France’s Autorité de la concurrence (Ac) is gathering information to assess the French hearing aid retail sector, with the goal of publishing recommendations it considers necessary to improve competition in hearing healthcare and increase the utilization of hearing devices. According to its website, the Ac is an independent administrative authority that specializes in the analysis and regulation of competitive market forces for the betterment of the country’s economy.
Several areas of interest by the Autorité are subjects already discussed in depth or touched upon in the United States by the Institutes of Medicine (IoM) and President’s Council of Advisors on Science and Technology (PCAST), including the cost of the devices, competition between hearing aid manufacturers and dispensing networks, and information provided to consumers.
The Ac plans to investigate all sectors, including hearing aid manufacturers, intermediaries, distributors, prescribers, and consumers. In its press release, it states that only 1.5 million people in France own a hearing aid compared to the 4.4 million people who might benefit from one, putting the rate of use at 32% (compared to 41% in the UK). Cost of hearing aids remain high, according to the organization, at €1550 per ear (US$1724), and about €1110 ($1224) after compensation by the national health provider (Assurance maladie).
Profit margins for dispensing professionals will also be examined, especially with regard to patient-monitoring services provided by the specialist. The Ac cites a report issued by the Cour de comptes (French Court of Audit) showing a 3- to 3.5-fold mark-up from the wholesale cost of the devices, resulting in gross margins that vary from €650 (US$720) for a basic device to €1250 ($US1390) for a high-end hearing aid. Asserting that 4 of the 6 global hearing aid manufacturers control 80% the world market, the Ac also plans to look into the role played by manufacturers in hearing aid prices, as well as potential conflicts of interest between manufacturers and device providers.
Writing that “hearing instrument specialists currently enjoy a monopoly on device sales,” the Ac plans to examine the limited number of students admitted (numerus clausus) to hearing instrument specialist programs for the profession. The Autorité reports that “the numerus clausus for new students in the profession was set at 199, despite the fact that there appears to be a shortfall of professional services in relation to the needs of the population. Such a shortfall would necessarily translate into higher salaries, which would, in turn, contribute to higher device costs.”
Additionally, the Ac contends that distribution networks operated by healthcare cooperatives are revitalizing the way healthcare works, obtaining reductions of around 15% on the cost of hearing aids due to bulk buying strategies, centralized purchasing, and lower advertising costs. The Ac says it will “ensure that there are no unjustified obstacles to the development of networks with enhanced levels of competition, and will see to it that all conditions are met to guarantee that consumers receive the best possible value for money.”
A public consultation on preliminary findings is due to be held over the summer, with opinions to be handed down by the December 2016 which should “enable an in-depth diagnosis of the sector, and will be accompanied by recommendations that the Autorité deems appropriate in order to improve any instances of dysfunction observed, and in doing so improve the state of market competition,” according to the press release.
What’s behind this? France’s hearing aid market received some major negative press when the September 28, 2015 edition of Le Monde, the country’s premiere newspaper, had a front-page story with the headline Les audioprothèses, trop chères pour 2,1 millions de Français malentendants (Hearing aids, too expensive for 2.1 million French deaf). The article was highly critical of hearing aid pricing, with a large graphic that showed a hearing aid manufacturing cost of €311, marked up to €1550 by the hearing specialist, ending up as €1099 in an out-of-pocket costs after healthcare and social security reimbursement.
Additionally, Europe in general—and France in particular—has experienced a wave of forward-consolidation in hearing aid networks during the past year. William Demant Holding (owner of Oticon and Bernafon) purchased Paris-based Audika in early 2015, one of France’s largest hearing aid retail chains with 460 outlets in France, shortly after Audika sold 55 of its Italian outlets to Amplifon. Then, early this month, AudioNova—Europe’s second largest dispensing chain behind Amplifon—announced that it plans to sell its 1303 stores which operate in 12 European countries, including France.
For more information on the European hearing aid market, see the article in the January 2016 Hearing Review by Luis Godinho, president of the French Union of Hearing Aid Professionals and a member of the Haut Conseil pour l’Avenir de l’Assurance Maladie (HCAAM), titled “What Is the Most Efficient Reimbursement System in Europe?” Additionally, Søren Hougaard and colleagues published the EuroTrak + JapanTrak study in the March 2013 Hearing Review.