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UK Watchdog Is Worried Hearing-Aid Deal Could Raise Prices

 |  December 6, 2022

The merger of 2 leading providers of hearing implants could lead to higher prices for the NHS, and reduced quality and slower innovation for UK patients who rely on these life-changing devices.

The Competition and Markets Authority (CMA) is concerned that Cochlear’s proposed purchase of Oticon Medical – the hearing implant division of Demant –would have a negative impact on patients who need hearing implants, the majority of whom access these through the NHS.

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Cochlear and Demant are both global suppliers of cochlear implants and bone conduction solutions, which are types of hearing devices that are surgically implanted. These devices help improve hearing for people with mild to severe or total hearing loss but serve different patient needs depending on the cause of each individual’s hearing loss.

Following its Phase 1 investigation, the CMA found that the proposed deal would result in the merged businesses having a 90-100% share of the bone conduction solutions market in the UK. Should the deal go ahead as planned, the CMA is concerned that this would result in the elimination of the strongest competitor in this segment (Oticon Medical), which could lead to reduced innovation, higher prices or less choice for hospitals and their patients.

The CMA also investigated the impact of the merger on the supply of cochlear implants, where Cochlear has a very strong position. It found that, in the UK, Oticon Medical has only had a very small position in this segment, is not a significant rival of Cochlear and was unlikely to become a significant rival in the future. The CMA also found that the merged businesses would still face competition from 2 other providers in the UK, both of whom offer a stronger constraint on Cochlear than Oticon Medical. As such, the CMA’s competition concerns only relate to bone conduction solutions.