Alcon’s limited unilateral pricing policy applies only to new and innovative brands of contact lens and was introduced to encourage eye care professionals to educate their patients about the benefits of these breakthrough technologies. Alcon strongly believes that the UPP generates significant procompetitive benefits for consumers, eye care professionals, and the market for vision care products including, but not limited to: 1) encouraging ECPs to invest in learning about products covered by the UPP and educating their patients about the advantages of these products; 2) enhancing access to UPP products for consumers; 3) minimizing the ability of retailers to take advantage of the efforts of ECPs to educate their patients about UPP products; 4) encouraging innovation in new contact lens technologies; and 5) reducing unauthorized or “gray market” sales.
UPP was implemented in support of Alcon’s introduction of Dailies Total®1 water-gradient contact lenses; the most innovative lens to hit the U.S. market in at least a decade. Alcon believes cutting-edge technologies such as Dailies Total®1 require additional investments of time and effort on the part of eye care professionals to educate their patients about these new contact lenses; fit and prescribe the lenses; and, follow-up, as appropriate.
By setting a reasonable minimum price, Alcon’s limited UPP fosters the ability and willingness of eye care professionals to provide services, by reducing the risk that other resellers – who do not invest in educating their customers about Alcon products and compete on price alone – will take advantage of these efforts.
Alcon applied UPP only to its new and most innovative lens technologies rather than our full contact lens portfolio. After Alcon introduced its UPP, other contact lens manufacturers chose to adopt their own unilateral pricing policies. In some cases, their policies appear to apply more broadly to encompass full lens brand portfolios. Alcon remains committed to applying its UPP only to new, and breakthrough lens technologies.
Alcon believes the Utah law violates the Commerce Clause of the US Constitution and is hopeful the Appeals Court will overturn the lower court’s ruling. Alcon was the first company to file a lawsuit in the U.S. District Court for the District of Utah challenging the law and seeking a preliminary injunction against its enforcement. When the District Court denied Alcon’s motion for preliminary injunction, permitting the law to take effect, we appealed to the Tenth Circuit.
While Alcon continues to defend its position in court, our focus remains on those efforts which have the greatest long-term benefit for our customers and the patients they serve. We therefore also dedicate our financial investments to: 1) developing breakthrough technologies that advance patient eye health; 2) selling our portfolio of contact lenses only to customers who purchase directly from Alcon or our authorized distributors; 3) enhancing consumer education about the advantages of contact lenses for vision correction; 4) further developing our Vision Care sales force, which provides both patient and product education to practitioners; and 5) supporting major initiatives that raise awareness about the importance of annual eye exams as well as humanitarian programs that grant access to vital eye care to those in need.