Sen. Elizabeth Warren (D–Mass) a deregulator?
It almost sounds too good to be true. The progressive Democrat, historically hostile to free markets, teams up with Republican Sen. Charles Grassley (R–Iowa) to propose that stores be allowed to sell hearing aids over-the-counter.
And, of course, it's not true. Far from stripping away regulation to make it simpler and cheaper for people to care for their hearing needs, the Over-the-Counter Hearing Aid Act of 2017 loads on regulation that would, if passed, likely drive low-cost alternatives to hearing aids out of the market.
To make matters worse, this regulatory and crony sleight of hand is bipartisan.
To understand how this could be requires understanding a little bit about hearing aid regulation.
All devices sold as hearing aids in the U.S. are regulated through the Food and Drug Administration (FDA). They require a prescription from a doctor. They are sold by only a handful of companies, and can cost thousands of dollars.
Because of this there exists a thriving market in Personal Sound Amplification Products (PSAPs), which perform the same basic function as prescription hearing aids—amplifying sound for the user—but are available for as little as $20 at Wal-Mart or less on the Internet.
PSAP makers, however, are not permitted to market their products as solutions or even an aid to diagnosed symptoms of hearing loss. The FDA list of specific marketing no-nos includes helping a customer hear conversations in a crowded room, or follow movie dialogue.
To get around this, companies often brand their products as hunting or bird watching aids, helping to pick up natural sounds.
Website reviews for the low-cost aids substitute for the ads. "I purchased these for myself as I cannot afford expensive hearing aids," a Wal-Mart website review reads. "They are good for the money you pay. They amplify and I do not have to ask my friends to repeat everything."
The Warren and Grassley bill, introduced in March of this year, would create a whole new regulatory class of devices called Over the Counter (OTC) hearing aids. These OCT hearing aids could be marketed as a means of assisting with mild to moderate hearing loss, provided they meet yet-to-be determined FDA standards on safety, labeling, and audio output.
Crucially, Warren's legislation instructs the Department of Health and Human Services secretary to redefine what a PSAP is, with the goal of shifting more PSAPs into this new, more regulated OCT hearing aid category.
At minimum, regulation would drive up the cost of PSAPs. And depending on how onerous those new regulations are, many devices would fail to meet the new standards.
To no one's surprise, makers of high-end PSAPs have been lobbying hard for the bill. TechCrunch reports that Doppler Labs—a tech start up that produces a $300 PSAP known as Here One—has been working closely with Warren.
Doppler also hired KR Liu—a member of the Consumer Technology Association's standards committee on PSAPs—to be its director of advocacy and accessibility in 2015. The Consumer Technology Association has since endorsed and promoted passage of Warren's bill.
Bose—maker of the PSAP the $499 "Hearphones"—has spent roughly $50,000 on lobbying for the OTC Hearing Aid Act this year, according to lobbying disclosures. Records from 2016 also show Bose spending $100,000 lobbying on "issues related to the FDA," though no specific legislation is listed.
On Monday, a coalition of some 20 conservative and business groups—including the Campaign for Liberty, the Black Chamber of Commerce, and Tea Party Nation—penned a letter to Sen. Lamar Alexander, who chairs the Senate Committee that is currently considering Warren's bill, warning him of its potential impact.
"Sen. Warren's bill will do nothing to give consumers greater access, or lower prices," the letter warns, going on to call the OTC Hearing Aid Act "another big government ploy to create more regulations and aid corporate rent seekers."
While opposed to Warren's bill, the coalition behind the letter is not all that keen on deregulation, either. The letter goes out of its way to say, "PSAPs are not medical devices, and don't need to be regulated like medical devices." It adds that OTC hearing aids would "lead to poorer health outcomes by eliminating the doctor-patient relationship in finding the right hearing aid and tailoring it to the patient's needs."
In other words, the coalition is opposed to lifting marketing restrictions on PSAPs, the only deregulatory aspect of Warren's bill, echoing the sentiments of the Hearing Industries Association. The bill, the association said in a March statement, might even encourage people to engage in self-directed treatment.
Instead, the association recommends PSAPs "meet the same safety and efficacy standards that FDA requires of air-conduction hearing aids fitted by hearing health professionals," the same standard as multi-thousand-dollar prescription hearing aids.
To date, the fight over the bill, which has yet to get a hearing, is one of deeply entrenched corporate interests eagerly appropriating the language of deregulation for market share. The bipartisan bill favors high-end PSAP manufacturers at the expense of low-end PSAPs.
The debate, unfortunately, is profoundly deaf to consumers.