Hearing Aid Stocks – What To Expect And Who To Watch Following The Recent Executive Order

It is considered a breakthrough that the U.S. Food and Drug Administration announced that hearing aids will be sold over-the-counter (OTC) as soon as mid-October. The announcement of this final ruling came on August 16, 2022 after President Biden’s Executive Order on Promoting Competition in the American Economy to make health care costs more affordable caused a 120 day deadline for action.

Key Takeaways

• The FDA ruling will make hearing aids more affordable and readily available.
• Tens of millions of Americans suffer from hearing loss but were priced out.
• List of manufacturers and retailers below who stand to benefit from the ruling.

Hearing loss can affect anyone, and it’s a travesty that so many folks had to accept living with poor hearing for so long. Almost half the people in the United States above the age of 65 have some degree of hearing loss. Aside from age, hearing loss is usually caused by exposure to loud noise, or a handful of medical conditions. Folks with permanent hearing loss can use hearing aids to help make sounds and speech around them louder, enabling better communication but the effects are mostly irreversible.

What the Ruling Changes

The FDA’s new ruling is historic because it has been reported that 28.8 million American adults could benefit from hearing aids. With roughly 15% of American adults experiencing some hearing loss, it’s evident that an OTC product will help many who previously couldn’t afford hearing aids. As a result, hearing aid stocks and companies expect an overdue increase in revenue.

Millions of Americans either had to spend excessive money going through the medical process necessary to obtain hearing aids or simply never purchased them due to inaccessibility issues. In fact, the complicated process of buying hearing aids was the largest barrier for many who needed them.

The process involves a consultation with an audiologist, then arranging a time to fit the devices correctly. But now, the new FDA ruling will allow adults with mild to moderate hearing loss to purchase devices from retailers without a medical exam, prescription, or fitting. Many companies are beginning to offer online hearing tests, so one can invest in a pair of hearing aids without leaving the comfort of their own home.

The FDA will still regulate the quality of these OTC hearing aids to ensure consumer safety.

Which Retailers will be First to Carry OTC Hearing Aids?

As soon as the FDA announced the final ruling, given the breadth of individuals affected, there was a wave of interest in where to purchase the products. The biggest question for those affected by hearing loss – and for the savvy investor – surrounds which retailers will be the first to carry these OTC hearing aids for consumers.

Here are some of the first retailers expected to carry OTC hearing aids.

• CVS: While it’s been selling hearing amplifiers over the last few years, CVS will begin offering OTC hearing aids once the FDA ruling goes into effect in mid-October.
• Walmart: With its expansion in pharmacy-related products, Walmart is looking to add OTC hearing aids in mid-October.
• Best Buy: As soon as the FDA approved OTC hearing aids, Best Buy announced that we could expect to see hearing aids in stores. Best Buy already sells other hearing devices, including TV amplifiers, personal sound amplification devices, and hearing protection devices.
• Direct-to-consumer: Many companies will offer OTC hearing aid products directly to consumers. It’s unknown exactly which providers will enter this market, but expect to see names like Eargo, Lively, and Audicus more regularly.

This new class of devices will provide options for folks who may have been priced out of the hearing aid market. It’s also worth mentioning that many retailers have stated that the new OTC hearing aids will be available online so that you don’t even have to go into the store to get your device.

Even more notable is that this new FDA ruling should lead to innovation regarding hearing aid devices and related products. New entrants into this market could shake up the existing competition. Watching tech companies like Apple and Samsung will be fascinating as they aim to improve products to benefit those with hearing issues.

For example, Apple’s Conversation Boost feature on the AirPods Pro helps you distinguish speech in noisy environments. There’s no telling what other innovations could come out of this ruling and where one could find the ideal hearing product for their situation.

Consumer Costs to Buying Hearing Aids

It’s well-known that cost was the primary factor preventing many Americans from buying hearing aids. According to this White House release, hearing aids, on average, went for more than $5,000 per pair. The release also states that due to the high price of hearing aids, only 14% of roughly 48 million Americans who needed hearing aids purchased them.

The good news is OTC hearing aids are estimated to cost between $300-$600 per device, according to the American Academy of Audiology. This significant price reduction should lead to an increase in hearing aids sales to those who desperately need them.

Biggest Hearing Aid Manufacturers

1. Eargo: Eargo has stated that its hearing aids are rechargeable and virtually invisible. All hearing aids come with a portable charger, USB plug and cable, wax guard, and cleaning brush.
2. Lively: Lively sells one type of hearing aid with rechargeable and battery-operated models in different colors. This company has been offering hearing aids since 2019 through an online hearing test.
3. Starkey: Starkey offers hearing aids that double as health and wellness trackers. It also provides an app that can control the device.
4. MDHearingAid: This company sells medical-grade hearing aids that are FDA-approved under the current standard. They offer a range of models that won’t break the bank.
5. Signia: Signia is one of the top global hearing aid brands. It offers various hearing aids, starting at as low as $1,000.

Shopping for a hearing aid for the first time can be an involved process. While comparing different brands and models, consider these factors:

• Price ranges and payment plan options
• Product quality
• Hearing test availability
• Sustainability of the product (e.g. rechargeable)
• FDA approval

What Hearing Aid Stocks are Worth Looking Into?

With hearing aids becoming more accessible to Americans, sales are expected to increase dramatically. You may want to consider investing in hearing aid stocks to take advantage of this boon in sales.

Eargo Inc. (EAR)

Eargo is a medical device company looking to capitalize on this new opportunity in the hearing aid market. This company offers fully rechargeable hearing aids that are all FDA-approved. It also offers free hearing screenings and online appointments with a hearing expert for anyone who purchases an Eargo hearing aid.

Eargo went public in October 2020, and its shares have since spiraled downward due to market volatility. Still, because the new ruling is expected to increase hearing aid access to tens of millions of Americans, it may be worth investing in this penny stock.

Knowles Corporation (KN)

Knowles makes electronic parts for hearing aids, which include microphones, receivers, and programmable components. The company also makes products for mobile devices, headphones, and other mobile communications devices.

With the increasing demand and availability of hearing aids, this company should ramp up production. And because Knowles is involved in other communication product industries, the company has a diversified income stream.

Sonova Holding AG (SONVY)

This Swiss company is the world’s largest manufacturer of hearing aids and a respected brand worth investing in. Sonova currently markets its products under four businesses and five core brands, plus various regional brands in the U.S and worldwide.

Sonova is an over-the-counter stock, meaning there’s less regulation and additional risks to consider. However, its established global presence and strong financial track record make it a stock worth looking into.

Energizer Holdings, Inc. (ENR)

Energizer is one of the largest battery manufacturers in the world and a household name. Rayovac, an Energizer subsidiary, has been manufacturing hearing aid batteries for over 50 years, and the company guarantees that no other hearing aid battery can last longer.

As hearing aids become more accessible, the demand for these different types of batteries should go up accordingly.

The Final Word on Hearing Aid Stocks

The FDA’s new ruling will allow folks access to affordable hearing aids, which should drastically increase the demand for this product and related products. Now could be the perfect time to invest in hearing aid stocks as companies focus on increasing supply to match demand.

If you’re unsure which hearing aid stocks are the best for your portfolio, you can always choose a Q.ai Investment Kit focused on technology, an easy way to diversify your investments and level risk.

Download Q.ai today for access to AI-powered investment strategies. When you deposit $100, we’ll add an additional $100 to your account.