Cochlear’s ROI to society
Cochlear Limited (COH) is the leading cochlear implant manufacturer, with global sales of ~$1.4bn, over 4000 employees and an annual R&D spend of over $180m. Cochlear implants deliver life-changing outcomes to recipients of all ages.
According to Cochlear’s Environmental, Social and Government Report 2020 the lifetime societal cost of a pre-lingual deaf child in developed markets is expected to be over US$1.5m, primarily due to the cost of special education and lost productivity. For adults with profound hearing loss, the aggregate societal cost is estimated to be between US$392,000 and US$702,000 depending on age. Furthermore, adults with hearing loss are more likely to be unemployed or under-employed and found to earn approximately 77% of the average income of those with mild hearing loss. For seniors, those with severe hearing loss are almost five times more likely to develop dementia than people without hearing loss. The return on investment of cochlear implants to society is expected to be over 10:1 for seniors and over 13.5:1 for children. This means that for every dollar put towards a cochlear implant for children, there is a savings or benefit of $13.50 for society. The company generated ~$300m in sales to emerging markets, ensuring that the technology and benefits are made available to some of the most disadvantaged and volatile regions in the world.
Cochlear has a global market share of ~60% and is the industry leader. Less than 5% of people who can benefit from a cochlear implant currently receive one, and as the global leader, the company’s strategy is to increase awareness of the benefits and increase accessibility of the technology. Despite COVID-19, investment in technology and awareness is imperative, and Cochlear continues to do just that despite a significant hit to short-term earnings. In fiscal year 2020, the company reported a 42% decline in earnings and raised more capital from existing shareholders. However, Cochlear has extended its leadership in technology, and introduced valuable features including one that enables clinicians and recipients to conduct hearing tests remotely.
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