The UK’s competition watchdog has provisionally found that a proposed merger between two of the biggest players in the hearing implant sector could mean a worse deal for patients and higher costs for the NHS.

The Competition and Markets Authority (CMA) opened an investigation into the merger of Cochlear and Oticon Medical, the hearing implants division of Demant, at the end of last year.

Following the probe, the regulator said that the merger would likely lead to a “substantial reduction in competition for certain hearing loss products”, specifically bone conductive solution (BCS) products, which are implants that bypass the damaged parts of the ear, converting sounds into vibrations that are sent directly to the inner ear.

It said that competition between firms that supply these BCS products is vital given that Cochlear and Oticon are the only two suppliers of this technology.

If the two companies were to merge, they would dominate the supply of BCS products in the UK, with a share of more than 90 per cent of the market.

The CMA warned that this could mean people that need hearing implants will have less choice and poorer quality, while the NHS could have to pay higher prices.

“We’re concerned that this deal could seriously reduce competition with patients having fewer suppliers to choose from, potentially losing out from less innovation and lower product quality going forward, as well as in the long term potentially costing the NHS and taxpayers more money,” said Kip Meek, chair of the CMA’s independent inquiry group. “Any remedies offered by the parties that could effectively address our competition concerns and any other adverse effects of the proposed deal will be considered.”

The authority is exploring potential ways to address its concerns as part of the next stage of its investigation. This could include stopping Cochlear’s purchase of Oticon Medical or preventing the sale of the BCS part of that business.

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