December 30, 1996
Federal Trade Commission
Pennsylvania Avenue at Sixth Street NW
Washington, DC 20580
Dear Chairman Pitofsky:
Enclosed is a recent report concerning hearing aids sent to us by a hearing-impaired retired engineer. While the problems of collusion or conscious parallelism have been part of this industry's practices for decades, it is time for the Federal Trade Commission to take another searching look at what is going on.
There is little question that, absent previous investigations and actions by the FTC in a closely-related area, prescription eyeglasses, many Americans would be quite unable to afford what would be $200 or more eyeglasses at today's prices. Because the previously missing element of true competition was brought in as a result of FTC actions in the 1970s, eyeglasses are now priced much lower than they otherwise would be.
As our population ages, the number and percent of Americans with impaired hearing is soaring as are the prices of effective hearing aids. For many of these people, hearing aids, with price-tags often in the $1,000 or higher range, are unaffordable.
The only point of disagreement we have with Mr. Katz is the role of FDA regulation of hearing aids as medical devices in causing high prices. That it was not the requirement for a prescription for eyeglasses but the lack of price competition that was responsible for the previous price-gouging for those products can be deduced from the fact that although the prescription requirement remains, competition in pricing has been dispositive in making eyeglasses more affordable.
We would like to meet with you to discuss this serious problem
as soon as possible.
Sidney Wolfe, M.D.