Contact Lens Rule - Supporting Statement - 2010_mtd

Supporting Statement for
Information Collection Provisions of the Contact Lens Rule
16 CFR Part 315
(OMB Control # 3084-0127)

(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 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,2 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.

2

69 FR 5440 (Feb. 4, 2004).

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(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 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.3 The Rule
permits some limitation on prescription release and verification. For example, the Commission
has indicated that the Rule does not require prescribers to provide additional copies of
prescriptions to patients after the initial release upon completion of a contact lens fitting,
although the Rule does not prohibit this practice either.

(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).

(7)

Circumstances Requiring Collection Inconsistent With Guidelines
The collection of information in the Rule is consistent with all applicable guidelines

3

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.

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contained in 5 C.F.R. § 1320.5(d)(2).

(8)

Public Comments/Consultation Outside the Agency

On December 24, 2009, the FTC sought public comments on its proposal to extend its
current OMB clearance for the Rule’s information collection requirements. 74 Fed. Reg. 68427.
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
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 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: 850,000 hours (rounded to the nearest
thousand).
Based upon staff knowledge of the industry, this figure is derived by adding
approximately 567,000 disclosure hours for contact lens prescribers to approximately 283,000
recordkeeping hours for contact lens sellers, for a combined industry total of 850,000 hours.
This is slightly lower than the estimates previously submitted to OMB (the similar figure was
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950,000 hours in 2006); and is due to a drop in the estimated number of contact lens wearers
from 36 million (2006) to 34 million (2008).
No provisions in the Rule have been amended since staff’s prior submission to OMB.
The Rule’s disclosure and recordkeeping requirements, therefore, remain the same. As noted
above, the number of contact lens wearers in the United States is estimated to be approximately
34 million.4 Therefore, assuming an annual contact lens exam for each contact lens wearer, 34
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 567,000 hours. [(34 million × 1 minute)/60
minutes = 566,667 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 C.F.R.
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

4

See Contact Lenses, Frequently Asked Questions, November, 2009, available at (http://
www.allaboutvision.com/faq/contactlens.htm.). See also Nichols, J. “Annual Report: Contact
Lenses 2008,” Contact Lens Spectrum, Jan. 2009, available at (http://www.clspectrum.com/
article.aspx?article=102473).
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approximately 10 % of sales in the contact lens market5 and, by extension, that approximately
3.4 million consumers—10 % of the 34 million contact lens wearers in the United
States—purchase their lenses from them.
At an estimated five minutes per sale to each of 3.4 million consumers, contact lens
sellers will spend a total of 283,300 burden hours complying with the recordkeeping
requirement. [(3.4 million × 5 minutes)/60 minutes = 283,333.3 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: $32,317,000 (rounded to the nearest thousand).
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 2008, salaried optometrists earn an
average wage of $50.58 per hour and general office clerical personnel earn an average of
$12.90 per hour.6 With these categories of personnel, respectively, likely to perform the brunt
of the disclosure (for optometrists) and recordkeeping (for office clerks) aspects of the Rule,
estimated total labor cost attributable to the Rule would be approximately $32.8 million.
[($50.58 × 566,666.7 hours) + ($12.90 × 283,333.3 hours) = $32,317,001]
The contact lens market is a multibillion 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 $32.3 million represents approximately 1.5 % of the overall market.

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).
6

Mean and median worker hourly wages for optometrists and general office clerks are
drawn from the Bureau of Labor Statistics (BLS) Occupational Employment and Statistics
Survey, May 2008, based on BLS-sampled data it collected over a 3-year period. See
(http://www.bls.gov/news.release/pdf/ocwage.pdf) (Table 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 the 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.

(14)

Estimated Cost to the Federal Government

Staff estimates that the fiscal year cost to the FTC of enforcing the Rule's requirements
will be approximately $35,000 per year. This estimate is based on the assumption that 10-15%
of one full Attorney work year, 2.5% of one Economist work year, and 10% of one Investigator
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. The decreased estimates for
burden hours and labor costs from the FTC’s prior clearance request are due to a decreased
number of contact lens wearers in the U.S. (previously estimated at 36 million, now 34 million).

(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)

Requested Permission Not to Display the Expiration Date for OMB Approval

This is not applicable, since the Commission will display the expiration date of the
clearance.

(18)

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

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