Lens suit settled for $60 million A Johnson & Johnson unit allegedly kept prices high by restricting access to its distribution network.

Posted: May 24, 2001

Johnson & Johnson Vision Care Inc. has agreed to pay up to $60 million to settle an antitrust case alleging that the company was able to charge artificially high prices because it blocked pharmacies and mail-order companies from its distribution network.

The suit was filed by 32 state attorneys general, including Pennsylvania's. It alleged that the Johnson & Johnson unit and two other contact-lens manufacturers conspired with the American Optometric Association to keep their products out of distribution channels that did not have an optometrist on site.

James A. Donohue, chief deputy Pennsylvania attorney general, said experts estimated that the alleged agreements cost consumers an additional $1 per six-pack of lenses, which ranged in price from $19 to $27.

Johnson & Johnson, the maker of Acuvue lenses, agreed to the settlement after five weeks of trial in U.S. District Court in Jacksonville, Fla.

Johnson & Johnson said it would pay $30 million in rebates to customers, $25 million into a fund for attorneys' fees and administration costs of the settlement, and $5 million in cash or coupons to consumers who had worn Johnson & Johnson lenses.

Jerry Ostrov, chairman of the vision care unit, said the company settled because the settlement provided assurances that its products would be sold only to patients with proper prescriptions and not to resellers.

Johnson & Johnson was the last plaintiff to settle in the case. Bausch & Lomb agreed in March to pay up to $17.5 million. Ciba Vision Corp. had settled in 1997 for $5 million.

The three companies denied the allegations in the case, despite agreeing to settle.

The American Optometric Association also denied the allegations, but agreed to pay $750,000 to settle, Ed Groobert, a lawyer for the association, said yesterday.

The case originated with class-action suits filed in 1994. The preliminary settlement was approved late Tuesday by U.S. District Judge Harvey E. Schlesinger. Final approval is scheduled for September.

Consumers can obtain a claim form to register for the Johnson & Johnson benefits package by calling 1-888-437-1294 or register at www.acuvue.com.

Susan Warner's e-mail address is swarner@phillynews.com.

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