The buzz acronym these days is UPP. With the Unilateral Pricing Policy, businesses must charge a minimum price for a product. This UPP was introduced for the newest and most innovative brands of contact lens, so eye care professionals could take the time to educate, fit, and prescribe these breakthrough lenses for their patients without having to worry that their patients would be able to purchase them for less at a discount retail store. Now it seems all contact lens vendors are positioning themselves to benefit from UPP minimum prices.
As the CEO of your optometry business, it’s important to periodically check the profit margins of your optical product, and adjust price at least one time per year. If you have not recently taken the time to analyze your contact lens cost and retail pricing, now is the time.
What is best for your patients must come first, but when your options are of equal quality, choosing your contacts should also be a good business decision.
Steps to analyze your first choices in contact lenses:
- Decide first what is in the best interest of patient (i.e. – modality and materials)
- Know which companies provide the widest parameters for meeting most patient needs.
- Analyze each of the costs per box.
- Create a Google spreadsheet as below. (See which contact lenses are the most competitively priced against your costs)
- Fill in your costs per annual supply and costs posted per online sales company (to compare pricing
- Create another box to compare net dollars per annual supply as below. (Our cost is annual supply, retail cost for annual supply)
Use spreadsheet “Data” drop down to sort the difference to find out your most profitable and least profitable lenses.
As the doctor you always have the discretion to choose the contact lenses which are best for your patients. First, communicate with them to determine their wants and needs. When those questions are answered, formulate a decision that is best for your patients and best for the practice. All successful practices know that doing what is in the best interest of the patients will keep the business growing and thriving. Those same successful practices are savvy in choosing products that ensure the practice’s survival in the increasingly competitive marketplace.
So what should a CEO know about contact lenses and UPP? UPP is most likely not as important as you think when you do the math.
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