In late summer 2022, the FDA announced something ear-resistible (so sorry, couldn’t help myself) that will have far-reaching implications for the multibillion-dollar hearing aid market. After years of bureaucracy and delays, the federal agency made it legal to sell hearing aids for mild to moderate hearing loss over the counter (OTC).
The FDA anticipates the ruling will usher in innovation and competition in the hearing aid tech market, which could become extremely profitable for the whole industry.
The OTC hearing aid industry was already valued at $1.05 billion in 2022, according to market research firm Grand View Research, even though the FDA ruling only went into effect in mid-October. The ruling could also be good business for audiologists, who have largely been in support of the OTC ruling.
Two products—one from California-based company Eargo and another from a collaboration between IT giant HP and Australian startup Nuheara—are the first commercially available OTC hearing aids. Differing in appearance, HP/Nuheara’s product was designed to look more like earbuds while Eargo’s is meant to be invisible.
The prices are also very different. HP/Nuheara’s OTC hearing aid, called the HP Hearing Pro, costs $699, and Eargo’s latest model (Eargo 7) comes in at $2,950.
Healthcare Brew sat down with leaders from both companies at CES 2023 to learn more about their products and what the new OTC ruling means for their businesses.
This interview has been edited and condensed for clarity.
Tell me about your hearing aids. What makes them unique?
John Luna, CEO of Nuheara: Our product is an earbud that is rechargeable. It has directional microphones and active noise cancellation. It also has Bluetooth streaming, which [Eargo’s] product does not. Bluetooth streaming allows you to take telephone calls, listen to music, stream video calls through Teams or Zoom—just like a headset would normally be used. It’s a lifestyle product. It’s meant for situational use for wearing hours at a time when you need it.
Kyong Coleman, senior director of integrated media marketing at Eargo: We’re trying to have our hearing aids be as natural as possible, so you don’t even notice it. We want it to feel invisible in terms of the experience as well as the visual part of it. Before OTC, with more traditional hearing aids, the same kind of technology would cost up to $10,000. And you’d have to change the batteries, and if you couldn’t do that yourself, you’d have to go back and pay to do that. Our product is rechargeable. It gets 16 hours of straight use before it needs to be charged.
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Who’s your target demographic?
Luna: People 18 years or older with mild to moderate perceived hearing loss.
Christian Gormsen, CEO of Eargo: Our target is the senior demographic because for them, it becomes really hard to fully enjoy life without hearing aids. You can say 50 and up, but I would say 50 is not that old.
Who do you consider to be your competitors?
Luna: Everyone’s a competitor. Our product is a very different form factor. Invisible is great, invisible is sexy, right? But it’s not for everybody.
Gormsen: We don’t really have a one-to-one competitor. We’ve taken the best tech of the clinical world, and then we’ve taken more of a consumerized approach. I think we pioneered it. There are others doing that now and trying to do that. But you know, not to the extent that we’re doing it.
Where will your products be sold?
Luna: Wherever you can buy HP products and in consumer electronics stores, as well as any retailer. They’ll be available in stores in February.
Gormsen: We started selling the Eargo hearing aids online and over the phone as direct-to-consumer medical devices in 2017.
Coleman: They’re now available in 1,500 Verizon stores across the US.
Will your hearing aids be covered by insurers?
Luna: Medicare Advantage plans will cover them, and if you have an HSA or an FSA, they should cover them as well. If you have hearing aid insurance through your regular health insurance plan, it should cover them—although, because they’re OTC and you’re purchasing them, you would have to self-submit that claim.
Gormsen: We’ve entered into a strategic partnership with NationsBenefits [a supplemental benefits manager] to look at how you can start applying your health benefits toward over-the-counter hearing aids. We also have payment plans for customers because it is a big investment up front.