In March, the Times reported on the new Unilateral Pricing Policies (UPPs) of contact lens manufacturers, who have set retail price floors vendors that are substantially higher than what 1-800 Contacts, Costco, and many other retailers were charging. Pricing policies have been nutty ever since I can remember, with manufacturers' rebate plans that have all kinds of fine print.
The article quotes Johnson & Johnson as stating that 60% of their products' consumers actually saw lower prices as a result of this new price floor, because the rebate policies were simultaneously retired. But as a dedicated user of those rebates, I was looking at about a 33% increase in the price of my contacts.
To complicate matters, it also appears that my health insurance plan, new as of this year, partially covers the cost of contact lenses. I discovered this after speaking over the phone with an associate at my optometrist's office, or exactly whom the manufacturer was probably hoping I would turn to after the pricing policy was enacted. On net, I suspect my out-of-pocket expenditures on lenses may end up falling by almost 40% because of new insurance coverage and my optometrist's promotional discount.
The Times article quotes a trade publication that in turn reported remarks from the president of Johnson & Johnson in a 2014 letter to optometrists. She described their UPP as "refocus[ing] the conversation between the doctor and the patient on eye health and product performance rather than price," and as "giv[ing] the optometrist the ability to improve his or her capture rate in the office." In my case, the second of those two goals was definitely achieved. But as a long-time wearer of the same brand of contacts, I experienced precisely zero refocusing of the conversation about eye health and product performance. The idea that a pricing floor is an effective mechanism for improving the quality of eye care seems dubious at best.
