Business Relationships, Cochlear Implants, and Hearing Aids

Tracey Kruger

Tracey Kruger

Cedric Navarro

Cedric Navarro


Howard Samuels: We are sitting with Tracey Kruger, Vice President of Global Marketing, and Cedric Navarro, Vice President of Regulatory/Clinical Affairs and Quality.

Thank you for taking the time to talk with  It is rare for a cochlear implant company to talk about its technology plans, rather than its history, so this opportunity is very much appreciated.  Users of Advanced Bionics cochlear implants and people investigating cochlear implants for themselves or a loved one value this unique occasion to hear about Advanced Bionics from two of its senior executives.

Sonova Holdings AG acquired Advanced Bionics. Can you tell us a bit about Sonova and the companies under its umbrella?

Cedric Navarro: Sonova Holdings goal is to be a total hearing solutions company.  Prior to the acquisition of AB, Sonova consisted of several hearing instrument companies including, Phonak and Unitron, as well as a variety of hearing instrument retail businesses.  So they had in the Americas and globally companies that actually do the design and manufacturing, fitting and distribution of hearing instruments.

With all of that technology, what they didn’t have was a company that would address the needs of individuals with severe to profound hearing loss who receive limited benefit from conventional hearing instruments.  And they identified Advanced Bionics as the company to fill that niche.  Early on it was obvious that there were a lot of synergies between AB and Phonak, Sonova’s primary hearing instrument brand.

HS: Sonova has reported that new electrode arrays, implants, and processors will be introduced on a roughly annual basis. This is much more frequent than the roughly 5-year product development cycle across the industry in the past.  Can you explain the rationale behind this dramatic increase in development?

Tracey Kruger:  In the past when Advanced Bionics was a privately held company, innovation pace was gated by the amount of money available to invest in product development projects. With the acquisition of AB by Sonova, it was clear that Sonova needed to invest in order for Advanced Bionics to compete in the marketplace, and to create the most innovative products on a competitive timeline.  And so Sonova has invested heavily in the years that they have owned Advanced Bionics to ensure that the technology and the pace of innovation would advance quickly.

Cochlear implant companies have tended to lag in adopting new innovations as compared to hearing aid companies.

One of the reasons Advanced Bionics is able to increase its pace of innovation is our ability to take advantage of technologies developed by Phonak rather than developing similar technologies completely independently.

HS:  Hearing aids don’t need to go through as much regulatory approval as cochlear implants.  Can you describe the difference in the approval process for the two different types of products?

CN:  Actually there is a tremendous difference because as an active implantable device, a cochlear implant is the highest risk classification device whereas a hearing aid is in the lowest risk class.

The biggest difference is that for a hearing aid, companies are free to launch products into the market as quickly as they want because there are no risks to patients whatsoever and there are no claims that affect patient safety.

For any change we make, any new feature we add for cochlear implants, we need to demonstrate to the regulatory agencies that we haven’t negatively impacted safety or efficacy. So in many cases we have to do clinical trials and studies that will take up to a year (or more) to conduct before we even start the approval process.

HS: As a follow-on to that question, I assume that there is always a continuous quality improvement process going on, and that there are probably many improvements that happen over the course of the life of a product that don’t get introduced as a new product.  It’s maybe something that is more reliable.  Do you have to go through the same approval process for each of those?

CN:  Yes we do.  For improvements to enhance reliability or to improve manufacturing yield, the FDA requires follow-up submissions.  The type of the change dictates the length of the approval process.

HS: Hearing aids generally come in different levels of performance and features, depending on how much you choose to pay.  Cochlear implants seem to come loaded with all of the goodies.  Can you explain the difference in product offerings?

TK: A lot of the difference between how hearing aid companies market their devices and how cochlear implant companies market their devices, which tend to be much more inclusive, is really more historical than anything else.  When the industry first started, the idea of  ‘kits’ were introduced so that a recipient would have everything needed to use their cochlear implant system.  As new accessories became available, more often than not they were simply added to the kit provided to new recipients rather than sold completely separately.

Reimbursement structure and competitive pressure has helped to further establish the practice of including a significant number of key system components in sound processor kits.

In contrast, in many cases recipients of hearing aids pay out of pocket for their hearing instruments and have a broad range of needs based on the individual degree of hearing loss, lifestyle and economic considerations.  This wide variability created the need for differing levels of sophistication amongst hearing instruments, as well as an extensive range of features, accessories and pricing to address the market demand.

Next: Accelerated Product Development.