FTC Supports Eliminating FDA Distribution Restraints and Facilitating Entry in Healthcare Consumer Products – Hearing Aids
We recently wrote about how businesses might use antitrust and competition laws to increase supply availability and create new distribution channels to get their consumer healthcare products to market.[1] The Federal Trade Commission (“FTC”) endorsed this approach in its comment on the Food and Drug Administration’s (“FDA’s”) proposal to permit, for the first time, the sale of over-the-counter (“OTC”) hearing aids.[2] The FTC comment concludes that allowing new forms of distribution would “enhance competition and innovation,” which would make lower-priced products available to consumers.[3]
The FDA solicited comments on a proposal to permit a new distribution channel for hearing aids—OTC sales—which would increase consumer access to this healthcare product. In evaluating the proposal, the FTC noted that tens of millions of consumers have an unmet need for hearing aids due to high cost and various regulatory restrictions on hearing aid sales. It attributed some of the high retail cost to “inefficient channels of distribution” and some of the access problems to state laws that restrict who can sell hearing aids and the conditions under which they can be sold.
In its analysis, the FTC noted that allowing OTC distribution would likely incentivize an expansion of supply as various retailers would be allowed to sell the products. The FTC noted other benefits as well: “development and entry of lower-priced” products; new channels of distribution; “increased availability”; development and entry of ancillary products; and increased competition and innovation in more regulated products to compete against new distribution channels.[4]
Where there is a supply and demand imbalance due in part to regulatory requirements, advocacy grounded in antitrust principles can help open new distribution channels to get your products to consumers. Baker Botts would be pleased to advise you in this area.
[1] Jody Boudreault, Mark J. Botti, Paul Lugard & Daniel Vasbeck, Tearing Down Regulatory Barriers to Healthcare Consumer Product Distribution, (Dec. 1, 2021), available at https://www.bakerbotts.com/thought-leadership/publications/2021/november/tearing-down-regulatory-barriers-to-healthcare-consumer-product-distribution.
[2] Bureau of Competition, Fed. Trade Comm’n, Comment to Food & Drug Admin. Establishing Over-the-Counter Hearing Aids, Proposed Rule, (Jan. 18, 2022), available at https://www.ftc.gov/system/files/documents/advocacy_documents/ftc-staff-comment-federal-drug-administration-docket-no-fda-2021-n-0555-concerning-over-counter/v220000staffcommentotchearingaids2.pdf.
[3] Id. at 8.
[4] Id. at 2-3.
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