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First-quarter hearing aid sales in 2023 (Q1 2023) were much better than anticipated with a 9.1% increase over the same period last year, according to data generated by the Hearing Industries Assn (HIA), Washington, DC. In a first, HIA also reported statistics for over-the-counter (OTC) hearing aid unit sales; however, they only constituted 1.0% of the total hearing aids distributed by HIA members in the first quarter.
The surge in hearing aid sales is a welcomed change from the last three quarters of 2022 when sales fell into negative territory due to economic headwinds, as well as the strong comparison base of 2021. Before then, the last time hearing aid sales fell into negative territory for that long was almost 15 years ago during the 2008 stock market and housing meltdown.
With these new HIA figures may come a sigh of relief for hearing care professionals about OTC hearing aids, as well. This is the first full quarter since the FDA made them available on October 17, 2022, and several competitive OTC devices are now being offered. Depending on whom you ask, the advent of OTC hearing aids has been variously cast as the “beginning of the end” for professionally fit hearing aids or the “missing link” that will create a bridge and eventual groundswell of consumers into both the OTC and traditional hearing aid markets.
So, what do these admittedly early HIA 2023 numbers tell us?
Total U.S. net unit sales of hearing aids in Q1 2023, including OTC sales, rose by 9.1%— far more than expected—for HIA reporting members. Even when excluding OTC hearing aids, total sales of prescription-fit hearing aids still rose by 8.0%. Commercial sales, including private practices, clinics, and mass merchandisers like Costco, increased by 7.8%, while units dispensed by the U.S. Department of Veterans Affairs (VA) and other government agencies increased by 8.6%.
As noted in HearingTracker’s year-end market review in February, there still may be plenty of recovery room for the VA, which made up 18% of all hearing aid units dispensed in 2022. The VA’s overall 7.2% unit increase last year was actually on the low side of what some expected. For example, GN Hearing CEO Gitte Aabo recently told the Danish business paper MarketWire that she believes a patient backlog remains at the VA following the pandemic, so there is a possibility for extended gains there.
The overall 8-9% sales increase for the first quarter is impressive, especially since it's pitted against a strong comparison base of 7.8% in the first quarter of 2022 when the market was still benefitting from the pent-up demand left over from the pandemic. But, after that, sales in the last three quarters of 2022 decreased gradually by -0.6%, -0.8%, and -3.2% (again, against unusually strong comparison numbers).
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That's why, at the beginning of the year with the economy still in choppy waters and following three flat quarters, sales growth projections from some global manufacturers were guarded and as low as 1-3%. The horizon has brightened considerably since.
For example, last week hearing healthcare giant Demant (parent company of Oticon) made news by upping its financial guidance after very strong Q1 performance, with organic growth now projected to be 6-10% from previous estimates of 3-7%. At the recent Academy of Audiology (AAA) Convention, Demant CEO Søren Nielsen told MarketWire that "Looking across the business, things are good—even better than expected...Our Hearing Healthcare business is driving this change, and in the first quarter, Hearing Care and particularly Hearing Aids delivered very big growth.” GN may also be moving its revenue guidance to the upward range of its previous 2-8%. It should be noted, however, some companies, including GN and Demant, are benefitting from just-launched or expanded product lines (e.g., Oticon Real, ReSound Omnia), a larger market share at Costco with Sonova’s withdrawal from the retail giant, and the reopening of the Chinese market.
But the key point is that sales of prescription hearing aids are strong. HearingTracker’s hearing aid market analysis in February suggested a gradual return to average market growth numbers of 4-6%, noting that a 5% sales increase in 2023 would nudge the US market over the 5-million unit mark for the first time ever.
It also seems apparent that, at least right now, OTC hearing aids are not cannibalizing or negatively impacting the sales of prescription hearing aids. As we've noted in the past, the traditional prescription-fit and OTC markets might be two very distinct entities, with the former generally serving older people with more severe hearing losses, and the latter serving a younger population with milder losses.
OTC hearing aids comprised 1.0% of sales from HIA reporting companies—or somewhere around 13,000 units—in the first quarter of 2023. It’s important to emphasize that these include units only from HIA members like Beltone and GN, Intricon, Signia and Widex (WS Audiology), and possibly others, but do not reflect sales from non-member companies. Although HIA members may be involved in manufacturing some brand-name OTC products like the Jabra Enhance Plus, Sony CREs, and others, some of these products have existed for less than 6 months.
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Therefore, the HIA statistics are likely to reflect only the tip of the iceberg in an OTC market that started in October. They don't include some of the largest OTC hearing aid manufacturers like Lexie/Bose, Nuheara, MDHearing Aid, Eargo, and Nano, to name only a few.
For example, one of the best-established public OTC hearing aid manufacturers, Eargo, reported 8,863 “gross systems” shipped during the fourth quarter of 2022. However, Eargo's return-for-credit (RFC) rate and resulting net units are unknown. (RFCs at the manufacturer level, which include returns, exchanges, remakes, etc, have historically ranged from 15-20% for traditionally dispensed hearing aids, and RFCs for OTC hearing aids are thought to be much higher.)
A recent social media post on LinkedIn by hearing industry veteran Philip Lyons of Novidan Inc—the Minneapolis-based maker of Novimed OTC hearing aids that also fabricates the Lexie Powered by Bose devices—ventured that the entire OTC market will exceed 1 million units in its first year. If that's true and prescription-fit hearing aid units total around 5 million in 2023, then OTC devices would constitute about 17% of the total US hearing aid market.
These numbers and percentages are, of course, highly speculative with no real way to verify them.
So what conclusions can we draw from these intriguing first-quarter HIA statistics? Three things seem to jump out:
Correction: A previous version of this article provided the wrong attribution for the quotes by Gitte Aabo and Søren Nielsen. We apologize to our friends at the Danish business journal MarketWire for the error.
Karl Strom ist der Chefredakteur von HearingTracker. Er war Gründungsredakteur von The Hearing Review und berichtet seit über 30 Jahren über die Hörhilfenindustrie.
