Contact Lens Rule '07 SS FIN

Supporting Statement for
Information Collection Provisions of the Contact Lens Rule
16 CFR Part 315
(OMB Control # 3084-0095)
(1) & (2)

Necessity for and Use of the Information Collected

The Fairness to Contact Lens Consumers Act (the “Act”), Pub. L. No. 108-164
(December 6, 2003), assists consumers by requiring the release and verification of contact lens
prescriptions, among other things. The Act directed the Federal Trade Commission (“FTC” or
“Commission”) to prescribe rules implementing the Act not later than 180 days after the Act took
effect on February 4, 2004.1 Accordingly, the Commission issued the final Contact Lens Rule
(“Rule”), 16 C.F.R. Part 315, on July 2, 2004. As mandated by the Act, the Rule contains
disclosure and recordkeeping keeping requirements applying to prescribers and sellers of contact
lenses. The extent to which these requirements are subject to the Paperwork Reduction Act, 44
U.S.C. Chapter 35 (“PRA”), is described below.
(a)

Disclosures

The Rule implements the Act’s requirement that contact lens prescribers provide patients
with a copy of their contact lens prescriptions upon completion of a contact lens fitting, and
provide such prescriptions to third parties authorized to act on behalf of patients. See 15 U.S.C.
§ 7601. The primary purpose of the prescription release requirement is to enable consumers to
purchase their contact lenses from the seller of their choice. Without their prescription,
consumers may be forced to purchase lenses from their prescriber. By requiring prescribers to
provide prescriptions to their patients, the Act enable consumers to compare prices and modes of
delivery among competing sellers, and ultimately purchase their lenses from the seller of their
choice.
(b)

Recordkeeping

The Rule also implements recordkeeping requirements imposed by the Act. First, the Act
sets a minimum expiration date of one year for contact lens prescriptions, with an exception
based on the medical judgment of a prescriber with respect to a patient’s ocular health. In cases
in which a prescriber sets an expiration date shorter than one year, the Rule requires the
prescriber to document in the patient’s record the medical reasons justifying the shorter date. See
15 U.S.C. § 7604(b). The Rule further requires that such records be kept for three (3) years.
Second, the Act provides that a contact lens seller may sell contact lenses only in
accordance with a prescription that the seller either (a) has received from the patient or
prescriber, or (b) has verified through communication with the prescriber. For verification, the
Act further requires contact lens sellers to maintain records of relevant communications with
prescribers. Accordingly, the Rule requires that sellers maintain records of such
1

15 U.S.C. § 7607.

communications, with the records maintained dependent on the mode of communication –
telephone, facsimile, or email. The Rule also requires sellers to retain the prescriptions they may
receive directly from the patient or prescriber. The Rule requires that sellers keep all these
records for three years and make them available for inspection by the Commission, but does not
otherwise require production of the records.
The information retained pursuant to the Rule’s recordkeeping requirements will be used
by the Commission to substantiate compliance with the Rule and may also provide a basis for the
Commission to bring an enforcement action. Without the required records, it would be difficult
either to ensure that entities are complying with the Rule’s requirements or to bring enforcement
actions based on violations of the Rule.
(3)

Consideration of the Use of Information Technology to Reduce Burden

The Rule contemplates that covered entities may use information technologies in
complying with their recordkeeping obligations under the Act. Such technologies may help
reduce the burden of information collection imposed by the Act. For example, contact lens
sellers who seek verification of prescriptions via facsimile and/or email, may use information
technologies to create and/or retain those records as required by the Rule, and thereby reduce the
time it may take to produce and maintain verification requests. In addition, nothing in the Act or
Rule prohibits regulated entities from using the least burdensome information technology to
reduce compliance burdens. Moreover, in its Notice of Rulemaking, the Commission
specifically sought comments on ways to minimize the burden of the Rule’s collections of
information through the use of information technology.
Consistent with the Government Paperwork Reduction Elimination Act., Pub L. No. 105227, Title XVII, 112 Stat. 2681-749, nothing in the Rule prescribes that the disclosures be made,
records filed or kept, or signatures executed, on paper or in any particular format that would
preclude the use of electronic methods to comply with the Rule’s requirements.
(4)

Efforts to Identify Duplication

The Rule’s disclosure and recordkeeping requirements do not duplicate any other
information collection requirements imposed by the Commission. To the extent some state laws
may already require prescription release, and/or recordkeeping similar to that required by the Act,
prescribers and sellers likely can comply with both requirements through a single release or
record-keeping system, thereby avoiding duplication.
(5)

Efforts to Minimize Burden on Small Organizations

The Rule’s disclosure and recordkeeping requirements are designed to impose the
minimum burden on all affected members of the industry, regardless of size. The Act itself does
not allow the Commission any latitude to treat small businesses differently, such as by exempting
2

a particular category of firm or setting forth a lesser standard of compliance for any category of
firm. However, the FTC staff believes that the burdens imposed by the Rule on small businesses
will be relatively low. Based on the staff’s knowledge of the eye wear industry, the small
businesses affected by the Rule primarily will consist of contact lens prescribers in solo or small
practices. Their burdens under the Rule primarily would entail providing contact lens
prescriptions to patients or their agents, documenting in exceptional cases the medical reasons for
setting a contact lens prescription date of less than one year, and verifying prescriptions for some
of their patients who seek to purchase their contact lenses from another seller.2 Thus, the
Commission staff does not believe that the Rule will impose a significant economic impact on a
substantial number of small businesses.
Nonetheless, in its Initial Regulatory Flexibility Analysis of the Rule, the Commission
specifically requested comment on whether the Rule imposes a significant impact upon a
substantial number of small entities, and what modifications to the Rule the Commission could
make to minimize the burden on small entities. In addition, the Commission requested comment
on the general question whether new technology or changes in technology can be used to reduce
the burdens mandated by the Act. Finally, on December 18, 2006, the Commission issued a
Federal Register Notice3 requesting comments on its proposal to extend through April 30, 2010
the current OMB clearance for the Rule’s information collection requirements. The Commission
received no comments.
(6)

Consequences of Conducting the Collection Less Frequently

Less frequent “collection” would violate the express statutory language of the Fairness to
Contact Lens Consumers Act, 15 U.S.C. §§ 7601 et seq. Specifically, the Act’s requirements
that prescribers release contact lens prescriptions to their patients upon completion of a contact
lens fitting, and document the medical reasons for setting a contact lens prescription expiration
date shorter than one year, do not permit less frequent disclosure. See 15 U.S.C. §§ 7601, 7604.
Similarly, the Act’s requirement that contact lens sellers retain records of all direct
communications involved in obtaining prescription verification does not permit less frequent
collection of information. See 15 U.S.C. § 7603(b).
The Commission’s Rule requires that sellers retain the required records for a period of
three (3) years. The FTC staff believes that a record retention period that is shorter than three
years would hamper the Commission’s ability to verify contact lens prescribers’ and sellers’
compliance with the Rule, because the statute of limitations applicable to Commission rule
violations is three years. See Section 19(d) of the FTC Act, 15 U.S.C. 57b(d).

2

The more significant recordkeeping burdens imposed by the Act are likely to fall primarily on nonprescriber contact lens sellers which the FTC staff believes are larger companies for the most part.
3

71 Fed. Reg. 75,754 (Dec. 18, 2006).

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(7)

Circumstances Requiring Collection Inconsistent With Guidelines

The collection of information in the Rule is consistent with all applicable guidelines
contained in 5 C.F.R. § 1320.5(d)(2).
(8)

Public Comments/Consultation Outside the Agency

On December 18, 2006, the FTC sought public comments on its proposal to extend its
current OMB clearance for the Rule’s information collection requirements. No comments were
received..
(9)

Payments and Gifts to Respondents
Not applicable.

(10)

Assurances of Confidentiality

Not applicable. No assurance of confidentiality is necessary because although the
proposed Contact Lens Rule requires regulated entities to disclose and/or maintain records, it
does not require the submission of any such records with the agency. Thus, to the extent, if any,
that the agency may require production of such records for law enforcement purposes in specific
proceedings, such production would not constitute an information collection activity within the
meaning of the Paperwork Reduction Act. In any event, in such proceedings, records would be
protected by law from mandatory public disclosure. See, e.g., section 21 of the FTC Act, 15
U.S.C. 57b-2; Exemption 6 of the Freedom of Information Act, 5 U.S.C. 552(b)(6).
(11)

Matters of a Sensitive Nature

Not applicable. The proposed Contact Lens Rule does not require the disclosure or
production of sensitive or confidential information to the Commission. To the extent that
confidential information covered by a recordkeeping requirement is collected by the Commission
for law enforcement purposes, the confidentiality provisions of Section 21 of the FTC Act, 15
U.S.C. 57b-2 will apply.
12)

Estimated Annual Hours and Labor Cost Burden
Estimated total annual hours burden: 950,000 hours (rounded to the nearest thousand)

In its 2003 PRA-related Federal Register Notice and corresponding submission to OMB,
FTC staff estimated that the annual paperwork burden for the various disclosure and
recordkeeping requirements under the FCLCA and then-proposed Rule would be approximately
600,000 disclosure hours for contact lens prescribers and approximately 300,000 recordkeeping
hours for contact lens sellers, a combined industry total of 900,000 hours.
4

No provisions in the Rule have been amended since staff's prior submission to OMB.
The Rules disclosure and recordkeeping requirements, therefore, remain the same. However, the
number of contact lens wearers in the United States has increased to approximately 38 million.4
Therefore, assuming an annual contact lens exam for each contact lens wearer, 38 million people
would receive a copy of their prescription each year under the Rule. At an estimated one minute
per prescription, the annual time spent by prescribers complying with the disclosure requirement
would be a maximum of 633,333 hours. [(38 million x 1 minute)/60 minutes = 633,333 hours]
As required by the FCLCA, the Rule also imposes two recordkeeping requirements.
First, prescribers must document the specific medical reasons for setting a contact lens
prescription expiration date shorter than the one year minimum established by the FCLCA. This
burden is likely to be nil because the requirement applies only in cases when the prescriber
invokes the medical judgment exception, which is expected to occur infrequently, and prescribers
are likely to record this information in the ordinary course of business as part of their patients'
medical records. The OMB regulation that implements the PRA defines “burden” to exclude any
effort that would be expended regardless of a regulatory requirement. 5 CFR 1320.3(B)(3)(2).
Second, the Rule requires contact lens sellers to maintain certain documents relating to
contact lens sales. As noted above, a seller may sell contact lenses only in accordance with a
prescription that the seller either (a) has received from the patient or prescriber, or (b) has
verified through direct communication with the prescriber. The FCLCA requires sellers to retain
prescriptions and records of communications with prescribers relating to prescription verification
for three years.
Staff believes that the burden of complying with this requirement is low. Sellers who
seek verification of contact lens prescriptions must retain one or two records for each contact lens
sale: either the relevant prescription itself, or the verification request and any response from the
prescriber. Staff estimates that such recordkeeping will entail a maximum of five minutes per
sale, including time spent preparing a file and actually filing the record(s).
Staff also believes that, based on its knowledge of the industry, this burden will fall
primarily on mail order and Internet-based sellers of contact lenses, as they are the entities in the
industry most reliant on obtaining or verifying contact lens prescriptions. Based on
conversations with the industry, staff estimates that these entities currently account for
approximately 10% of sales in the contact lens market5 and, by extension, that approximately 3.8
4

See Statistics on Eyeglasses and Contact Lenses, All About Vision, August, 2006, available at
http://www.allaboutvision.com/resources/statistics-eyewear.htm. See also Barr, J. “2004 Annual Report,”
Contact Lens Spectrum, Jan. 2005, available at http://www.clspectrum.com/article.aspx?article=12733.
5

The FTC's February 2005 study, “The Strength of Competition in the Rx Sale of Contact Lenses: An
FTC Study,” cites various data that, averaged together, suggests that approximately 10% of contact lens sales
are by online and mail-order sellers. The report is available online at
http://www.ftc.gov/reports/contactlens/050214contactlensrpt.pdf.

5

million consumers – 10% of the 38 million contact lens wearers in the United States – purchase
their lenses from them.
At an estimated five minutes per sale to each of 3.8 million consumers, contact lens
sellers will spend a total of 316,667 burden hours complying with the recordkeeping requirement.
[(3.8 million x 5 minutes)/60 minutes = 316,667 hours] This estimate likely overstates the actual
burden, however, because it includes the time spent by sellers who already keep records
pertaining to contact lens sales in the ordinary course of business. In addition, the estimate may
overstate the time spent by sellers to the extent that records (e.g., verification requests) are
generated and stored automatically and electronically, which staff understands is the case for
some larger online sellers.
Estimated total labor cost burden: $32.8 million
Commission staff derived labor costs by applying appropriate hourly cost figures to the
burden hours described above. Staff estimates, based on its knowledge of the industry, that
optometrists account for approximately 75% of prescribers. Consequently, for simplicity, staff
will focus on their average hourly wage in estimating prescribers’ labor cost burden.
According to Bureau of Labor Statistics from May 2005, salaried optometrists earn an
average wage of $45.91 per hour and clerical personnel earn an average of $11.82 per hour.6
With these categories of personnel, respectively, likely to perform the brunt of the disclosure and
recordkeeping aspects of the Rule, estimated total labor cost attributable to the Rule would be
approximately $32.8 million. [($45.91 x 633,333 hours) + ($11.82 x 316,667 hours) =
$32,819,322]
The contact lens market is a multi-billion dollar market; one recent survey estimates that
contact lens sales totaled $2.37 billion from Jan 1, 2006 to Dec 31, 2006.7 Thus, the total labor
cost burden estimate of $32.8 million represents approximately 1% of the overall market.

6

Optometrist hourly wages are drawn from the Bureau of Labor Statistics (BLS) Occupational
Employment and Statistics Survey, May 2005, based on BLS-sampled data it collected over a 3-year period.
See http://www.bls.gov/news.release/pdf/ocwage.pdf (Table 1). Relevant clerical hourly rates are unavailable
from that survey, however, and are drawn instead from the BLS National Compensation Survey, June 2005
(with 2005 as the most recent whole year information available, and June the focal median point). See
http://www.bls.gov/ncs/ocs/sp/ncbl0832.pdf (Table 1.1).
7

The Vision Council of America and Jobson Optical Research have conducted large scale
continuous consumer research under the name VisionWatch, which reports on vision care industry. The basis
for this statistic is on file with the Federal Trade Commission.

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(13)

Capital and Other Non-labor Costs
Estimated annual non-labor cost burden: 0 or minimal.

Staff believes that the Rule’s disclosure and recordkeeping requirements impose
negligible capital or other non-labor costs, as the affected entities are likely to have the necessary
supplies and/or equipment already (e.g., prescription pads, patients’ medical charts, facsimile
machines and paper, telephones, and recordkeeping facilities such as filing cabinets or other
storage).
(14)

Estimated Cost to the Federal Government

Staff estimates that the fiscal year cost to the FTC Bureau of Consumer Protection of
enforcing the Rule’s requirements will be approximately $80,000 per year. This estimate is
based on the assumption that 80% of one full attorney work year will be expended to enforce the
Rule’s requirements relating to disclosure and recordkeeping. Clerical and other support services
are also included in this estimate.
(15)

Program Changes or Adjustments

There are no program changes posed by the final Rule. Increased estimates for burden
hours and labor costs from the FTC’s prior clearance request are due to an increased number of
contact lens wearers in the U.S. (previously estimated at 36 million, now 38 million) and,
additionally regarding labor costs, an increase in estimated hourly wage rates.
(16)

Statistical Use of Information/Publication of results

Not applicable. There are no plans to publish for statistical use any information required
by the Rule.
(17)

Display of the Expiration Date for OMB Approval
Not applicable.

(18)

Exceptions to the “Certification for Paperwork Reduction Act Submissions”
Not applicable.

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