On March 20, Senators Elizabeth Warren of Massachusetts, a Democrat, and Charles Grassley of Iowa, a Republican, introduced in the United States Senate a piece of legislation entitled the Over-the-Counter Hearing Aid Act of 2017. The next day, Representatives Joe Kennedy III of Massachusetts, a Democrat, and Marsha Blackburn of Tennessee, a Republican, introduced the same bill in the House of Representatives. If passed into law, the legislation will create a new regulatory class of hearing aides, which must meet guidelines established by the Food and Drug Administration concerning safety, effectiveness, and truth in labeling.
To be sure, hearing loss is an enormous concern in the country today, especially as Baby Boomers enter their retirement years. Nationwide, 38 million people suffer from some degree of hearing loss. More than 40 percent of people aged 60 and older have hearing loss; for people aged 80 and older, that number jumps to 80 percent.
Not surprisingly, then, hearing aid sales represent a big business. In 2016, 3.65 million hearing aids were sold in the United States. Since the average price of a hearing aid pair is $4,700, with some prices climbing as high as $8,000, it is clear that hearing aids constitute a multi-billion industry. From its inception in 1965, Medicare has never paid for hearing aids; following Medicare’s lead, private insurance companies have almost always refused to pay for hearing aids as well. This means that typically the patient alone must cover the cost of a hearing aid.
The issue of hearing loss may be prevalent, but that does not mean it’s being solved. According to a report released by the National Academy of Sciences, untreated hearing loss is a major problem plaguing many Americans. Some companies see an opportunity to cater to people suffering from untreated hearing loss — and in the process to rack up substantial profits.
Besides a hearing aid, there is only one other device that can help with hearing loss — a Personal Sound Amplification Product (PSAP). PSAPs constitute, to quote one source, “a wide category of products ranging from cheap devices that help amplify sound” — like a $20 device sold at Walmart — “to sophisticated devices that resemble hearing aids in all but their name.” Since PSAPs are not considered medical devices, the FDA does not regulate them. Moreover, hearing aides require a patient to visit a doctor and receive a prescription; PSAPs do not.
The Warren-Grassley bill will create a whole new category of hearing devices. The device will be a hearing aid, but it will be sold over the counter without a prescription. A person will test his hearing using an online program or a smart phone app, then go to the store and, based on the results of his self-administered test, buy a hearing aid he believes is right for him. Because the OTC hearing aid will be considered a medical device, it will be subject to FDA regulations.
There is considerable pushback against the proposed legislation from hearing aid manufacturers as well as organizations like the American Academy of Audiology and the American Speech-Language-Hearing Association. Opponents of OTC hearing aids argue that hearing loss can result from something as minor as earwax buildup or as serious as an ear canal tumor, neither of which may be diagnosed without the help of a doctor. A home test would simply not detect a potentially deadly tumor.
At the same time, the medical device industry is an ardent proponent of the Warren-Grassley bill, since billions can be made with this new device. As it happens, Elizabeth Warren has a history of supporting the medical device industry. She worked so hard at repealing the medical device tax contained in the Affordable Care Act that in 2015 Time reported, in an article entitled “Elizabeth Warren Goes to Bat for the Medical Device Industry,” that “Warren’s coziness with [medical device] companies is now earning her criticism within her party, with one former Democratic Senate staffer describing some of her positions as ‘repulsive.’” Why such passionate advocacy from a woman who built her reputation on being tough on business? One reason. The medical device industry has a significance presence in Massachusetts, accounting for 23,000 jobs and $17.6 billion worth of the state’s economy. Warren is delivering for her constituents back home.
Three companies — Samsung, Panasonic, and Bose — are poised to cash in on OTC hearing aids. The companies are already preparing devices to be sold in the new market created by the Warren-Grassley bill. One of the biggest winners will be Bose, which happens to be located in Massachusetts. Bose spent $100,000 on lobbying the FDA in 2016; so far this year, it has spent $50,000. “Warren’s bill benefits big corporations,” The Hill observed, “including Bose, located in Senator Warren’s home state.”
In the 2016 presidential campaign, Hillary Clinton was harmed by her perceived close ties to Wall Street. If Elizabeth Warren mounts a 2020 presidential campaign as expected, her cozy relationship with the medical device industry may come back to haunt her.