- Feb 24, 2001
- 17,085
- 3,555
- 113
- School/Org
- University of Michigan Medical School
- City
- Lake Oswego
- State
- OR
The following is a transcription of an interview with Phil Keefer, President Vistakon Americas. The interview was conducted by Paul Farkas on October 16, 2003. Walt Mayo had performed an interview with Mr. Keefer about 6 months ago, but seniordoc readership still had more questions.
Mr. Keefer graciously agreed to grant us an hour to try to clear up some lingering questions.
PF = Paul Farkas, MS, OD, FAAO; His questions are italicized
PK = Phil Keefer.
Paul Farkas: since the agreement went into effect (with 1800Contacts) are you satisfied that 1800Contacts and the mail-order vendors have kept up their end of the bargain?
Phil Keefer: I think that we've been satisfied in most cases. The companies that we are doing business with now have contracts that they have to abide by, which include the Rx verification process. We monitor this on a regular basis by basically having people call and order product with a valid prescription, or without one to see if the doctor is consulted first, and whether or not it's shipped according to the way we've laid out in the contract. Since we started opening alternate channel accounts, we have terminated two mail order accounts, and we've put a third on probation. Have you had a chance to read the article in the September CL spectrum?
PF: Absolutely. It was very impressive.
PK: The study, "Finding the Right Prescription For Mail-order Sales", published in this issue, showed that while 8% of Vistakon orders were filled without a valid prescription by mail-order companies, that this rate is significantly better than our competitors which had around 90% or more of their invalid product prescriptions filled..
PF: Right
PK: Of that 8%, one account was responsible for most of those shipments. That account has been placed on probation. So, if this account doesn't clean up their act then they'll be terminated as well. By the way, this account was not 1-800 Contacts.
PF: And these are "professional shoppers", or "in-house" people doing the testing?
PK: The purchases were not made in-house. They were made by an outside company that we work with and they handled all the logistics.
PF: Great. Do you have agreements with all mail order companies?
PK: No. We have about 28 "Alternative Channel" accounts. Two are authorized only as distributors and 26 are Internet/mail orders marketers. That would include retail chains, 3rd party services for Insurance carriers etc. under some kind of contract, the vast majority of the vendors that exist.
PF: and the few companies that aren't under contract, probably get their lenses from the "grey market" ?
PK: We continue to work on that as an issue, but most of the "big boys" are under contract to verify Vistakon product prescriptions before product is shipped..
PF: It's interesting how this came about on seniordoc. This meeting came about from a post: "This morning, when i came to my office, i found the following message on my answering machine: 'TO VERIFY THE INFORMATION YOUR PATIENT HAS GIVEN US.. PRESS 1. OTHERWISE PRESS 2.' There was a 2-second pause, then, 'WE HAVE NOTED THAT YOU'VE REFUSED TO VERIFY THE PRESCRIPTION, YOUR PATIENT HAS GIVEN US.' Then they hung up." It didn't indicate who sent the phone call! Another optometrist replied to this message on seniordoc: "In my small practice, i also get 1-2 of these truncated calls for contact lens prescriptions exactly as quoted. I was told by 1-800Contacts staff that there was a problem in the system (Ha!). Last week was a real good one-the message gave a request for verification of Rx, a reference # was given for a particular patient. The first step was to use the phone keypad to enter my phone #. It kept rejecting my area code and wouldn't let me pass the next step. Needless to say, my lack of time and patience made me just give up and move on with my life. It will be very interesting to see how many ways they can skin this cat." A final person referring to 1800Contacts: "I've been receiving calls like this from 1800Contacts for at least 2 months. I refuse to sit on the phone for 3 minutes to press numbers to respond to requests. First of all, the recorded message starts giving patient information immediately, and doesn't give us any time to find the chart. Also, i've faxed them and i've refused to respond to the system if i cannot respond with an identical system, which there system cannot accept. I also work tuesdays through saturdays, and have arrived tuesday morning to find a message on my machine and the beginning is always cut off, because they don't wait for a beep. I strongly agree that this does not satisfy the requirement to verify the prescription".
PK: The contract we have with alternate channel accounts specifically requires that the ECP be faxed or talked to, notleft a message on the phone, to verify Vistakon prescriptions. In the article I referenced before, about 1/3 of the time a Vistakon brand is verified by phone. But 97% of those calls are live phone calls. That's very different from other manufacturers, where 68-78% of the time there is no verification process at all. And when there is a phone call to verify, 46-87% of the time it is an automated phone message with other manufacturers. Vistakon verifications are very different in this regard.
PF: So my next question was, are these shenanigans something that OD's must tolerate, how can you control 1800Contacts not living up to the spirit of the agreement?
PK: The mail order companies that we have authorized, including 1-800 Contacts, are living up to the spirit of the agreement with our brand.
PF: So you feel that they are doing it with non-acuvue brands?
PK: Well, it's documented in the study that was published by 9 independent optometrists that 89-96% of the time, other manufacturers brands are NOT verified before shipment.
PF: Good to know.
PK: Just to be clear, verification processes are only in place with Acuvue brands. In other words, our contract with 1800Contacts or any of our other customers are not obligated to do any of these things for any other manufacturer's brands.
PF: Understood. So if they [mail order companies] see that the patient is wearing an Acuvue lens, they are going to use a different system than if the patient wears a different type of lens. They will have 2 different modes of asking for the prescription?
PK: That is true. It's been well-documented in the study of what actually happens in the marketplace that Vistakon brands are handled significantly different, and that's the reason that they are less likely to be filled with an invalid prescription. One of the big differences is that we don't allow inaudible, automated phone call systems to be used to meet our verification requirements. If a company wishes to use that kind of system for our brand, they cannot be a customer.
PF: At this time, it may also be good to define what the "8 hour" system is. It has to be 8 business hours, however if an OD is closed on a monday or some parts of the country on a wednesday, if the call does come in at these times, it would be assumed that this is an accurate prescription.
PK: Let me refer back to the agreement. Generally speaking, the 8 business hours translates to about a 24 hour period. 1800Contacts gets most of their calls between 10 and 2 o'clock. Lets say at 10am they get a call from a consumer, and they send your office a fax asking for verification of a prescription. You have 8 business hours (essentially, until 10am the next morning) to respond to that. So, if that's on a wednesday or if it's on a sunday or holiday, you have until the following BUSINESS day when you're back in the office to respond.
PF: So, if they send one out on a saturday... Is saturday considered a business day?
PK: Saturday is considered a business day, but Sunday is not. So, in either case you have until monday to respond.
PF: And your feeling when you did these studies was that they didn't start shoving a lot of these calls into saturdays.
PK: No, they are highly concerned about customer service. The consumers that call them are basically on hold to get Acuvue lenses from mail-order companies until the verification process is completed. Under our agreement, mail order companies have to wait essentially up to 24 hours before they can respond to an Acuvue order. They send out the fax in an automated fashion when they receive the actual order. They do not hold them until any specific time.
PF: So it's really based on the 'laws of chance' as to when the practitioner will get the fax. It shouldn't be an issue.
PK: We have no evidence, anywhere that someone is holding the calls until 9am in the morning and faxing them out. it would be impractical.
PF: Ok, we can move on then
PK: If i could, i'd like to make one point. After we made our agreement with 1-800 Contacts, many ECPs were upset. When we explained that the agreement would result in more Acuvue wearer eye exams, most ECPs took a "wait and see" position. They were skeptical about 1800s compliance and our resolve to enforce the agreement if 1800 did not comply. That's one of the rationales for why we went ahead and sponsored the study that was published. And while we sponsored it, we did not administrate it. It was all done by an independent company, using these independent doctor's offices. The reason we did it, number one, was if it's working, what is the value to the doctor, and can we document that? And this study clearly documents that Acuvue wearers are going back to the doctors for eye exams because they cannot get Acuvue without a valid prescription. We estimate that this year 175,000 new Acuvue eye exams have been created. If you figure an eye exam is worth $70, that's over $12 million worth of eye exam fees generated because of this agreement.
PF: Very impressive! Now, on to another topic, from one of our seniordoc readers. "Last week, I was at Sears buying a rug. At the checkout counter was a sign advertising Acuvue and Acuvue 2 contact lenses for $12.50 a box. Every month my Vistakon bill is over $1000, but my wholesale cost for these lenses is $13.00. How can Vistakon say that they are for independent doctors when they sell bulk to Sears so that they can afford to price so low that Sears can sell them for less than I can buy them! My rep has claimed that these companies do loss-leaders. But i find it hard to believe that they are paying anywhere close to $13.00 a box." Another person commented: "I've heard the company line that 1800Contacts pays the same price per box as private docs. I also know that some big chains get advertising rebates of several thousand dollars in lieu of a discount for making large block purchases. What kind of deal has J&J made with 1800Contacts?" Other comments, which i'm sure everyone has heard privately: "Severe discounts are offered by companies like WalMart and Costco, making it impossible for private practice ODs to consider prescribing Acuvue. This must make it a marketing challenge for you." My question is, do large purchasers get discounts? Can large volume private practice OD's and buying groups receive the same discounts?
PK: I can't speak to what our competitors offer in the way of discounts, but I believe that we have the flattest pricing of any company in our industry. Our pricing policies are pretty well documented. If you buy a case of a product, you'll get $1 off. If you buy 100 multipacks at a time, as do many independent ECPs, you'll get $1 off. So, for almost all situations, the private ECP buying 100 multipacks at a time can get the same price as anybody else. However, there are other things that we do with some of the major companies that we deal with, but those are predicated on what efficiencies that they create for us. We can pass on some of the savings created by efficiencies, but at the same time, they create costs for these customers. As an example, because we don't have to ship to a retailer's 500 outlets, we save money because we only ship to one warehouse location. However,these customers incur the cost of shipping product to all their stored. So, essentially any discount is basically offset by extra cost. From a practical manner of speaking, it's a level playing field in terms of price. The examples your members are referring to, probably are people or companies that are advertising pricing net of the $30 rebate that we are required to offer to everybody. So, if an ECPs normal selling price is $20.00 a box for Acuvue 2 and they offer the $30.00 rebate, that effectively lowers the selling price down to $16.25
PF: Therefore, it's safe to say, if they could meet the same parameters as the large purchasers, everyone can get the same disount.
PK: That's true,
PF: Onto another topic: Are contact lenses a medical device, requiring professional prescription and supervision, or a cosmetic extension of eye makeup? This was brought on by an OD question: "At a recent CE meeting, a Vistakon rep touted their company's great marketing effort to push colored contacts at teenage girls, and explain to us how profitable it will be to our practices. This seems to be a direct contraindication to a medical device. Do teenage girls really need colored contact lenses? I guess my biggest question is why don't they treat contact lenses like the medical device they are supposed to be?" This was followed-up by the comment: "The diminishment of Acuvue contact lenses as a medical device has been exploited by lay corporations to the point that ECPS no longer have the desire to prescribe your lens, there is no profit in it, nor regard to compliance by patients, and no quality control for patient safety. What can Vistakon do to change this, or is it too late?"
PK: We recognize that our products are a prescription medical device. And we market them that way. And, yes, there is an opportunity in the marketplace for teenage girls and boys as well as others that are interested in colored contact lenses. One thing that is important to note is that if you look at any one of the current ads we are running, not only does it say that you should see your ECP for an eye exam, it actually shows the people in the ad going to the doctor and getting an eye exam.
PF: And i've got to compliment you that Halloween is just around the corner, and i haven't seen too many bizarre ads to the practitioner to get these wild colors for halloween. I don't know if Vistakon even makes those silly types of cosmetic lenses. This to me is really a danger to the public, with kids just putting in lenses to make them look "funny" one night a year.
PK: Vistakon dies not market "Halloween" lenses. We recognized when we got into the colored contact lens business that there is a fine line. And we have created our advertising with that in mind. Every one of our ads says "So I took my friend to the doctor..." and the ad shows the patient in the chair, being examined.
PF: Great. My next question: "it appears that vistakon's strategy made an impact on illegal mail order sales. Have you made an effort to work with other manufacturers to join with Vistakon to require valid prescriptions?"
PK: No, we really can't do that. We all have our own policies and we cannot talk about them. We can't talk about price either. However, other manufacturers can contact the mail order companies they sell to and ask them to do the same thing.
PF: Just as a side comment, if more ODs would press the other companies to do it, perhaps they would take notice.
PK: What kind of reaction have you heard from your colleagues about the Contact Lens Spectrum article, with respect to the vast difference in the % of expired prescriptions that have been filled with other manufacturers' product?
PF: Optometrists seem very slow to react. The article to me, when i saw it, seems very complimentary. There should be more articles that show these differences. Will it change them to move into Acuvues from private labels? I don't know. Optometrists are so fearful of losing patients, that sometimes their judgement is clouded. They should be giving the patients lenses that are the best for them.
PK: Private label was also covered in the article. Private-label products are dispensed or substituted, without a prescription, 78% of the time when ordered from mail-order companies.
PF: Switching gears for a moment. I'm not sure that you're aware that there was a grassroots movement, started by one optometrist Tim Milburn, a young guy in practice 2-3 years, decided that enough was enough, and he wanted to get optometrists to sign a petition to go to the FDA to get them to enforce existing contact lens laws (http://www.seniordoc.org/nclep). So far, there are about 1200 signatures, with lots of comments about how contact lenses should be prescription items. Question: Would Vistakon if approached by the FDA agree that contact lenses should be a prescription item? would you take a neutral approach? Should they ultimately become an OTC item?
PK: Well, they are a prescription item...
PF: Right, but right now there's a push to make some plano lenses for example OTC items
PK: We do not support that. We've come out on record that all contact lenses, including colored lenses, are a medical devices.
PF: They should be a prescription item, with an expiration date, and a certain # of refills. The patient has to return to the practitioner for re-evaluation. That would be the position of Vistakon.
PK: Absolutely.
PF: Next question I think you already answered, but... Many ODs would like to see campaigns like... who was it, Pepsodent that said "Brush your teeth twice a day, and see your dentist twice a year". They would like to see more proactive advertising like that, to get patients into the doctor's office to get re-exams. You've indicated that you've already done this, but i'll ask the question anyway, because it was asked of me: "Will there be proactive advertising from Vistakon to make the public understand that periodic eye exams are required before contact lenses are replaced?"
PK: There will not be public service announcement type of advertising. However, our advertising does say and show the consumer that they need to go get their eyes examined before they get Acuvue contact lenses, and we show that happening. We have also put together the Acuvue Eye Health Advisor program, which consists of brochures and posters for the doctor's office, which have very little branding. They explain to patients the value of an eye exam, telling them all the things that the doctor is actually checking for during the exam.
PF: But there will be no public service-type of announcements?
PK: Not on TV, but like I said, we have created these brochures and posters for the doctor's office.
PF: I'm going to the GWCO in Oregon. Will the handouts be at the booth?
PK: Yes.
PF: Getting close to the end here. Question: Vistakon has been making a strong push for doctors to order product online, through VisionWeb and interfaces with other E-commerce products like PatientWire. What are you doing at the clinician level to entice their staff to order online as opposed to using the telephone?
PK: We are being very proactive in telling offices about acuvue.com, and what they can do through this website -- placing orders, looking at invoices, tracking orders and that sort of thing. We've also done a couple of promotions this year. Earlier in the year, if a practitioner ordered via acuvue.com at least 10x during a designated two month period, they'd get a Neutrogena gift pack. This was to incent them to try it enough times to get comfortable with the process. We also have a promotion available that any revenue product that is ordered via acuvue.com will receive free shipping, regardless of quantity ordered.
PF: Any more thoughts?
PK:Yes. Your readers are interested in the original 1800Contacts agreement, and whether or not it is working in their favor. The study we have discussed proves that it is favorable to ECPs, generating over $12+mm in new exam fees this year alone. Usually, when a doctor gets a fax from any mail order company asking for verification of an Acuvue prescription, their first reaction is negative, "here is another patient that i've lost to mail order". But these faxes represent patients coming back to the ECP because they need a regular eye exam to be able to get Acuvue. It's almost by the error of omission that ECPs don't think about the fact that they don't hear anything from mail-order companies about other manufacturers' products. Why? Because these "other" patients are getting non-Acuvue product without any prescription verification 89-96% of the time
PF: Right
PK: Vistakon is the only manufacturer that has a system in place that ensures that the doctor has a chance to verify the prescription. And clearly, all manufacturer's brands are available through mail order companies, and private label brands are available or substituted for. I just hope that clinicians who said "lets wait and see", read this study and are convinced that our required verification process is having a positive effect on them.
PF: Thanks so much for taking the time to speak with me.
PK: Thanks!
Mr. Keefer graciously agreed to grant us an hour to try to clear up some lingering questions.
PF = Paul Farkas, MS, OD, FAAO; His questions are italicized
PK = Phil Keefer.
Paul Farkas: since the agreement went into effect (with 1800Contacts) are you satisfied that 1800Contacts and the mail-order vendors have kept up their end of the bargain?
Phil Keefer: I think that we've been satisfied in most cases. The companies that we are doing business with now have contracts that they have to abide by, which include the Rx verification process. We monitor this on a regular basis by basically having people call and order product with a valid prescription, or without one to see if the doctor is consulted first, and whether or not it's shipped according to the way we've laid out in the contract. Since we started opening alternate channel accounts, we have terminated two mail order accounts, and we've put a third on probation. Have you had a chance to read the article in the September CL spectrum?
PF: Absolutely. It was very impressive.
PK: The study, "Finding the Right Prescription For Mail-order Sales", published in this issue, showed that while 8% of Vistakon orders were filled without a valid prescription by mail-order companies, that this rate is significantly better than our competitors which had around 90% or more of their invalid product prescriptions filled..
PF: Right
PK: Of that 8%, one account was responsible for most of those shipments. That account has been placed on probation. So, if this account doesn't clean up their act then they'll be terminated as well. By the way, this account was not 1-800 Contacts.
PF: And these are "professional shoppers", or "in-house" people doing the testing?
PK: The purchases were not made in-house. They were made by an outside company that we work with and they handled all the logistics.
PF: Great. Do you have agreements with all mail order companies?
PK: No. We have about 28 "Alternative Channel" accounts. Two are authorized only as distributors and 26 are Internet/mail orders marketers. That would include retail chains, 3rd party services for Insurance carriers etc. under some kind of contract, the vast majority of the vendors that exist.
PF: and the few companies that aren't under contract, probably get their lenses from the "grey market" ?
PK: We continue to work on that as an issue, but most of the "big boys" are under contract to verify Vistakon product prescriptions before product is shipped..
PF: It's interesting how this came about on seniordoc. This meeting came about from a post: "This morning, when i came to my office, i found the following message on my answering machine: 'TO VERIFY THE INFORMATION YOUR PATIENT HAS GIVEN US.. PRESS 1. OTHERWISE PRESS 2.' There was a 2-second pause, then, 'WE HAVE NOTED THAT YOU'VE REFUSED TO VERIFY THE PRESCRIPTION, YOUR PATIENT HAS GIVEN US.' Then they hung up." It didn't indicate who sent the phone call! Another optometrist replied to this message on seniordoc: "In my small practice, i also get 1-2 of these truncated calls for contact lens prescriptions exactly as quoted. I was told by 1-800Contacts staff that there was a problem in the system (Ha!). Last week was a real good one-the message gave a request for verification of Rx, a reference # was given for a particular patient. The first step was to use the phone keypad to enter my phone #. It kept rejecting my area code and wouldn't let me pass the next step. Needless to say, my lack of time and patience made me just give up and move on with my life. It will be very interesting to see how many ways they can skin this cat." A final person referring to 1800Contacts: "I've been receiving calls like this from 1800Contacts for at least 2 months. I refuse to sit on the phone for 3 minutes to press numbers to respond to requests. First of all, the recorded message starts giving patient information immediately, and doesn't give us any time to find the chart. Also, i've faxed them and i've refused to respond to the system if i cannot respond with an identical system, which there system cannot accept. I also work tuesdays through saturdays, and have arrived tuesday morning to find a message on my machine and the beginning is always cut off, because they don't wait for a beep. I strongly agree that this does not satisfy the requirement to verify the prescription".
PK: The contract we have with alternate channel accounts specifically requires that the ECP be faxed or talked to, notleft a message on the phone, to verify Vistakon prescriptions. In the article I referenced before, about 1/3 of the time a Vistakon brand is verified by phone. But 97% of those calls are live phone calls. That's very different from other manufacturers, where 68-78% of the time there is no verification process at all. And when there is a phone call to verify, 46-87% of the time it is an automated phone message with other manufacturers. Vistakon verifications are very different in this regard.
PF: So my next question was, are these shenanigans something that OD's must tolerate, how can you control 1800Contacts not living up to the spirit of the agreement?
PK: The mail order companies that we have authorized, including 1-800 Contacts, are living up to the spirit of the agreement with our brand.
PF: So you feel that they are doing it with non-acuvue brands?
PK: Well, it's documented in the study that was published by 9 independent optometrists that 89-96% of the time, other manufacturers brands are NOT verified before shipment.
PF: Good to know.
PK: Just to be clear, verification processes are only in place with Acuvue brands. In other words, our contract with 1800Contacts or any of our other customers are not obligated to do any of these things for any other manufacturer's brands.
PF: Understood. So if they [mail order companies] see that the patient is wearing an Acuvue lens, they are going to use a different system than if the patient wears a different type of lens. They will have 2 different modes of asking for the prescription?
PK: That is true. It's been well-documented in the study of what actually happens in the marketplace that Vistakon brands are handled significantly different, and that's the reason that they are less likely to be filled with an invalid prescription. One of the big differences is that we don't allow inaudible, automated phone call systems to be used to meet our verification requirements. If a company wishes to use that kind of system for our brand, they cannot be a customer.
PF: At this time, it may also be good to define what the "8 hour" system is. It has to be 8 business hours, however if an OD is closed on a monday or some parts of the country on a wednesday, if the call does come in at these times, it would be assumed that this is an accurate prescription.
PK: Let me refer back to the agreement. Generally speaking, the 8 business hours translates to about a 24 hour period. 1800Contacts gets most of their calls between 10 and 2 o'clock. Lets say at 10am they get a call from a consumer, and they send your office a fax asking for verification of a prescription. You have 8 business hours (essentially, until 10am the next morning) to respond to that. So, if that's on a wednesday or if it's on a sunday or holiday, you have until the following BUSINESS day when you're back in the office to respond.
PF: So, if they send one out on a saturday... Is saturday considered a business day?
PK: Saturday is considered a business day, but Sunday is not. So, in either case you have until monday to respond.
PF: And your feeling when you did these studies was that they didn't start shoving a lot of these calls into saturdays.
PK: No, they are highly concerned about customer service. The consumers that call them are basically on hold to get Acuvue lenses from mail-order companies until the verification process is completed. Under our agreement, mail order companies have to wait essentially up to 24 hours before they can respond to an Acuvue order. They send out the fax in an automated fashion when they receive the actual order. They do not hold them until any specific time.
PF: So it's really based on the 'laws of chance' as to when the practitioner will get the fax. It shouldn't be an issue.
PK: We have no evidence, anywhere that someone is holding the calls until 9am in the morning and faxing them out. it would be impractical.
PF: Ok, we can move on then
PK: If i could, i'd like to make one point. After we made our agreement with 1-800 Contacts, many ECPs were upset. When we explained that the agreement would result in more Acuvue wearer eye exams, most ECPs took a "wait and see" position. They were skeptical about 1800s compliance and our resolve to enforce the agreement if 1800 did not comply. That's one of the rationales for why we went ahead and sponsored the study that was published. And while we sponsored it, we did not administrate it. It was all done by an independent company, using these independent doctor's offices. The reason we did it, number one, was if it's working, what is the value to the doctor, and can we document that? And this study clearly documents that Acuvue wearers are going back to the doctors for eye exams because they cannot get Acuvue without a valid prescription. We estimate that this year 175,000 new Acuvue eye exams have been created. If you figure an eye exam is worth $70, that's over $12 million worth of eye exam fees generated because of this agreement.
PF: Very impressive! Now, on to another topic, from one of our seniordoc readers. "Last week, I was at Sears buying a rug. At the checkout counter was a sign advertising Acuvue and Acuvue 2 contact lenses for $12.50 a box. Every month my Vistakon bill is over $1000, but my wholesale cost for these lenses is $13.00. How can Vistakon say that they are for independent doctors when they sell bulk to Sears so that they can afford to price so low that Sears can sell them for less than I can buy them! My rep has claimed that these companies do loss-leaders. But i find it hard to believe that they are paying anywhere close to $13.00 a box." Another person commented: "I've heard the company line that 1800Contacts pays the same price per box as private docs. I also know that some big chains get advertising rebates of several thousand dollars in lieu of a discount for making large block purchases. What kind of deal has J&J made with 1800Contacts?" Other comments, which i'm sure everyone has heard privately: "Severe discounts are offered by companies like WalMart and Costco, making it impossible for private practice ODs to consider prescribing Acuvue. This must make it a marketing challenge for you." My question is, do large purchasers get discounts? Can large volume private practice OD's and buying groups receive the same discounts?
PK: I can't speak to what our competitors offer in the way of discounts, but I believe that we have the flattest pricing of any company in our industry. Our pricing policies are pretty well documented. If you buy a case of a product, you'll get $1 off. If you buy 100 multipacks at a time, as do many independent ECPs, you'll get $1 off. So, for almost all situations, the private ECP buying 100 multipacks at a time can get the same price as anybody else. However, there are other things that we do with some of the major companies that we deal with, but those are predicated on what efficiencies that they create for us. We can pass on some of the savings created by efficiencies, but at the same time, they create costs for these customers. As an example, because we don't have to ship to a retailer's 500 outlets, we save money because we only ship to one warehouse location. However,these customers incur the cost of shipping product to all their stored. So, essentially any discount is basically offset by extra cost. From a practical manner of speaking, it's a level playing field in terms of price. The examples your members are referring to, probably are people or companies that are advertising pricing net of the $30 rebate that we are required to offer to everybody. So, if an ECPs normal selling price is $20.00 a box for Acuvue 2 and they offer the $30.00 rebate, that effectively lowers the selling price down to $16.25
PF: Therefore, it's safe to say, if they could meet the same parameters as the large purchasers, everyone can get the same disount.
PK: That's true,
PF: Onto another topic: Are contact lenses a medical device, requiring professional prescription and supervision, or a cosmetic extension of eye makeup? This was brought on by an OD question: "At a recent CE meeting, a Vistakon rep touted their company's great marketing effort to push colored contacts at teenage girls, and explain to us how profitable it will be to our practices. This seems to be a direct contraindication to a medical device. Do teenage girls really need colored contact lenses? I guess my biggest question is why don't they treat contact lenses like the medical device they are supposed to be?" This was followed-up by the comment: "The diminishment of Acuvue contact lenses as a medical device has been exploited by lay corporations to the point that ECPS no longer have the desire to prescribe your lens, there is no profit in it, nor regard to compliance by patients, and no quality control for patient safety. What can Vistakon do to change this, or is it too late?"
PK: We recognize that our products are a prescription medical device. And we market them that way. And, yes, there is an opportunity in the marketplace for teenage girls and boys as well as others that are interested in colored contact lenses. One thing that is important to note is that if you look at any one of the current ads we are running, not only does it say that you should see your ECP for an eye exam, it actually shows the people in the ad going to the doctor and getting an eye exam.
PF: And i've got to compliment you that Halloween is just around the corner, and i haven't seen too many bizarre ads to the practitioner to get these wild colors for halloween. I don't know if Vistakon even makes those silly types of cosmetic lenses. This to me is really a danger to the public, with kids just putting in lenses to make them look "funny" one night a year.
PK: Vistakon dies not market "Halloween" lenses. We recognized when we got into the colored contact lens business that there is a fine line. And we have created our advertising with that in mind. Every one of our ads says "So I took my friend to the doctor..." and the ad shows the patient in the chair, being examined.
PF: Great. My next question: "it appears that vistakon's strategy made an impact on illegal mail order sales. Have you made an effort to work with other manufacturers to join with Vistakon to require valid prescriptions?"
PK: No, we really can't do that. We all have our own policies and we cannot talk about them. We can't talk about price either. However, other manufacturers can contact the mail order companies they sell to and ask them to do the same thing.
PF: Just as a side comment, if more ODs would press the other companies to do it, perhaps they would take notice.
PK: What kind of reaction have you heard from your colleagues about the Contact Lens Spectrum article, with respect to the vast difference in the % of expired prescriptions that have been filled with other manufacturers' product?
PF: Optometrists seem very slow to react. The article to me, when i saw it, seems very complimentary. There should be more articles that show these differences. Will it change them to move into Acuvues from private labels? I don't know. Optometrists are so fearful of losing patients, that sometimes their judgement is clouded. They should be giving the patients lenses that are the best for them.
PK: Private label was also covered in the article. Private-label products are dispensed or substituted, without a prescription, 78% of the time when ordered from mail-order companies.
PF: Switching gears for a moment. I'm not sure that you're aware that there was a grassroots movement, started by one optometrist Tim Milburn, a young guy in practice 2-3 years, decided that enough was enough, and he wanted to get optometrists to sign a petition to go to the FDA to get them to enforce existing contact lens laws (http://www.seniordoc.org/nclep). So far, there are about 1200 signatures, with lots of comments about how contact lenses should be prescription items. Question: Would Vistakon if approached by the FDA agree that contact lenses should be a prescription item? would you take a neutral approach? Should they ultimately become an OTC item?
PK: Well, they are a prescription item...
PF: Right, but right now there's a push to make some plano lenses for example OTC items
PK: We do not support that. We've come out on record that all contact lenses, including colored lenses, are a medical devices.
PF: They should be a prescription item, with an expiration date, and a certain # of refills. The patient has to return to the practitioner for re-evaluation. That would be the position of Vistakon.
PK: Absolutely.
PF: Next question I think you already answered, but... Many ODs would like to see campaigns like... who was it, Pepsodent that said "Brush your teeth twice a day, and see your dentist twice a year". They would like to see more proactive advertising like that, to get patients into the doctor's office to get re-exams. You've indicated that you've already done this, but i'll ask the question anyway, because it was asked of me: "Will there be proactive advertising from Vistakon to make the public understand that periodic eye exams are required before contact lenses are replaced?"
PK: There will not be public service announcement type of advertising. However, our advertising does say and show the consumer that they need to go get their eyes examined before they get Acuvue contact lenses, and we show that happening. We have also put together the Acuvue Eye Health Advisor program, which consists of brochures and posters for the doctor's office, which have very little branding. They explain to patients the value of an eye exam, telling them all the things that the doctor is actually checking for during the exam.
PF: But there will be no public service-type of announcements?
PK: Not on TV, but like I said, we have created these brochures and posters for the doctor's office.
PF: I'm going to the GWCO in Oregon. Will the handouts be at the booth?
PK: Yes.
PF: Getting close to the end here. Question: Vistakon has been making a strong push for doctors to order product online, through VisionWeb and interfaces with other E-commerce products like PatientWire. What are you doing at the clinician level to entice their staff to order online as opposed to using the telephone?
PK: We are being very proactive in telling offices about acuvue.com, and what they can do through this website -- placing orders, looking at invoices, tracking orders and that sort of thing. We've also done a couple of promotions this year. Earlier in the year, if a practitioner ordered via acuvue.com at least 10x during a designated two month period, they'd get a Neutrogena gift pack. This was to incent them to try it enough times to get comfortable with the process. We also have a promotion available that any revenue product that is ordered via acuvue.com will receive free shipping, regardless of quantity ordered.
PF: Any more thoughts?
PK:Yes. Your readers are interested in the original 1800Contacts agreement, and whether or not it is working in their favor. The study we have discussed proves that it is favorable to ECPs, generating over $12+mm in new exam fees this year alone. Usually, when a doctor gets a fax from any mail order company asking for verification of an Acuvue prescription, their first reaction is negative, "here is another patient that i've lost to mail order". But these faxes represent patients coming back to the ECP because they need a regular eye exam to be able to get Acuvue. It's almost by the error of omission that ECPs don't think about the fact that they don't hear anything from mail-order companies about other manufacturers' products. Why? Because these "other" patients are getting non-Acuvue product without any prescription verification 89-96% of the time
PF: Right
PK: Vistakon is the only manufacturer that has a system in place that ensures that the doctor has a chance to verify the prescription. And clearly, all manufacturer's brands are available through mail order companies, and private label brands are available or substituted for. I just hope that clinicians who said "lets wait and see", read this study and are convinced that our required verification process is having a positive effect on them.
PF: Thanks so much for taking the time to speak with me.
PK: Thanks!
Last edited:
