Md. settles price-fixing lawsuit against Johnson & Johnson

Maryland has settled a price-fixing lawsuit against Johnson & Johnson Vision Care Inc. that alleged the company made a deal with retailers in 2014 to fix the price of its contact lenses, the attorney general’s office announced Thursday.

No retailer was allowed under the arrangement to sell Johnson & Johnson contact lenses, like Acuvue, below an agreed-upon minimum price, a violation of the state’s antitrust law.

As part of the settlement, Johnson & Johnson said it has stopped all such agreements and will pay a $50,000 civil penalty. The company denies any and all wrongdoing.

Johnson & Johnson is the largest manufacturer of contact lenses in the country and makes 40 percent of the contact lenses sold in Maryland.

The company negotiated its price policy in the first place because certain eye care professionals who prescribe and sell contact lenses to patients complained that wholesalers like Costco, Sam’s Club and BJ’s Wholesale Club were selling contact lenses at low prices that the eye care professionals could not match, according to the attorney general’s lawsuit. The mandatory minimum price policy forced discount stores to raise their prices. As a result, customers had to pay more and were deprived of the benefits of price competition among merchants, the lawsuit alleged.

In 2009, Attorney General Brian E. Frosh, then a state senator, sponsored an amendment to the Maryland Antitrust Act prohibiting any agreement setting a minimum price for retailers. The lawsuit against Johnson & Johnson is the first case that the attorney general has brought under the amended Antitrust Act, the attorney general’s office said.

“Prior to 2009, minimum retail price agreements such as the one we alleged in our suit, could be found lawful by courts,” Frosh said in a statement.  “Now there’s no question – an agreement to fix a minimum retail price is illegal under Maryland law.  I am pleased that we are able to use the law to give consumers the choice to shop among competing merchants for the best prices.”