A California ophthalmologist has filed a class action lawsuit against VISX Inc., charging that the leading manufacturer of excimer lasers for vision correction breached contracts when it changed its license fee structure earlier this year.

VISX doesn't comment directly on pending litigation, but Lola Wood, manager of investor relations for the company, says VISX took the action to expand the market for the procedure.

"We lowered our per-procedure fee 60% to make laser vision correction affordable to more people," asserts Wood.

Kenneth M. York, M.D., F.A.C.S., who operates York Laser Eye Medical Centers in Glendora and Beverly Hills, Calif., filed the suit in Los Angeles Superior Court on Oct. 2.

He claims that shortly after VISX changed its fee structure in February, lowering its basic per-procedure fee from $250 to $100 but abruptly ending its free retreatment policy, he attempted to return 28 pre-paid VisionKey procedure cards, which he had bought under the "old" VISX program at the higher cost. Dr. York claims that he was denied a full credit or refund and was offered a credit of only $100 per card.

"We filed a class action because we believe Dr. York is typical of many VISX licensees in that he purchased a number of VisionKey cards in advance under the terms of the old program," says Eric J. Schindler of Schindler & Harris, the Laguna Beach, Calif., law firm that's representing Dr. York.

"VISX changed an existing contract without obtaining the consent of its licensees," he continues. "By refusing to give full credit for the pre-paid VisionKey cards, and by failing to honor the free retreatment policy that was also part of the license agreement, the company didn't live up to its contract."

VISX spokesperson Wood says the company offers 24-hour turnaround on VisionKey cards, eliminating the need for most refractive surgeons to keep a large number of cards on hand. She also notes that the retreatment rate on procedures performed with VISX lasers is approximately 7%.

There were rumblings from two major VISX licensees when the company changed its fee structure.

Laser Vision Centers Inc., in March took a $2.4 million extraordinary charge, which it says was almost entirely related to the VISX action. At that time, Laser Vision Chairman and CEO John J. Klobnak said he was disappointed that his company wasn't consulted about the changes in the VISX program and had received no warning that such changes were being contemplated.

Elias Vamvakas, chairman and CEO of TLC Laser Eye Centers, Inc., says he was "very upset" when VISX changed its policies without consulting its licensees.

"We have 60 VISX lasers," notes Vamvakas. "What VISX did was improper. I would estimate that it easily cost us $3 million."

But Stephen Joffe, M.D, chairman and CEO of LCA-Vision, welcomed VISX' action, congratulating the company for its foresight and calling the 60% fee reduction a key step in making laser vision correction more affordable.