Friday, April 29, 2016

Contact crony capitalism

Rent seeking and regulatory capture are common forms of commercial and political sclerosis, cronyism and corruption. de Rigby describes one such example which, as a contact wearer, has long stuck in my craw.

From Congress and Crony Capitalists Want to Take Over the Contact Lens Market: Special interests collude with government to hurt consumers. by Veronique de Rugy.

This corruption is a debasement of the democratic process and undermines citizen trust in government. Government has important functions to fulfill but what happens when, through this kind of corruption, it is no longer trusted to do so. Left and Right ought to both be able to agree on this but instead both collude to fleece the private citizen.
The intensity with which some American companies try to use the government to trick or deceive consumers is astonishing. Yet the extent to which lawmakers seem content to cater to these crony pursuits never disappoints, either. Case in point: the current attempt to protect contact lens sellers from competition at the expense of consumers.

An estimated 40 million Americans wear contact lenses. That's a $4 billion industry. Thanks to the heavy-handed government regulation of all things health care, contacts already cost more than they should. However, if an ongoing effort to reduce competition through government cronyism were to succeed, costs might soon rise even more.

What makes the contact lens market unique—and also leaves it extra vulnerable to crony intervention—is the fact that customers are required by federal law to obtain a prescription from a licensed optometrist in order to purchase lenses. It is a rare instance where prescribers are also sellers, which leads to a cozy relationship between manufacturers and the doctors who can steer patients toward their brand.

Prescriptions are brand-specific. This makes it difficult for consumers to shop around. Choosing a different brand would require paying for another exam in order to obtain a new prescription.

The simplest solution would be to do away with the gatekeepers altogether and allow the purchase of contact lenses without a prescription. It works just fine that way in Europe and Japan, but manufacturers and doctors nevertheless protect their legal mandate through lobbying by citing health concerns, even as the same manufacturers happily sell to overseas markets without the same requirements.
It is even worse than de Rigby indicates. She's discussing federal law. Many states require that a consumer have a new eye examine at least every two years before they can reorder their contacts. This is simply a make-work program by legislators for donation-rich opticians. Sure, the individual should periodically get their eye's checked, particularly, after a certain age, for glaucoma and the like. But enforcing that recommendation by holding hostage prescription refills is simply government coercively transferring money from consumers to opticians via the inducement of political donations. Disgusting.

My prescription for contacts has not changed in some fifteen or twenty years. But every two years, I have to make three or four hours available to go and get my eyes checked anyway, simply in order to get my prescription refilled.

If the government is so clearly on the side of the deep pockets and against the citizenry, why would we trust them to make good decisions on really important issues. Contact lenses are just a reminder that we shouldn't.

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