The first anniversary is always special. Janus-like, it offers the opportunity to simultaneously reflect on hitting a milestone and projecting the future. The first anniversary can also prompt a taking of stock: how well did the first year go?
Recently, the over-the-counter (OTC) hearing aid rule, which went into effect on October 17, 2022, celebrated its first anniversary. The rule established a new category of OTC hearing aids for individuals with mild to moderate hearing loss, allowing them to purchase hearing aids directly from stores or online retailers without the need for a medical examination, prescription, or fitting adjustment by an audiologist.
When FDA released the final rule, it outlined its ambitious goals. The Agency stated that the rule was “designed to assure the safety and effectiveness of OTC hearing aids, while fostering innovation and competition in the hearing aid technology marketplace.” The rule also aimed to provide “consumers with perceived mild to moderate hearing loss with improved access to devices that meet their needs and are less expensive than current options.” There was widespread agreement among stakeholders that utilization of hearing aids by people with hearing loss was far too low, although there was substantial disagreement as to causes for the underutilization. Proponents of OTC hearing aids had long claimed that these products would sharply reduce price, expand options, reduce barriers to purchase, and thereby increase usage. One year later the question begging to be answered is: have these goals been met?
For those who are unfamiliar with the rule, let us briefly explore its history across three different administrations (see our previous blogs: here, here, and here). The journey began in October 2015 when the President’s Council of Advisors on Science and Technology (PCAST) during the Obama Administration recommended the creation of a class of hearing aids for OTC sale. Following this, in June 2016, the National Academies of Sciences, Engineering, and Medicine (NASEM) made a similar recommendation of creating a new category of OTC “wearable hearing devices.” Under the Trump Administration, Congress directed FDA to establish a new category of OTC hearing aids in the FDA Reauthorization Act and publish proposed OTC hearing aid rules by August 2020. However, FDA missed that deadline. Almost a year later, in July 2021 President Biden issued an Executive Order mandating publication. FDA issued a proposed rule in 2021 and the final rule in August 2022, culminating a seven-year effort involving three Administrations, Congress, FDA, and various stakeholders. That rule went into effect on October 17, 2022, leading us to this blog post about the one-year anniversary.
In some measurable ways, the rule has been a success. Access has expanded. Over the past year, many retailers—including some very large ones—started offering OTC hearing aids in their stores or on their websites, and some are available at audiology clinics. And the number of companies selling OTC hearing aids is impressive: as of this blog post, 54 companies list OTC hearing aids with FDA under the product code QUF while 18 companies list OTC self-fitting hearing aids under the product code QUH. However, estimating the number of entirely new OTC hearing aids spurred by the rule over the past year is not straightforward given that many of these OTC devices were previously accessible as “direct-to-consumer” (DTC) devices without FDA oversight. Nevertheless, the presence of over 70 companies currently listing OTC hearing aids with FDA signifies a positive trajectory for further improving accessibility, at least for this first year.
By one measure, affordability has improved. There are now more cheap OTC hearing aids available. Price has been seen as a barrier for some consumers. (By law, Medicare is barred from paying for hearing aids.) As expressed in the NASEM report, and the price of hearing aids has often been cited as a deterrent to their purchase. At the 67th International EUHA Congress in October in Nuremberg, Germany, Hearing Industries Association (HIA) reported a wide price range for OTC hearing aids, spanning from $89.97 to $5,500.00. Such a wide price range has allowed for more customers to dive into the market, but the technological differences between lower and higher cost products are often confusing, leading to questions about the distinction between the higher and lower end devices—and even more questions about whether the higher priced devices are worth the premium or whether the low cost products really work. And the lack of third party coverage is still a problem such that OTC hearing aids—at least for higher priced versions—may still be unaffordable for many potential customers.
As far as we know, there are no definitive data on the volume of OTC sales. According to HIA, OTC hearing aid sales are estimated from 100,000 to one million units. It is unknown how many of these sales are ones that would not have occurred but for the existence of OTC products. Reportedly, buyers of OTC hearing aids tend to be younger and seek a simple process without appointments or prescriptions. Notably, some hearing aid companies have partnered with consumer brands (e.g., GN and Jabra, Nuheara and HP, WSAudiology and Sony, Sonova and Sennheiser), and, because these consumers frequently prefer purchasing from recognized brands, these brands apparently have had some traction.
Nevertheless, it’s not quite clear how well these OTC hearing aids are working. Anecdotal data suggests that some OTC devices sufficiently meet the hearing aid fitting algorithm targets—called the NAL-N2 targets—which aim to make speech intelligible and overall loudness comfortable; some, however, reportedly do not. The New York Times recently pointed out a considerable range of quality among OTC hearing aids that are currently on the market. This poses a problem because if bad quality products fail to satisfy the user, the user might assume that OTC devices do not work and give up entirely, rather than trying another device or hearing care program. (Data have shown that once dissatisfied consumers stow away their hearing aids, it can take years before they try buying a new set.) This is reflected by return rates: One publicly traded company reports a sales return rate of 34 to 36% and notes that unsatisfactory fit and insufficient audio amplification are the most commonly cited reasons for product returns. Further public information reveals sales with returns of more than 30% for OTC devices. According to HIA, OTC buyers receiving some assistance from a hearing care professional or from customer service representations may have higher rates of satisfaction and lower returns to the company than those buyers who receive no assistance at all, suggesting that a hybrid OTC model is working for some customers. This is not entirely a surprise, since people who were skeptical of the pure OTC model said that, unlike with eyeglasses, use of hearing aids was a process that required some professional help.
One of the ostensible advantages of the implementation of OTC hearing aid rules is FDA oversight. “DTC” hearing aids had become notorious for exaggerated claims and misleading statements. Even with the advent of OTC hearing aids and FDA oversight, however, there are still concerns about bad actors making unsubstantiated claims, engaging in misleading advertising, and failing to conform to FDA regulations. Examples of misleading advertising include claims of “Restore Your Natural Hearing” or recommending an OTC hearing aid for those who “Suffer from mild to severe hearing loss.” Given that OTC hearing aids are only for mild or moderate hearing loss and cannot “restore” natural hearing, this kind of claim is plainly impermissible. And then there is a personal favorite: using “CIA technology” for invisible hearing aids. Most of the time, these bad actors are not registered with FDA.
Previously, we emphasized that the success of OTC hearing aids is contingent on robust FDA enforcement, but despite this abundance of improper claims, FDA has yet to take public enforcement action to address bad actors within the hearing aid industry. To its credit, FDA did post notices on its website including information about OTC hearing aids for both companies and consumers, but it is doubtful that these kinds of statements on an FDA website will have much effect on bad actors. This absence of public enforcement, such as warning letters, may only serve to embolden these companies. Strengthened enforcement is crucial to protect the public health and facilitate the success of OTC hearing aids. Bogus claims for OTC hearing aids will hurt consumers and may lead to public skepticism that OTC hearing aids are useful products.
The one-year anniversary is a good point for reflection, but it is also early to assess the ultimate success of OTC hearing aids. Yet the milestone should not pass without recognition, and it provides a great opportunity for objective evaluation. It seems that results thus far have been mixed: we may have made some progress, but there’s still a ways to go. It does seem likely that without FDA intervention, bad claims will proliferate, devaluing the entire OTC hearing aid market.
There is one other point worth making. Proponents of OTC hearing aids had long predicted that the adoption of the model would almost instantly lead to a blossoming of high-quality, low-cost hearing aids and a dramatic uptick in utilization. It seemed simple: allowing consumers to by-pass costly hearing professionals would save money, make sales more “frictionless,” and lead to much greater product use. While the advent of OTC hearing aids has had an impact, those lofty goals have not been met, at least yet. As FDA embarks upon much more far-reaching and consequential rulemaking, such as the complete overhaul of regulation of laboratory developed tests, it is important to keep in mind that marketplaces are complex and messy, and the Law of Unintended Consequences should never be ignored.