WOLFGANG MUELLER is a veteran print, radio and Television journalist. He is also on the committee of the Australian-German Student Exchange..

I had the opportunity to meet Cochlear CEO Chris Roberts and Chief Scientist Jim Patrick last week. The meeting and tour of the company was organised by the Foreign Correspondents' Association where I'm on the executive. Six business journalists from Japan, the U.S, Switzerland and India attended the meeting at Cochlea's boardroom.

From Left to right: FCA members Urs Wälterlin, Vina Lee, Neena Bhandari, Juergen Corleis, Wolfgang Mueller and Koji Nozawa at Cochlear Limited in Lane Cove, Sydney.

Chris Roberts made a short presentation about the company's plans to build a next generation ear implant. The new model to be launched next year will have double the number of inner ear nerve stimulators. However, Roberts says the new model might improve actual hearing by only a small margin leaving me with the impression that the current technology has reached its peak. Roberts says the Federal Government has given the green light to the updating of older Cochlear implants and will spend 8 million dollars over the next 4 years on the program. He says other researchers are showing interest in Cochlear's nerve stimulation techniques - for bladder control - but agreed that Cochlear is basically a 'one-product' company - a product which is now 25 years old.

Roberts says Cochlear has so far delivered a total of 56-thousand implants and is still the leading supplier in that field. Last financial year, Cochlear has sold about 10-thousand implants, all virtually handmade in their factory in Lane Cove. Roberts sees good opportunities in China. At the same time he admits that the Cochlear-type hearing aid struggles to cope with tonal languages and cannot distinguish well between pitch variations. He says because of China's one-child policy, parents and whole families for that matter are willing to spend big if that improves their offspring's future prospects. Roberts says the cost of having an implant - from first diagnosis to medical assessment, surgery and training in using the transplant is about US$ 50-thousand. He says the actual product makes up 30% of the total cost. He says that's comparable to heart pacemakers. Only Japan and Germany fully fund the implant - in other countries patient contributions can be very high.

Roberts did not want to talk about the forthcoming results but acknowledged that profit downgrades have been made. He says public funding limitations are the biggest brake on growth. He says the company wants to get away from just dealing with profoundly deaf patients to helping people preserve their ability to hear when it starts to diminish.

Roberts downplayed a request by the US Department of Justice for information saying the company has not been charged with anything. But he says the legal cost of the process will have to be carried by Cochlear.

Talking later to Jim Patrick, the Chief Scientist, I got the impression that Cochlear's management is worried about the danger of a possible takeover by US competitor Boston Scientific which appears to have deep pockets. BS paid US$ 740-million for Advanced Bionics in June - that's equivalent to the total market cap of Cochlear despite the fact that Advanced Bionics is a much smaller company. Jim Patrick maintains that Cochlear products have the best quality because of their careful manufacture and that competition products are prone to many more faults. Well, that could make Cochlear an even more attractive takeover target.


VINA LEE works as a freelance TV producer and journalist, especialising in documentaries and current affairs. Most of her productions are telecast on NTDTV, a global Chinese television station headquartered in New York. She migrated to Australia in 1990 from China. .

It was the second last day of July, a crisp, sunny winter morning. I was due to be picked up at Central Station at 9.15 am sharp. I arrived around 9:12am and FCA members Juergen Corleis and Urs Wälterlin were already there. Waiting in a maxi taxi was Neena Bhandari, who had organised the trip to Cochlear Ltd, an Australian company that is today a world leader in design and production of Cochlear implants for the hearing impaired.

Despite being three minutes before time, being the last one to arrive made me feel a bit uncomfortable. Well, it was my first adventure with a FCA group and so I sat quietly in the rear seat. Meandering our way through the traffic snarls of morning rush hour, we reached Wynyard station to pick Wolfgang Mueller and Koji Nozawa.

I did not really know what to expect from this tour. The word `Cochlear' was completely unfamiliar to me. I was not even sure if I was pronouncing it correctly. Urs Wälterlin was already armed with an exhaustive article he had written about the company. I tried to pick the threads of what Cochlear meant from Urs and Juergen's conversation in the taxi.

The Lane Cove-based company began about 25 years ago with only six patients. Today, around 56,000 people in more than 70 countries wear their high-tech hearing implants.

Chief Executive Officer Dr Chris Roberts and Chief scientist Dr Jim Patrick gave a comprehensive introduction to the company and its product. I was impressed how the Cochlear implant works: The speech processor has a small microphone which picks up sounds, turns them into electric signals and sends them to the transmitter. The transmitter then sends the signals through the skin to the internal implant. The implant converts the coded signals into electrical energy and sends them to the electrode array. This stimulates the nerve in the cochlea and the signals are recognized by the brain as sound.

These extremely complex and delicate Cochlear implants are virtually hand-made. Dozens of hours of work is required to produce a single Cochlear implant. Around 200 people work in the company's headquarters - wrapped from head to toe in sterile clothing. The company has around 500 employees in total. It costs a patient or his health insurance fund about U$50,000 to have a Cochlear implant. So it comes as no surprise that patients need to be ready - both financially and emotionally. However, the high price is worth it as regaining hearing allows recipients to lead a normal, productive life and the adults to join the workforce.

It is a win-win situation for the patient and the society as a whole. But the decision for an implant is not easy, as recipient Alan Jones explained, "To recognize that I have a hearing problem was harder than to get the Cochlear implanted. Quite often we deny our problems and therefore become isolated from our families and community".

For me, this first adventure with the FCA members was a great experience as I look forward to many more such trips.