Cochlear Bionic Ear Essays - Otology, Audiology, Artificial Organs

Cochlear Bionic Ear 1. Issues ? Should they increase or decrease the price? ? Should they invest in marketing their implant better? ? Should they use the extra capacity to launch a children model or a cheaper second one? 2. Background Company In 1979, Nucleus Limited, a local company specializing in cardiac pacemakers and diagnostics ultrasound imaging equipment was chosen to commercialize an implanting hearing devices into the cochlea, or inner ear, invented by the University of Melbourne, Australia. By September 1982, they were ready to perform the first implant, which proved to be a huge success. The following year, Nucleus Cochlear Pty Limited set up in Sydney to handle the new innovation's research and development, manufacturing, and sales. The first US implant took place in 1983. Real momentum began two years later when the US Food and Drug Administration (FDA) gave its approval. Only when this had been granted would US health insurers provide coverage for the product and the surgical procedure necessary to implant it. In 1989, Cochlear produced and began clinical tests on the world's first inner ear implant for children. Cochlear introduced the European market in 1986, and set up an office, Cochlear AG in Basel, Switzerland, in 1987. The FDA's opinion was regularly adopted by the European medical authorities, which didn't have regulatory bodies such as the FDA for medical devices. By 1989, when the national health systems in certain countries began to reimburse patients in full or on a quota basis, the company's European position strengthened, which led to worldwide growth from 1988 to 1989 despite the decrease in US unit sales. In an attempt to open up the Japanese market, a four-man operation called Nihon Cochlear was establish in Tokyo in 1988. On this market the FDA was not valid and a governmental import license, which Cochlear was waiting for had to be obtained. The company reached financial breakeven for the first time in 1986. Unit sales in the US increased from 409 in 1987 to 596 the following year, although they decreased to 553 in 1989. Market There were two categories of deaf people, about equal in size: ?postlingually deaf? (due to illness, accident,), and ?prelingually deaf? (deaf at birth). The hearing impaired market was comprised of the profoundly deaf and the severely deaf. Severely deaf people could be helped, to a greater or lesser extent, by a hearing aid, which amplified sound, at a cost of $1,000. Unsatisfied people could represent a potential market. Generally, hearing aids were useless for the profoundly deaf people. Researches showed that the market size in developed countries was estimated at 500,000 profoundly deaf adults worldwide, and another 500,000 severely deaf adults. One piece of research showed that over 40% of potential users were against the idea of ?having wires in their head?, ?were afraid of doctors and hospitals?, or ?saw the procedure as far too risky to justify?. Cochlear therefore estimated that only about 10% of the profoundly deaf, or about 50,000 patients worldwide, were possible implant candidates. Apart from this backlog, the data suggested that another 3,000 new cases occurred each year worldwide. Cochlear assumed that about 10% of deaf people were able to fund the implant themselves. Widely dispersed, there were deaf people in all age categories, although 25% of the profoundly deaf were over 65 years of age. The decision-making process for an ear implant could be complex, as there were many actors and influences well beyond just the end user. These included doctors, regulatory authorities, families, insurance companies, deaf associations, and the media. The characteristics of patients and doctors differed in the US, Europe, and Japan. American patients tended to be litigation prone and self-directed in their decisions. American specialists characteristically offered patients' options rather than dictating what had to be done. European deaf patients were more influenced by the surgeon, were not as litigation minded, and the quality of life was more pivotal in their decision making than were professional prospects. They were somewhat swayed by the look of the device, although less so than Americans. Since the main motive for Japanese patients was to cure the problem, they tended to do as their doctors told them. Of the 7,000 American ENT (ear-nose-throat) specialists, 200 fitted Cochlear devices in the implant centers, of which 100 did so at least once a year. Of the 2,500