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Hear, hear to the Biden Food and Drug Administration, which on Tuesday finalized a rule that Commissioner
Robert Califf
said will open up the hearing-aid market to competition and “unleash the power of American industry.” This is the right way to reduce prices.
The FDA rule will let Americans buy hearing aids over the counter rather than by prescription. This will expand the hearing-aid market and could save seniors thousands of dollars. The four largest manufacturers control 84% of a relatively small market. In 2019 the average retail price of a hearing aid was $2,284, about three times more than the wholesale cost.
Blame these huge markups on the cartel of licensed specialists who typically contract with two or three hearing-aid manufacturers and bundle the cost of the device with other fees and services. Many Americans can’t afford to pay thousands of dollars for devices, which aren’t covered by Medicare or most private insurance.
The result is that some 40 million Americans with hearing loss don’t use hearings aids. Some use less expensive personal sound amplification products, but these aren’t as effective or personally adjustable. Untreated hearing loss can reduce seniors’ quality of life and is estimated by the Lancet Commission on Dementia to be responsible for about 8% of dementia cases.
This is the Biden Administration’s best move on regulation to date, though opening up the hearing-aid market has been a bipartisan effort. In 2017 President Trump signed legislation co-sponsored by Massachusetts Sen.
Elizabeth Warren
and Iowa Sen.
Chuck Grassley
that directed the FDA to establish standards by August 2020 to allow hearing aids to be sold over the counter.
As is it often does, the FDA dawdled amid opposition from the hearing-aid oligopoly. But an executive order by President Biden lit a fire under the agency. Mr. Biden said Tuesday that the FDA rule is the “latest action we are taking to make our economy more competitive and less concentrated.” We’re glad to hear it, but he’s overlooking a crucial point.
The main cause of limited competition in the hearing-aid market was government regulation. Yet his Administration is currently working on regulations across the rest of the economy that will squeeze small businesses while benefiting bigger companies that can absorb the additional costs. This will reduce competition and encourage consolidation the way ObamaCare has in healthcare.
More regulation and subsidies usually result in higher prices, which is why the Inflation Reduction Act that he signed Tuesday is more likely to raise prices. If only the Administration listened to the lesson of hearing aids.
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the August 17, 2022, print edition.
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