly lenses led the pack (36 percent), followed by silicone hydrogel two-week replacement (24 percent), and hydrogel daily disposable (17 percent). Data provided from GfK for the January through September 2012 time period (compared to the same time period for 2011) show that the two-week replacement category is down 6 percent, while the monthly category is up about 12 percent (for 2012). There were little changes in quarterly and annually replaced contact lens fittings and refittings when comparing 2012 to prior years.

Figure 2. Distribution of lens modalities used in fittings and refittings.

However, as noted elsewhere in this report, daily disposable lenses once again trended up in 2012. In fact, it was one category that showed big changes again in 2012 compared with 2011. Our data indicate that daily disposables were used in just over 17 percent of fits and refits in 2012 (Figure 3), which is up from 11 percent in 2009, 13 percent in 2010, and 14 percent in 2011. Further, data from GfK show daily disposable growth between January and September 2012 at nearly 19 percent in the United States, compared with the same time period for 2011. As noted previously, data from GfK also show that overall, the most growth in any one region of the contact lens market appears to be occurring in Asia. However, data from GfK also showed that within the daily disposable category, most 2012 growth occurred in the U.S. market (again about 19 percent overall comparing 2012 to 2011) compared with Japan at about 2 percent growth and five prominent European countries averaging about 4 percent growth. Data obtained from GfK also show that within the daily disposable segment in the U.S. market, daily disposable toric sales growth was 81 percent, whereas daily disposable spherical growth was about 15 percent and daily disposable multifocal growth was nearly 5 percent.

Figure 3. Distribution of replacement schedules used in fittings and refittings.

When asked about the contact lens design or modality with the greatest growth potential over the next year, 58 percent of respondents in our market research chose daily disposable lenses, followed by soft multifocals (34 percent) and soft torics (8 percent). When asked in our survey about anticipated use this coming year, 64 percent of respondents in our market research anticipate using silicone hydrogel daily disposables, and 52 percent anticipate using traditional hydrogel daily disposables at a greater rate in 2013.

For GP lens wearers, most practitioners in our market research indicated that their patients replace GP lenses yearly (38 percent), followed by every two years (29 percent) and every three years (18 percent).

When asked about estimates for types of wear schedules for contact lens patients, respondents to our survey indicated that most of their patients are in the full-time, daily wear soft (59 percent) wear schedule, followed by part-time, daily wear soft (12 percent), occasional overnight wear soft (9 percent), full-time daily wear GP (9 percent), full-time overnight wear soft (7 percent), part-time daily wear GP (2 percent), and full-time overnight wear GP (1 percent).

Relative to toric soft lenses, our estimates show relatively no change in soft toric lens fittings and refittings in 2012 (approximately 22 percent of all lenses fitted) compared with 2011 (23 percent). Nearly 64 percent of respondents to our survey anticipate greater use of silicone hydrogel toric lenses in 2013, while only 15 percent of practitioners estimate greater use of traditional hydrogel torics in 2013. When Baird asked practitioners about preferences in terms of toric lens fittings, 48 percent responded that they would first choose a silicone hydrogel monthly replacement design, followed by a silicone hydrogel two-week replacement (24 percent), hydrogel monthly replacement (9 percent), and hydrogel daily disposable design (7 percent).

For presbyopic patients who wear contact lenses, most practitioners indicated a strong preference for multifocal lenses (69 percent) compared with monovision (19 percent) and over-spectacles (12 percent). In practice, indeed more of your contact lens-wearing presbyopic patients are prescribed a multifocal (46 percent) compared with monovision (31 percent). Soft multifocals (38 percent) and soft monovision (27 percent) make up the bulk of the presbyopic contact lens correction modes, following by soft lenses with over-spectacles (18 percent), GP bifocals/multifocals (5 percent), GPs with over-spectacles (5 percent), GP monovision (4 percent), and hybrid and scleral multifocals (1 percent and 2 percent, respectively).

Forecasting into 2013, most respondents thought that nearly all options in silicone hydrogel materials, including silicone hydrogel multifocals (73 percent of respondents), silicone hydrogel torics (64 percent of respondents), silicone hydrogel daily disposables (64 percent of respondents), and silicone hydrogel monthly lenses (49 percent of respondents), would be increasing further in their practices. This is interesting in that, as noted above, data for the silicone hydrogel material category as a whole suggest that growth in this material sector has stopped. Most respondents (52 percent) felt that hydrogel daily disposables would also be increasing in their practices in 2013, compared with staying the same (37 percent of practitioners) or declining (3 percent of practitioners), whereas most respondents felt that daily wear monthly hydrogels would be staying the same (51 percent of practitioners) compared with increasing (13 percent) or decreasing (36 percent). For every other lens option asked about, including daily wear one- to two-week replacement silicone hydrogels, all other toric and multifocal options, extended and continuous wear, cosmetic/colored lenses, orthokeratology, GPs, hybrids, and sclerals, practitioners generally felt that these modalities would all be staying the same in terms of utilization in their practices in 2012 compared with increasing or decreasing. However, when asked specifically which specialty lens design has the greatest potential for growth in 2013, respondents indicated the following: custom soft lenses (49 percent), hybrids (24 percent), sclerals (19 percent), and orthokeratology (8 percent). Interestingly, while many practitioners are very vocal and passionate about scleral lenses and their perceived “growth,” these data seem to suggest that scleral lens growth may not be quite as strong as some believe.

Figure 4. Practitioner perceived patient compliance associated with lenses of various replacement schedules.

Contact Lens Wear and Care Compliance

As shown in Figure 4, practitioners indicated that only 48 percent of their patients who use one- to two-week replacement lenses were compliant with the replacement schedule, whereas practitioners indicated that 67 percent of their patients who use monthly lenses were compliant and 78 percent of their patients who use daily disposable lenses were compliant. Generally, respondents indicated that about 71 percent of the contact lens patients in their practice properly comply with replacement per instruction. Further, practitioners indicated that they believe that approximately 75 percent of their contact lens patients wash their hands prior to handling their contact lenses, but only 60 percent of patients rub their lenses as indicated and 62 percent rinse their lenses as indicated.

Lens Care Trends

According to our survey, the vast majority of our survey respondents reported using chemical care systems (74 percent) with contact lens patients, followed by hydrogen peroxide-based systems (25 percent), which has been trending up over the last several years (Figure 5). Our data show that you are also recommending care systems to your contact lens patients—87 percent of respondents recommend specific brands of contact lens care systems to their contact lens patients, while 13 percent do not. Care solution recommendations by eyecare practitioners continue to be trending down a bit this year compared with prior years. According to our survey, the largest factor in your selected recommendation is lens material/solution compatibility (30 percent), followed closely by the potential impact on comfort (29 percent), disinfectant efficacy (22 percent), cleaning efficacy (13 percent), cost (10 percent) and convenience (6 percent).

Other Issues and Looking Ahead

The year 2012 was one marked with further discussion of some key elements associated with successful contact lens wear. We’ve continued to see a heavy emphasis being placed on the safety of contact lens wear, with topics such as corneal infiltrative events being heavily discussed. Several studies have shown at least a two-fold increase in the risk of an infiltrative keratitis in silicone hydrogel lens wearers compared with non-silicone hydrogel lens wearers, begging the question as to why (Szczotka-Flynn, 2007; Chalmers et al, 2011; Chalmers et al, 2012; Radford et al, 2009).

Further, there has been continued discussion about the No. 1 issue inhibiting growth in the contact lens industry—contact lens dry eye. Several of the larger markets, including the United States, have shown little, if any, growth in the contact lens market in the last 10 years. In fact, as I noted in the Editor’s Perspective, the Tear Film and Ocular Surface (TFOS) Society initiated the Contact Lens Discomfort Workshop in 2012, aimed at developing a contemporary understanding and global consensus on the issue of contact lens dry eye and discomfort. This new workshop will be concluded in 2013, and we will be sure to bring you a summary of the results later this year.

Figure 5. Lens care systems prescribed to patients from 2009 to 2012.

These aforementioned issues have led some to question the ultimate success of silicone hydrogel materials in the market. Are these materials actually safer for patients? Do they have any role in improving patient comfort? It will be of interest to see how the field continues to respond to this issue as we move ahead into 2013. Further, in the not-so-distant future, the Alcon (Ciba Vision) Nicolson patents that relate to silicone hydrogel materials will expire—September 2014 for the U.S. patents and March 2016 for international patents. It will be interesting to see how this patent expiration will impact this material category, in addition to the apparent clinical issues discussed above.

Finally, as I also mentioned in the Editor’s Perspective, we have noted significant trends in certain material and modality categories that have built on the previous years’ momentum in those categories. We’ve seen continued enthusiasm about scleral lenses, custom silicone hydrogels, and the daily disposable categories, with continued and expected growth in some of these areas. But what was most noteworthy this past year and what we have chosen as the Contact Lens Event of 2012 was the significant steps forward in the U.S. Food and Drug Administration’s (FDA) guidance and regulatory outlook on contact lenses and care solutions. In late 2012, the FDA culminated years of effort by publishing eight papers in Eye and Contact Lens (three of which are editorials). The papers identify key events and issues that relate to outdated guidance to the industry, by which materials and care solutions were introduced and subsequently approved, but then unanticipated issues arose when they were used in practice. Look for more on this in 2013.

In summary, the contact lens field certainly did well in 2012. There were some healthy growth-related trends in some interesting material and modality categories, which are likely to continue through 2013. We continue to be optimistic about the state of contact lenses and look forward to returning to you in January 2014 to report further on these trends. CLS

For references, please visit www.clspectrum.com/references.asp and click on document #206.