3.1 Cochlear implant systems consist of internal and external components. A microphone and sound processor are worn externally behind the ear. The sound processor is connected to a transmitter coil, which is worn on the side of the head. Data from the transmitter coil are passed to a receiver–stimulator package that is implanted into a surgically fashioned depression in the mastoid bone. The receiver–stimulator translates the data into electrical pulses that are delivered to an array of electrodes. These are placed surgically within the cochlea. The electrodes stimulate spiral ganglion cells that innervate fibres of the auditory nerve. The activation of electrodes provides a sensation of hearing, but does not restore hearing. 
3.2 The NHS buys cochlear implant systems under a long-term procurement contract between the 4 companies and the NHS supply chain. The procurement contract in use during this appraisal applied until 31 October 2008 and there was an option for an extension of a further 24 months. The costs of the implant systems noted below are based on information from the NHS supply chain on the national procurement contract. In addition to the main procurement contract, companies offer local discounts based on volume of sales; therefore costs may vary in different settings. Except for the discount for the Neurelec system, discounts for second implant systems are not part of the NHS supply chain contract, but are offered nationally by some companies. 
3.3 The Clarion CII Bionic Ear System and the HiResolution Bionic Ear System (Advanced Bionics UK) are indicated for adults (18 years or older) with postlingual onset of severe to profound, bilateral sensorineural hearing loss (only hearing sounds with an intensity equal to or greater than an average of 70 dB HL) who derive limited benefit from appropriately fitted hearing aids. For children aged 12 months to 17 years the implants are indicated for profound bilateral sensorineural deafness (only hearing sounds with an intensity equal to or greater than an average of 90 dB HL) who derive limited benefit from acoustic hearing aids. The current NHS supply chain list price of the implant system (which includes the implant and processor) is £16,550 and the price paid by the NHS supply chain for the implant system is £14,900. Information supplied by the company indicates that a 40% discount on the list price for a second implant (list price for implant without processor and without discount: £10,500) is only offered when the second implant is used for simultaneous bilateral implantation. A 25% discount on the list price of £10,500 is offered when the second implant is used for sequential bilateral implantation. No discounts are offered for the purchase of a second processor. Costs may vary in different settings because of negotiated procurement discounts. 
3.4 The Nucleus 24 and Nucleus Freedom cochlear implants (Cochlear Europe) are indicated for adults (18 years or older) who have bilateral postlingual sensorineural hearing loss and who have limited benefit from binaural hearing aids. For children (aged 12 months to 17 years) the implants are indicated for bilateral sensorineural hearing loss if little or no benefit is derived from binaural hearing aids. The implants are also indicated for adults who have prelingual or perilingual profound sensorineural deafness and who obtain no benefit from a hearing aid. However, the package insert notes that these people are likely to have limited benefit from a cochlear implant. The current NHS supply chain list prices of the Nucleus 24 and Nucleus Freedom cochlear implant systems are £14,350 and £15,250 to £15,550 respectively. The price paid by the NHS is based on the volume acquired by each cochlear implant centre and the company offers a 10% discount for every 10 implant systems purchased. Additional information supplied by the company indicates that discounts for a second implant system (implant and processor) for bilateral cochlear implantation are offered on a case-by-case basis. Costs may vary in different settings because of negotiated procurement discounts. 
3.5 The Pulsar CI-100 (MED-EL) is indicated for people with severe to profound deafness who derive limited benefit from conventional acoustic amplification in the best-aided condition. It is recommended that individuals have a trial of acoustic hearing aids unless this is contraindicated. The current list price of the Pulsar CI-100 cochlear implant system is £17,375 and the price paid by the NHS is £15,600. Discounts are available from the company, but the details of the discounts were provided as commercial in confidence. 
3.6 The Digisonic SP (Neurelec) is indicated for adults and children with bilateral profound to total sensorineural hearing loss. The price paid by the NHS supply chain for the Digisonic cochlear implant system is £12,250. A 50% discount on the second implant system for bilateral implantation is currently in place with the NHS supply chain (equating to £18,375 for 2 implant systems). 
3.7 Information on discounts was also obtained from a survey of the 18 cochlear implant centres in England and Wales. Responses were received from 15 centres: 3 paediatric centres, 2 adult centres and 10 with paediatric and adult caseloads. Four of the centres that responded did not carry out any bilateral implants during this period. The results of the survey suggested variation in the discounts received by the implant centres. For sequential bilateral implantation, the discounts ranged from 0% to 40% for the second implant. For simultaneous bilateral implantation the range was 0% to 50% for the second implant.