2010-8647. Agency Information Collection Activities; Submission for OMB Review; Comment Request

AGENCY:

Federal Trade Commission (“FTC” or “Commission”).

ACTION:

Notice and request for comment.

SUMMARY:

The information collection requirements described below will be submitted to the Office of Management and Budget (“OMB”) for review, as required by the Paperwork Reduction Act (“PRA”). The FTC is seeking public comments on its proposal to extend through May 31, 2013, the current PRA clearance for information collection requirements contained in its Contact Lens Rule. That clearance expires on May 31, 2010.

DATES:

Comments must be received on or before May 17, 2010.

ADDRESSES:

Interested parties are invited to submit written comments electronically or in paper form, by following the instructions in the Request for Comments part of the SUPPLEMENTARY INFORMATION section below. Comments in electronic form should be submitted by using the following Web link: (https://public.commentworks.com/​ftc/​contactlensrulepra2) (and following the instructions on the web-based form). Comments in paper form should be mailed or delivered to the following address: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex J), 600 Pennsylvania Avenue, NW, Washington, DC 20580, in the manner detailed in the SUPPLEMENTARY INFORMATION below.

FOR FURTHER INFORMATION CONTACT:

Requests for copies of the collection of information and supporting documentation should be addressed to Karen Jagielski, Attorney, Division of Advertising Practices, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW., NJ- 3212, Washington, DC 20580, [phone].

SUPPLEMENTARY INFORMATION:

Background

Under the PRA, 44 U.S.C. 3501-3520, federal agencies must obtain approval from OMB for each collection of information they conduct or sponsor. “Collection of information” means agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. 44 U.S.C. 3502(3); 5 CFR 1320.3(c).

On December 24, 2009, the FTC sought comment on the information collection requirements associated with the Contact Lens Rule (the Rule), 16 CFR part 315. No comments were received. Pursuant to the OMB regulations, 5 CFR Part 1320, that implement the PRA, the FTC is providing this second opportunity for public comment while seeking OMB approval to renew the pre-existing clearance for the Rule (OMB Control No. 3084-0095). All comments should be filed as prescribed in the ADDRESSES section above and in the Request for Comments (found below), and must be received on or before May 17, 2010.

The Rule was promulgated by the FTC pursuant to the Fairness to Contact Lens Consumers Act (“FCLCA”), Pub. L. 108-164 (December 6, 2003), which was enacted to enable consumers to purchase contact lenses from the seller of their choice. The Rule became effective on August 2, 2004. As mandated by the FCLCA, the Rule requires the release and verification of contact lens prescriptions and contains recordkeeping requirements applying to both prescribers and sellers of contact lenses.

Specifically, the Rule requires that prescribers provide a copy of the prescription to the consumer upon the completion of a contact lens fitting and verify or provide prescriptions to authorized third parties. The Rule also mandates 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 direct communication with the prescriber. In addition, the Rule imposes recordkeeping requirements on contact lens prescribers and sellers. For example, the Rule requires prescribers to document in their patients’ records the medical reasons for setting a contact lens prescription expiration date of less than one year. The Rule requires contact lens sellers to maintain records for three years of all direct communications involved in obtaining verification of a contact lens prescription, as well as prescriptions, or copies thereof, which they receive directly from customers or prescribers.

The information retained under the Rule’s recordkeeping requirements is 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.

Request for Comments

Interested parties are invited to submit written comments electronically or in paper form. Comments should refer to “Contact Lens Rule: FTC File No. P054510” to facilitate the organization of comments. Please note that your comment — including your name and your state — will be placed on the public record of this proceeding, including on the publicly accessible FTC Web site, at (http://www.ftc.gov/​os/​publiccomments.shtm).

Because comments will be made public, they should not include any sensitive personal information, such as an individual’s Social Security Number; date of birth; driver’s license number or other state identification number, or foreign country equivalent; passport number; financial account number; or credit or debit card number. Comments also should not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, comments should not include any “[t]rade secret or any commercial or financial information which is obtained from any person and which is privileged or confidential. . .,” as provided in Section 6(f) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. 46(f), and Commission Rule 4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule 4.9(c).

Because paper mail addressed to the FTC is subject to delay due to heightened security screening, please consider submitting your comments in electronic form. Comments filed in electronic form should be submitted by using the following Web link: (https://public.commentworks.com/​ftc/​contactlensrulepra2) (and following the instructions on the web-based form). If this Notice appears at (http://www.regulations.gov), you may also file an electronic comment through that Web site. The Commission will consider all comments that regulations.gov forwards to it.

A comment filed in paper form should include the “Contact Lens Rule: FTC File No. P054510” reference both in the text and on the envelope, and should be mailed or delivered to the following address: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex J), 600 Pennsylvania Avenue, NW, Washington, DC 20580. The FTC is requesting that any comment filed in paper form be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

Comments on any proposed recordkeeping, or disclosure requirements that are subject to Paperwork Reduction Act review by the Office of Management and Budget should additionally be submitted to: Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Federal Trade Commission. Comments should be submitted via facsimile to [phone] because U.S. postal mail at the OMB is subject to delays due to heightened security precautions.

The FTC Act and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives, whether filed in paper or electronic form. Comments received will be available to the public on the FTC’s Web site, to the extent practicable, at (http://www.ftc.gov/​os/​publiccomments.shtm). As a matter of discretion, the Commission makes every effort to remove home contact information for individuals from the public comments it receives before placing those comments on the FTC’s Web site. More information, including routine uses permitted by the Privacy Act, may be found in the FTC’s privacy policy at (http://www.ftc.gov/​ftc/​privacy.shtm).

Burden Statement

Commission staff estimates the paperwork burden of the FCLCA and Rule based on its knowledge of the eye care industry. Staff believes there will be some burden on individual prescribers to provide contact lens prescriptions, although it involves merely writing a few items of information onto a slip of paper and handing it to the patient, or perhaps mailing or faxing it to a third party. In addition, there will be some recordkeeping burden on contact lens sellers—including retaining prescriptions or records of “direct communications”—pertaining to each sale of contact lenses to consumers who received their original prescription from a third party prescriber.

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 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.¹ 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 CFR 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 approximately 10% of sales in the contact lens market² 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 labor costs: $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.³

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) = $32,317,000]

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, 2006.⁴ Thus, the total labor cost burden estimate of $32.3 million represents approximately 1.5% of the overall market.

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 such as filing cabinets or other storage).

Willard Tom,

General Counsel.

Footnotes

1.  See Contact Lenses, Frequently Asked Questions, Nov. 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).

2.  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).

3.  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).

4.  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.