In 2013, contact lens manufacturer Alcon (CIBA Vision) took action to end a pricing war that was pricing optometrists out of their own market. It enacted a minimum pricing policy called unilateral pricing policy (UPP), which is common among companies such as Apple and Bose. High end products such as these cannot be sold under a certain price, allowing these companies to preserve brand value. By setting minimum prices for its contact lenses, Alcon reset the bar for manufacturers to compete on value and service rather than solely on price. Since then, Bausch & Lomb, CooperVision and Vistakon have followed suit.
In the past, discount and bulk merchandisers were able to cut the cost of premium contact lenses by selling a higher quantity at discounted rates, which allowed them to out price many small business and private practice optometrists. However, after the enactment of UPP, manufacturers can cut off companies who sell UPP protected products for less than the minimum retail price. In addition to UPP, many manufacturers are eliminating rebates and building the savings into their base prices.
In my opinion, UPP is a huge leap forward for the profession because it restores the conversation in the exam room to eye health and product performance rather than price. What do you think about UPP? How will it impact you and your patients? Who will be the next company to adopt UPP?