Contact Lens Business
A Tough Year for Contact Lenses
During 2001, the industry was hit hard -- and M.D.s felt it.
BY CHRISTOPHER KENT, SENIOR ASSOCIATE EDITOR

2001 was not a good year for the U.S. economy. The economic slowdown that began the year deteriorated into a full-blown recession; then September 11th caused consumers to become even more conservative in their spending.

All of these changes had a profound impact on the contact lens industry. According to survey data, the number of contact lens wearers dropped 1.4%, after growing 3% during '99 and 4% in 2000. (Actually, the number of soft lens wearers stayed about the same; the decline in total wearers was caused by a 9% drop in the number of patients wearing rigid gas permeable [RGP] lenses.)

In particular, contact lens dispensing by ophthalmologists lost a lot of ground in 2001. The one bright spot was the continuing growth of the popularity of disposable contact lenses.

Here, I'd like to review some statistics that may help to clarify what happened during 2001.

Note: The numbers discussed in this article are based on survey data collected every quarter by Health Products Research, Inc. (HPR), a division of Ventiv Health, Inc. HPR tallies detailed responses regarding more than 18,000 patient visits from more than 500 contact lens dispensing locations, including private ophthalmology and optometry practices, independent retail outlets and national chains. The figures given here are projections based on that collected data, weighted to compensate for factors such as region, size of practice and type of practice.

DISPENSING M.D.S: FEELING THE HEAT

Until 2001, the number of M.D. practices dispensing contact lenses had been increasing steadily, culminating in 44% growth between 1999 and 2000. But in 2001 the number of dispensing M.D.s dropped by 11.6%. The decline began in the second quarter, with 8% fewer M.D. practices dispensing by mid-year. Similar drops followed in the third and fourth quarters.

Why did so many M.D.s jump ship? As the chart above shows, the number of patient visits began to decline in the third quarter of 2000, and after a brief reprieve, dropped again during the first quarter of 2001. This could have been a response to signs of trouble in the economy. Economic indicators were starting to falter by mid-2000; it's possible that contact lens patients reacted by moving toward what they perceive to be "less expensive alternatives" for their lenses. Some M.D.s may have eliminated contact lenses from their patient offerings in response to the drop in patient visits.

Statistics, of course, can be deceptive; not every dispensing M.D. lost patients or income in the contact lens arena during 2001. Bruce H. Koffler, M.D., president of the Contact Lens Association of Ophthalmologists, said his contact lens business, part of his practice located in Lexington, Ky., grew noticeably during 2001. His income from new contact lens fits increased by 20%, and profits from replacement lenses were up 10%.

In fact, Dr. Koffler was puzzled by the decline in dispensing M.D.s. "During times of economic uncertainty, I try to diversify; that way if one program isn't working, another one takes up the slack. I'm not sure why a doctor would stop dispensing, especially since refractive surgery has lost some momentum. Contact lenses tend to be a logical alternative income builder."

MODALITIES

2001 produced a broad spectrum of changes in the popularity of lens designs and replacement schedules:

Soft torics and multifocals. The economic downturn had a powerful impact on the number of toric and multifocal lens wearers, probably because of the higher cost of these lenses:

• The overall number of soft toric wearers, which grew by nearly 50% in 2000, abruptly dropped by 17% during 2001. (Nevertheless, the number of office visits for these lenses grew slightly compared to 2000.)
• The number of soft multifocal wearers, which grew by 45% in '99 and 28% in 2000, dropped by 37% in 2001.

RGPs. The number of RGP wearers continued to decline, dropping more than 9% in 2001, while office visits for these lenses dropped by 14%. (In contrast, RGP-related office visits actually increased in 2000, even though the number of wearers dropped.)

Different wearing modalities. Despite the lack of growth in the number of soft contact lens wearers during 2001, most disposable lenses were dispensed more often. (Note: The figures provided below are for the types of lenses actually dispensed -- not for the use prescribed, which may have been different than what the manufacturers specified. Also, the "sales" figures given here do not include lenses obtained by patients from telephone, e-mail or Internet suppliers.)

• The number of 1-Day disposable lenses dispensed was up 15% in 2001 (compared to 63% the year before). Office visits for these lenses grew by 3%, compared to 46% in 2000.
• Sales of disposables intended to be worn 2 days to 2 weeks held nearly steady in 2001, after growing by 14% the previous year. Office visits for these lenses dropped 2.4%, compared to an 11% increase in 2000.
• Lenses intended for replacement every 15 days to 6 months (not including the recently approved 30-day "continuous wear" lenses) were up 6.5% in 2001, after 20% growth the year before. Office visits for these lenses held steady, compared to 12% growth in 2000.
• Traditional, nondisposable lenses continued their decline. Ten percent fewer were dispensed in 2001, compared with a much smaller decline of 2% in 2000. Office visits for these lenses dropped by 17%, far more than the 6% decline seen in 2000.

WHAT LIES AHEAD?

Despite the economic and political uncertainty of these times, contact lens use has been resilient. Also, this is a field in a state of rapid evolution; new materials, modalities and designs are constantly appearing. In particular, the new "continuous wear" lenses may have a major impact on the popularity of contact lenses, just as extended wear lenses did back in the '80s. Early studies indicate that most people who've tried them say they'd prefer them to having LASIK. The newly approved "corneal reshaping therapy" (CRT) lens from Paragon Vision Sciences may also have an impact as an alternative to refractive surgery.

How do M.D.s fit into this picture? It's obvious that contact lenses are not a "bread and butter" item for many ophthalmologists; witness how quickly some M.D.s stopped dispensing when the economy began to sour. But new contact lens options that may be perceived by the public as safer alternatives to refractive surgery could make dispensing contact lenses more lucrative for M.D.s -- and perhaps more necessary -- than it has been in the past.

For now, the contact lens industry as a whole is rebounding slowly. Numbers from the first quarter of 2002 show a 6.3% rise in office visits compared with the fourth quarter of 2001. Unfortunately, M.D. offices continue to stop dispensing; the number dispensing in the first quarter of 2002 was down another 7.7% from the fourth quarter of 2001.

With so many factors at work, it's hard to know what the future may hold. But the odds are good that M.D.s and contact lenses haven't seen the last of each other.