The White House Briefing Room this week said a new executive order aimed at promoting competition in the American economy was issued. In the order, the President directs HHS “to consider issuing proposed rules” for over-the-counter (OTC) hearing aids “within 120 days”.
OTC hearing aids were among 72 initiatives, the executive order includes mandates to lower prescription drug prices, ban and limit non-compete agreements and occupational licensing requirements, ban excessive early termination fees for internet service, and make it easier to switch banks. .
The Biden administration argues that “fewer large players have controlled more of the market” in areas like “prescription drugs, hearing aids, and internet service”. The administration also predicts that OTC hearing aids will “save Americans with hearing loss thousands of dollars by allowing hearing aids to be sold over the counter at drug stores”.
Regulating OTC hearing aids
Surprisingly, many DTC hearing aids are registered with the FDA under product classifications that are intended for medical-model hearing aids. If the FDA forces DTC sellers to reclassify their products as OTC (once the new class exists) and requires product clearance (510k), this would mean that many of the FDA-registered hearing aids being sold DTC today may be pulled from the market temporarily.
This would ultimately be a good thing for consumers. It would mean that consumers would receive an enhanced level of protection from the FDA, as manufacturers would be required to prove the effectiveness and safety of any devices being sold directly to consumers. Without audiologists vetting the products by fitting them on their patients, the FDA has a higher level of responsibility to vet the products before allowing them to be sold on the open market. (My personal opinion)
The Office of Management and Budget (OMB) recently published its official Spring 2021 Unified Agenda, which included tentative plans for the FDA to address OTC hearing aids in 2021. This isn’t the first time the FDA has planned to work on the rules—this is the fifth time the rulemaking session has been scheduled—but today’s announcement does seem to indicate that there is a higher likelihood of the session actually occurring.
Kate Carr, Hearing Industries Association (HIA) President, said “once the draft is released, we anticipate a public comment period, followed by further FDA review. It could take up to nine months or more for the final regulation to be released.” She also shared the following graphic, which helps illustrate FDA’s rulemaking timeline:
FDA Rulemaking Timeline, courtesy HIA
Hearing aid stocks dropped on the news
The share price for the largest medical-model hearing aid manufacturer on the planet, Sonova, was down sharply (~7%) following the announcement. Other large players were down too: Demant A/S was down ~9%, and GN was down ~6%. Eargo’s stock was also down.