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A court-approved settlement of a consumer class action settlement against Bausch & Lomb was announced on August 1, 1996.

Final approval of the proposed settlement is scheduled for hearing on Nov. 26 in Birmingham, Alabama to determine if it is fair to consumers. The fairness hearing will be two years after the court certified a national RICO class on behalf of all purchasers of Bausch & Lomb’s Optima and Medalist contact lenses in November, 1994.

Under the settlement Bausch & Lomb will pay up to $68 million in cash and products to 1.5 million buyers of the company’s disposable lenses. Many wearers will receive from $25 to $50 in cash and $25 to $50 in coupons under the settlement as a result of a class-action filed in May 1994 which alleged that the company sold the same product under different brand names at widely varying prices and engaged in a fraudulent marketing scheme in order to gain market share in the disposal lens market. The result was that some consumers paid much more because they believed they were getting different lenses.

Bausch & Lomb denies any wrongdoing in its re-labeling program but agreed to pay up to $34 million in cash payments to consumers and in addition provide the same amount in free products, including contact lenses, sunglasses and skin-care items.

Competition from Johnson & Johnson led Bausch & Lomb to relabel its lenses to compete with Accuview disposable lenses which have long held a premier share of the contact lens market. At the time, Bausch & Lomb was selling a long wear lens under the name of Optima, which wholesaled to optometrists for approximately $25. In order to enter the disposable market Bausch & Lomb simply repackaged its Optima lens and renamed it the Medalist for intermediate wear and as the Sequence for disposable use.

These new and identical products were represented to be different, but the only true difference was the name on the package and the price charged.

Bausch & Lomb obtained FDA approval for its package statements, and urged optometrists not to prescribe in a manner other than advised by the manufacturer on the package, although FDA approval for packaging only confirms that a given description is accurate. At no time did the FDA compare all Bausch & Lomb soft contact lenses to determine whether or not there was any difference in the products.

At the same time that optometrists were warned to only dispense the products as Bausch & Lomb ordered, the company began an aggressive marketing program with optometrists urging them to increase the number of returning patients and profits via the sale of its disposable lenses.

Bausch & Lomb sold to optometrists and opticians its SeeQuence 2 lens which were renamed as Medalist, Optima FW and Criterion Ultra FW. The lenses were resold at $4 to $25 a lens. The price was not based on quality but how often the lenses were to be replaced and constituted a scheme to allow Bausch & Lomb to compete against over manufacturers, while maintaining cashflow.

Under the settlement, anyone who bought a Medalist, Optima or Criterion lens from 1990 through April 1996 would be eligible for refunds ranging from $2.68 in cash and coupons worth $10.66 per lens.

The deadline for making a application for a refund under the claims process is February 1, 1997.

Alexander Law Group, LLP, LLP serves on the National Plaintiffs’ Management Committee prosecuting Roberts v. Bausch & Lomb, Inc.,U.S. District Court, Northern District of Alabama, Western Division, No. CV-94-C-1144-W. See Wall Street Journal, November 2, 1994 and August 2, 1996 [B-2].