FTC Staff Comment to the Honorable Doug Matayo Concerning Arkansas H.B. 2286 and the Fairness to Contact Lens Consumers Act and Contact Lens Rule

1This letter expresses the views of the FTC’s Office of Policy Planning, Bureau of
Consumer Protection and Bureau of Economics. The letter does not necessarily represent the
views of the Commission or of any individual Commissioner. The Commission has, however,
voted to authorize us to submit these comments.
2HB 2286 amended Arkansas Code §§ 17-90-108; 17-90-109; 17-90-110. For purposes
of this letter, we will refer to these amendments as HB 2286, even though the bill has been
enacted into law. Your letter indicates that the Arkansas Legislature passed HB 2286 in the
spring of 2003.
315 U.S.C. §§ 7601-7610.
4The Board of Optometry has informed us that it has not published an official draft
regulation because it has been waiting for the Commission to issue the final Contact Lens Rule.
Therefore, we would welcome another invitation to comment on such a regulation when it is
finalized.
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Office of Policy Planning
Bureau of Consumer Protection
Bureau of Economics
October 4, 2004
The Honorable Doug Matayo
State of Arkansas
House of Representatives
3110 Magnolia Place
Springdale, Arkansas 72762-7416
Re: Arkansas HB 2286
Dear Representative Matayo:
The staff of the Federal Trade Commission’s Office of Policy Planning, Bureau of
Consumer Protection, and Bureau of Economics 1 are pleased to respond to your letter of June 23,
2004, asking us to comment on Arkansas HB 2286 (“HB 2286”) 2 and the implementing draft
regulation proposed by the Arkansas Board of Optometry (the “Board”). Your letter indicates
that HB 2286 was enacted before the passage of the Fairness to Contact Lens Consumers Act
(the “Act”) 3 and issuance of the Contact Lens Rule (“Contact Lens Rule”). You indicate that
you are now conducting a review of HB 2286 in light of the passage of the Act and issuance of
the Contact Lens Rule. Specifically, you asked us for assistance in determining the consistency
of HB 2286 and the Board’s draft regulation with federal law and their possible impacts on
public health and consumers. We are pleased to provide such assistance with respect to HB
2286.4 In brief, we conclude that portions of Arkansas HB 2286 appear to be preempted in

516 C.F.R. Part 456.
669 Fed. Reg. 40481 (July 2, 2004) (to be codified at 16 C.F.R. Part 315). The
Commission’s press release regarding the issuance of the final Contact Lens Rule, including a
link to the text of the Federal Register Notice, is available at
http://www.ftc/gov/opa/2004/06/contactlens.htm.
2
certain circumstances because they conflict with federal law. In addition, under the Board’s
interpretation of HB 2286, it appears that contact lenses can be legally sold to Arkansas residents
only by Arkansas licensed optometrists and ophthalmologists. Thus, it appears that mail order,
Internet, and other alternative providers must be licensed in Arkansas to provide contact lenses
to Arkansas residents. Such an arrangement likely results in higher prices and reduced consumer
choice, without substantially increasing health protections.
This letter briefly summarizes the Commission’s interest and experience in the eye care
industry and provides the staff’s opinion regarding the consistency of HB 2286 with federal law
and the possible impact of HB 2286 on consumers and competition. The Commission has been
active in the eye care industry for almost thirty years. It enforces the Ophthalmic Practices Rules
(“Eyeglass Rule”)5 and recently issued the Contact Lens Rule 6 as required by the Fairness to
Contact Lens Consumers Act. As described in detail below, the agency has also recently issued
a number of advocacy filings and reports regarding the contact lens market.
Based on our experience in the contact lens industry and our review of your letter and HB
2286, the FTC staff has reached the following conclusions:
• 	HB 2286 requires that contact lens prescriptions be released to the patient “upon
request” and “upon payment.” The “upon request” and “upon payment”
restrictions on prescription release appear to be preempted because they conflict
with the automatic prescription release standard imposed by the Act.
• 	HB 2286 contains an “active” verification requirement that appears to be
preempted by the “passive” verification standard imposed by the Act and the
Contact Lens Rule.
• 	It appears that mail order, Internet, and other alternative providers must be
licensed in Arkansas to provide contact lenses to Arkansas residents. Although
state licensing is not expressly covered by the Act or the Contact Lens Rule, such
a requirement likely results in higher prices and reduced consumer choice. In
turn, such effects may increase the incidence of health problems that are
associated with contact lens use, such as the over-wearing of disposable lenses.
Less restrictive alternatives to licensing, such as registration alone, may
adequately protect consumers.
A brief summary of the Commission’s history in the eye care industry and a detailed
analysis in support of each of the FTC staff’s conclusions is provided below.

716 C.F.R. Part 456.
869 Fed. Reg. 40481 (July 2, 2004) (to be codified at 16 C.F.R. Part 315).
9FTC Staff Comment Before the Connecticut Board of Examiners for Opticians (Mar. 27,
2002), available at http://www.ftc/gov/be/v020007.htm.
10 Connecticut Board of Examiners for Opticians, In re: Petition for Declaratory Ruling
Concerning Sales of Contact Lenses, Declaratory Ruling Memorandum of Decision
(June 24, 2003).
11 67 Fed. Reg. 48472 (2002). The workshop’s transcript is available at
http://www.ftc.gov/opp/ecommerce/anticompetitive/021008antitrans.pdf. All of the panelists’
written statements are available at
http://www.ftc/gov/opp/ecommerce/anticompetitive/agenda.htm.
3
I. 	Interest and Experience of the Federal Trade Commission
As noted above, the Commission has been active in the eye care industry for nearly three
decades. It enforces the Eyeglass Rule, which requires an optometrist or ophthalmologist to
provide a patient, at no extra cost, a copy of the patient’s eyeglass prescription after completion
of an eye exam.7 The Commission also recently issued the Contact Lens Rule, which requires a
prescriber to provide the patient a copy of the contact lens prescription upon the completion of a
contact lens fitting. 8 The Contact Lens Rule also allows contact lenses to be sold if sellers obtain
a copy of the consumer’s prescription or verify the prescription with the prescriber.
In March 2002, the Commission staff filed a comment before the Connecticut Board of
Examiners for Opticians in a declaratory ruling proceeding on the interpretation and applicability
of various statutes and regulations concerning the sale of contact lenses.9 The comment
addressed whether Connecticut state law requires that out-of-state sellers obtain a license to sell
contact lenses to the state's residents. In that comment, Commission staff concluded that out-of-
state sellers should not be subject to state licensing requirements because the possible benefit to
consumers from increased state protection did not outweigh the likely negative effect from
decreased competition. Ultimately, the Connecticut Board of Examiners decided that state law
did not require out-of-state sellers to obtain a license to sell contact lenses to consumers.10
In October 2002, the Commission held a public workshop entitled Possible
Anticompetitive Efforts to Restrict Competition on the Internet to evaluate possible efforts to
restrict competition in contact lenses and other industries.11 Commission staff heard testimony
about the contact lens issue from many perspectives, including eye care practitioners, a major
contact lens manufacturer, an online seller, traditional bricks and mortar lens sellers, and an
economics professor with expertise in occupational licensing issues. In March 2004, the

12 Possible Barriers to E-Commerce: Contact Lenses: A Report from the Staff of the
Federal Trade Commission (Mar. 29, 2004), available at
http://www.ftc.gov/os/2004/03/040329clreportfinal.pdf.
13 69 Fed. Reg. at 40505, citing Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 121 S. Ct.
2404, 2414 (2001); Crosby v. National Foreign Trade Council, 530 U.S. 363, 372-73 (2000);
English v. General Elec. Co., 496 U.S. 72, 78-79 (1990).
14 69 Fed. Reg. at 40505, quoting Freightliner Corp. v. Myrick, 514 U.S. 280, 287 (1995);
Hines v. Davidowitz, 312 U.S. 52, 67 (1941).
15Id.
16Id. at 40506.
4
Commission staff issued a report, Possible Barriers to E-Commerce: Contact Lenses: A Report
from the Staff of the Federal Trade Commission (“Contact Lens Report”). 12
II. 	Federal Preemption
The Commission’s Statement of Basis and Purpose (the “SBP”) for the Contact Lens
Rule addresses the issue of preemption. The SBP points out generally that a federal law may
preempt state law through implied preemption where state and federal law actually conflict.13
The SBP notes that a conflict may arise where state law “stand[s] as an obstacle to the
accomplishment and execution of the full purposes and objectives of Congress.”14 The SBP
further states that “[t]he Act does not expressly state that it preempts any state laws. The
language of the Act, however, appears to be inconsistent with the language of some state laws.” 15
Ultimately, the SBP concludes that “the Act preempts any State laws or regulations that restrict
prescription release or require active verification, because they would undermine Congress’s
purpose of giving consumers greater freedom of choice in their choice of sellers from whom they
purchase their contact lenses.” 16
The Commission staff believes that the prescription release restrictions and the “active”
verification standard contained in HB 2286 conflict with the language of the Act and would
undermine the purpose that Congress intended to achieve: providing consumers with greater
choice with respect to sellers of contact lenses. Consequently, such more restrictive and
burdensome state laws and regulations conflict with the federal law and are therefore preempted.
These issues are addressed more fully below.

17 69 Fed. Reg. at 40506.
18 In addition, Section 3 of the Act requires that “presentation of proof of insurance
coverage for the service” be deemed a payment. 15 U.S.C. § 7602. HB 2286 does not expressly
address the relationship between proof of insurance coverage and payment.
19 15 U.S.C. § 7601(a)(1).
20 15 U.S.C. § 7602.
5
A. 	Prescription Release Restrictions
The Commission has concluded that the Act preempts state laws or regulations restricting
prescription release.17 Accordingly, Section 315.11 of the Contact Lens Rule provides that state
laws and regulations “that restrict prescription release . . . are preempted.” HB 2286 contains
two restrictions on prescription release that appear to conflict with the Act and the Contact Lens
Rule.18
First, Section 1(a)(2)(A) of HB 2286 requires prescription release to occur “upon request
of the patient” at the completion of the fitting. However, Section 2(a)(1) of the Act requires
prescription release to occur at the completion of the contact lens fitting “whether or not the
patient requests it.” 19 The “upon request” release standard set out in HB 2286 thus appears to be
preempted because it conflicts with the automatic release standard imposed by the Act.
Second, Section 1(a)(2)(A) of HB 2286 requires release of the contact lens prescription
“upon payment being made for the examination and the fitting.” In contrast, Section 3 of the
Act 20 allows a prescriber to require payment prior to the release of the contact lens prescription
“only if the prescriber” also “requires immediate payment in the case of an examination that
reveals no need for contact lenses or other ophthalmic goods.” Because HB 2286 allows a
prescriber to require payment prior to prescription release for contact lens patients even if the
prescriber does not require immediate payment from patients whose exams reveal no need for
ophthalmic goods, it conflicts with the Act and the Contact Lens Rule in certain circumstances.
To the extent that HB 2286 conflicts with the Act and the Rule, it is preempted.
B. 	Positive Verification Systems
The Commission also has concluded that certain state laws regarding positive
verification requirements appear to inhibit the accomplishment of the objectives of the Act. In
particular, the SBP explains that the Act preempts state laws or regulations that “require active
verification, because they would undermine Congress’s purpose of giving consumers greater

21 69 Fed. Reg. at 40505, noting that legislative history supports the same conclusion:
“The Committee believes that any state law with an active or positive contact lens prescription
verification system would stand as an obstacle to the accomplishment of the full purposes and
objectives of this Act. Practically, it would be impossible to comply with the terms of this Act
and an active verification scheme. Therefore, it is the intent of the Committee that the passive
verification system in section 4(d) preempt any conflicting state laws that use active or positive
contact lens prescription verification systems.” H. Rep. No. 108-318, at 9-10 (2003).
As prescribed by the Act, the Contact Lens Rule imposes requirements on sellers in
connection with prescription verification: “the seller shall provide a reasonable opportunity for
the prescriber to communication with the seller concerning the verification request” and a seller
shall maintain a record of all direct communications. 16 C.F.R. § 315.5 (c)(3), (f). When
seeking verification of a contact lens prescription, a seller shall also provide the prescriber with
certain required information as set forth in the Contact Lens Rule. Id. at § 315.5 (b).
22 Existing Arkansas law specifies that “[t]he practice of optometry shall include but not
be limited to: the prescribing and sale of eyeglasses and contact lenses. . . .” Ark. Code 17-90-
101.
23 Contact Lens Report at 3.
6
freedom in their choice of sellers from whom they purchase their contact lenses.” 21 Accordingly,
the Commission added Section 315.11 to the Contact Lens Rule to clarify that state laws and
regulations that “require active verification are preempted.” Consequently, the active
verification standard imposed by Section 1(a)(2)(B) of HB 2286, which requires out-of-state
sellers to possess a “positively verified” prescription, appears to be preempted because it
conflicts with the Act and the Contact Lens Rule.
III. 	State Registration and Licensing Issues
Section 2 of HB 2286 includes provisions for the registration of mail order, Internet, and
other alternative providers of contact lenses to Arkansas residents. Your letter of June 23, 2004
indicates that the Board interprets existing law to mean that contact lenses can be legally sold to
Arkansas residents only by Arkansas licensed optometrists and ophthalmologists.22 Thus, it
appears that mail order, Internet, and other alternative providers must be licensed in Arkansas to
provide contact lenses to Arkansas residents.
The Contact Lens Report considered the benefits and costs associated with licensing and
concluded that “although there are significant health issues concerning the use and sale of
contact lenses, requiring a professional license to sell replacement contact lenses over the
Internet is likely to raise prices and/or reduce convenience to consumers without substantially
increasing health protections.” 23 Accordingly, FTC staff recommended that policymakers and
other officials “[r]escind, or refrain from adopting, requirements that an Internet seller have a

24Id. at 31.
25See id. at 8. See, e.g., FDA Center for Devices and Radiological Health, Buying
Contact Lenses on the Internet, by Phone, or by Mail: Questions and Answers (2002), available
at http://www.fda.gov/cdrh/consumer/buycontactqa.html. Disposable contact lenses prevent
oxygen from reaching the cornea, and lack of oxygen can lead to severe eye damage. Therefore,
to lower their health risks, it is important that a patient adhere to the doctor’s recommended
wearing schedule, removing and replacing the lenses when recommended.
26 Contact Lens Report at 9.
27See 21 U.S.C. §§ 331(a), 333, 352(f), and 353(b)(1).
28 For example, comments submitted to the FTC’s E-commerce workshop argued that it
was difficult for state boards to reach out-of-state sellers. See Summary of Testimony of J. Pat
7
professional license to sell replacement contact lenses. If states want to regulate such sellers
beyond prescription requirements and general state and federal consumer protection laws, they
should adopt a simple registration requirement.” 24
An examination of the benefits and costs of licensing identified by the Contact Lens
Report is helpful in evaluating the impact of Arkansas’s licensing requirement on public health
and consumers. The possible benefits include additional protections to consumer health and
welfare. The costs include possible price increases, as well as reductions in convenience, which
may also affect consumers’ health.
The Contact Lens Report recognizes that the use and sale of contact lenses involves
significant health issues. The primary health concern with contact lenses appears to be ensuring
that contact lens wearers visit their doctors regularly for eye examinations.25 Consumers may
thus endanger the health of their eyes if they obtain and wear replacement contact lenses without
a valid prescription. 26
Federal law currently requires that contact lenses only be sold to patients with valid
prescriptions, which they receive after an eye examination. First, the Fairness to Contact Lens
Consumers Act and the FTC’s Contact Lens Rule prohibit sales of contact lenses unless the
seller has a copy of the patient’s prescription or has verified that prescription with the prescriber.
Second, the Food and Drug Administration has strict labeling requirements for contact lenses,
and it has the authority to take action against the sales of such a device without a valid
prescription.27
Some have argued that a potential benefit of requiring a state professional license for
contact lens sellers is that the license may give the state additional leverage over out-of-state
sellers.28 If a seller fails to comply with prescription requirements, for example, then the state

Cummings, Jr., O.D., President, American Optometric Ass’n; Summary of the Position of the
National Ass’n of Optometrists and Opticians, available at
http://www.ftc.gov/os/2004/03/040329clreportfinal.pdf.
29 Contact Lens Report at 22. The Report did note that “[i]n comments submitted to the
workshop, [the American Optometric Association] stated that sales of contact lens without a
valid prescription were frequent, and [the National Association of Optometrists and Opticians]
stated it was difficult for state boards to reach out-of-state sellers who sold without a
prescription.” Id. at 22, n.85. Nonetheless, staff concluded in the Contact Lens Report that
concerns about quality of care issues can be addressed by enforcing contact lens prescription
requirements. Id. at 23.
30Id. at 6, 16-17, 21. The Contact Lens Report did state, however, that “[w]orkshop
participants did not provide, and FTC staff does not know of, a study that directly assesses the
impact of optical licensing on costs or prices of contact lenses in general or replacement lenses in
particular.” Id. at 16. While staff does not know of such a study, the report noted that “the idea
that licensing requirements create additional costs for consumers is hardly novel or unique to
replacement lenses” and referred to comments by Professor Kleiner on the potential impact
licensing may have on costs. Id.
31See id. at 21.
32See id.
33See id. at 23.
8
could prompt compliance by threatening to revoke the seller’s license. 	The Act, which provides
for federal enforcement of its requirement that contact lenses be sold pursuant to a valid
prescription, obviates much of the concern about the difficulty of reaching out-of-state sellers.29
Although state licensing requirements can provide health and safety benefits, it is also
important to examine the costs that a licensing requirement may impose on consumers. The
Contact Lens Report found that requiring a professional license to sell replacement contact
lenses over the Internet is likely to raise prices and/or reduce consumer choice. 30 In particular,
the need to employ a state-licensed professional, such as an optometrist, an ophthalmologist or a
dispensing optician, would likely be a costly proposition for an Internet or mail-order seller of
replacement lenses.31 Because such firms may not sell eyeglasses or conduct contact lens
fittings, they may not already have a state-licensed professional on staff. 32 Because the Board’s
interpretation of Arkansas Code § 17-90-101 almost certainly imposes additional costs on stand-
alone sellers of replacement lenses, however, requiring a state-licensed professional would likely
induce such sellers to charge higher prices to consumers or – alternatively – to exit sales entirely,
thereby harming consumers.33
There seems to be consensus that disposable lenses, especially when worn properly,

34See Report of Douglas F. Greer on Behalf of the Thirty-One Plaintiff States, filed in In
re: Disposable Contact Lens Antitrust Litigation, No. MDL 1030 at 134-35 (complaints filed
M.D. Fla. 1994) (citing studies); Contact Lens Report at 19.
35Id. at 135-36. See also Contact Lens Report at 19.
36 For example, one survey has found that fewer than 50 percent of consumers comply
with the recommended wearing schedule. McKinsey & Company, Consumer Fact Pack, filed in
In re: Disposable Contact Antitrust Litigation, at 92. The same survey found that fifty-seven
percent of consumers stated they would replace their lenses more frequently if the lenses cost
less. Id. at 97. Thirty percent specifically identified cost savings as the reason they over-wear
their lenses, stating they “try to save money by wearing [their] contact lenses for more days than
[their] doctor recommends before disposing of them.” Id. Twenty-two percent said they do not
replace their lenses as often as they should because “purchasing them is inconvenient.” See also
Contact Lens Report at 19-20.
37See Contact Lens Report at 19.
9
generally promote better eye health than do conventional daily wear lenses.34 Doctors have
reported that frequent replacement of lenses has yielded a significant decrease in eye infections
and inflammation among their patients who wear disposables.35 However, it appears that while
many consumers over-wear their disposable lenses, thus diminishing their health benefits, they
might replace their lenses more frequently if the lenses cost less. 36
Thus, to the extent that licensing raises the cost or inconvenience of obtaining disposable
replacement lenses, it may induce more individuals to over-wear their replacement contact lenses
or exacerbate the practice by persons already doing so. Thus, licensing may increase the
incidence of health problems associated with contact lens use. 37 In particular, to the extent that
contact lens wearers choose to over-wear disposable contact lenses in response to a price
increase, as a way to save money, they increase the risk of severe eye damage.
The key question, then, is whether there are incremental benefits to consumers from an
additional, more restrictive regulation such as state licensing that outweigh its accompanying
consumer costs. In this instance, it appears that the costs of such state licensing outweigh any
possible benefits. The costs of a licensing requirement would be concentrated on customers who
prefer stand-alone sellers of replacement lenses to other types of sellers. But such a requirement
would not substantially increase the health protections already provided by existing law.
The Contact Lens Report recommends that if a state finds it necessary to regulate
replacement lens sellers beyond already existing prescription requirements and general consumer
protection laws, it should consider a simple registration requirement, which could provide
additional consumer safeguards but would be less restrictive or burdensome than a state

38See id. at 20-23. For example, the Contact Lens Report notes that “California requires a
non-resident contact lens seller to be authorized in its home state, to maintain records of lenses
sold in California, and to provide a toll-free number where patients can ask questions or make
complaints and a toll-free number or e-mail address where eye care practitioners can confirm
their prescriptions.” Id. at 21.
10
licensing requirement.38 Specifically, a registration system, unlike licensing, would not require
that individuals or firms that want to sell replacement lenses fulfill expensive and unnecessary
requirements in order to do so. Rather, replacement lens sellers would merely file their names
and other required information in Arkansas and would have sufficient contact information in the
event that a particular seller engages in practices that create health risks for consumers.
IV. 	Conclusion
For these reasons, FTC staff believes that Arkansas HB 2286's release “upon request of
the patient”and release “upon payment” requirements appear to be preempted in certain
circumstances because they conflict with the Fairness to Contact Lens Consumer Act and the
Contact Lens Rule. The active verification requirement also appears to be preempted because it
conflicts with the Act and the Rule. In addition, the FTC staff recommends that if Arkansas
finds it necessary to regulate replacement lens sellers beyond already existing regulations, it
should consider a simple registration requirement instead of licensing.
Respectfully submitted,
__________________________________

11
Maureen K. Ohlhausen, Acting Director
Christopher M. Grengs, Attorney Advisor
Office of Policy Planning
__________________________________
Lydia B. Parnes, Acting Director
Thomas B. Pahl, Assistant Director, Division of Advertising Practices
Char Pagar, Attorney
Bureau of Consumer Protection
_______________________________
Luke M. Froeb, Director
Joseph Mulholland, Economist
Bureau of Economics