The market landscape identified a number of demand and supply dynamics that have challenged the development of a low cost, high quality, high volume market, which are characterised below.
| 5.1. Demand | |
| STIGMA & AWARENESS |
Stigma associated with hearing loss and the use of hearing aids combined with a lack of awareness around the need for and importance of ear and hearing care services, including hearing aids, among policymakers, service providers, and end users limits uptake.
Compounding the above is limited available evidence on social attitudes and stigma around deafness, hearing loss, and use of hearing aid to support proper design and delivery of awareness campaigns and services. |
| POLITICAL WILL |
Government involvement is low due to competing priorities. Hearing services straddle health, education, and social welfare agencies that address disability, and are rarely a priority for any of these, due to limited budgets, relatively low awareness of hearing loss, and advocacy towards other issues. Low prioritisation from governments results in limited to no financing for the purchase and provision of hearing aids, or in some cases fragmented financing across different ministries, with lack of coordination. |
| FINANCING |
There is a lack of public, private and donor financing for the purchase of appropriate hearing aids.
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| GLOBAL POLICY |
Current guidelines for service delivery and product selection are outdated or inadequate.
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| PROVISION |
Service provision capacity is constrained and fragmented. Existing guidelines propose a service delivery model that requires highly skilled providers and significant clinical infrastructure, which therefore makes it difficult to scale. There is little investment by governments to set up hearing aid provision systems and train providers, and donors, philanthropy and C.S.R. have not filled this gap. Poor coordination between different ministries and N.G.O.s along with insufficient investment leads to fragmented, small-scale provision programs that do not reach most users and fail to provide support over time. The quality of non-profit provision varies widely with limited coordination with the government. Provision takes place through one-off events where hearing aids are distributed with limited long-term support and aftercare. Audiologists are scarce and often concentrated in a few urban areas or in specialised hospitals, and technician-level support cadres are often not defined or effectively deployed. Lack of adequate referral networks prevents users from receiving services needed in the cascade at appropriate points of care. |
| 5.2. Supply | |
| APPROPRIATE DESIGN |
Hearing aids with basic features are a good starting point for L.M.I.C. provision. The Big 5 release new hearing aids on a 3-year cycle. This rapid pace of innovation has resulted in products with advanced features that may not be required for all users. However, older models with basic features have excellent sound quality and signal processing. If there is sufficient demand for these products, they can be profitable at much lower prices as R&D costs have already been recouped. Opportunities may exist to transfer technology of older generation models to manufacturers who would be willing to supply them in L.M.I.C.s. Innovations in self-fitting technology may present the opportunity to expand the reach of hearing aids as new models and software become available, but this will need to be complemented by operational research in L.M.I.C. contexts to understand user experience and effectiveness of the new products, and to develop appropriate service delivery models around the products. |
| PRODUCTION ECONOMICS |
Cost of hearing aid production is high, so even though price reduction can be achieved through volume-based negotiations, the final purchase price may still be rather high to the end-user. Current manufacturers have optimised their production processes to reduce costs to the extent possible. While there are no expected constraints on the production capacity of components given that component manufacturers serve other markets that are much larger than hearing aid markets, no pathway was identified to reduce component costs further. |
| COMPETITIVE LANDSCAPE |
The Big 5 dominate the industry, with limited opportunity for lower-cost entrants to break through, even in highly underserved markets in L.M.I.C.. The Big 5 have created market entry barriers to cement their position in their industry. At the same time, their primary focus is geared towards premium products, indicating that there may be opportunities at the lower end of the spectrum. The Big 5's participation in public tenders, which demand high volumes for lower cost, quality products demonstrates that with sufficient volumes, even low margin products make a sufficient business case for major players. |
| COST-EFFICIENT SUPPLY CHAINS |
The sales model adds mark-ups along the supply chain, increasing cost to the buyer. In the licensed provider model within the private sector, the bundled pricing model obscures the levels of mark-ups for both products and services in the final price to the consumer. Most hearing aid manufacturers do not respond directly to government tenders in L.M.I.C.s and therefore their products are provided by local distributors who add an additional margin when responding to tenders. It is not known if the margins added are commensurate with the value provided by the local distributor. Furthermore, import duties and taxes in some cases can also add additional cost for the buyer. |
| 5.3. Enablers | |
| QUALITY |
Lack of an objective quality standard means that procurers and providers do not have a way to differentiate quality from non-quality products.
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| PROCUREMENT |
Low funding and inadequate procurement practices lead to lower-quality and more expensive products purchased.
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| MARKET VISIBILITY |
There is limited visibility on the potential and current market in L.M.I.C..
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