Americans pay eight times more for hearing aids than the British

The hearing aid industry in the U.S. is characterized by high prices and limited competition, largely due to a cartel of six major firms that control the market. Americans pay significantly more for hearing aids compared to other countries, with the average cost reaching $4,700 per pair. This high cost is attributed to a combination of factors, including the requirement for prescriptions, which restricts access to cheaper alternatives. Despite the prevalence of hearing loss among older adults, only 20% use hearing aids, often due to affordability issues. Recent regulatory changes by the FDA, prompted by the Biden administration, aim to allow over-the-counter sales of hearing aids, potentially increasing competition and lowering prices. However, the cartel employs various strategies to maintain its dominance, including patent pools and vertical integration, which complicate market entry for new competitors. The firms also exert significant political influence through lobbying and campaign contributions, further entrenching their market position. While the new FDA rules are a step towards reducing costs, the effectiveness of these changes remains uncertain, as the cartel's established practices may continue to hinder competition.

- The U.S. hearing aid market is dominated by a cartel of six firms, leading to high prices.

- Recent FDA regulations allow over-the-counter sales of hearing aids, aiming to increase competition.

- The average cost of hearing aids in the U.S. is significantly higher than in other countries.

- The cartel uses patents and vertical integration to maintain market control.

- Political lobbying and campaign contributions play a crucial role in sustaining the cartel's influence.