Makers of a wide variety of medical products will feel the pain of tariffs imposed Tuesday by the Trump administration, and they are likely to pass those higher costs along to hospitals and other providers.
The tariffs include 25% on imports from Canada and Mexico and an additional 10% tariff on imports from China. That follows two other tariffs imposed on Chinese goods, a 10% one last month and one in September that varied in scope.
Related: Cardinal Health CEO Jason Hollar issues warning on tariffs
The Trump administration also is threatening a 25% tariff on goods imported from the European Union.
Trade groups including Advanced Medical Technology Association and the American Hospital Association have advocated for exemptions and urged the administration to consider the potential impact on patient care.
Premier, which operates a group purchasing organization that works with about 4,350 U.S. hospitals and 300,000 other healthcare providers, does not think a full exemption for medical devices is realistic, said Soumi Saha, the company's head of government affairs.
Here is what to know about the latest round of tariffs.
What healthcare products are most affected?
The U.S. sources blood pressure cuffs, stethoscope covers, sterile drapes, anesthesia instruments, cautery pencils, needles, syringes and pulse oximeters from China, according to the AHA.
China was the leading supplier of N95 masks and other respirators for healthcare in 2023 and provided approximately 33% of disposable face masks, 67% of non-disposable face masks and 94% of plastic gloves used in clinical settings, according to the AdvaMed.
Enteral feeding syringes, which are used to feed neonates and other children who have eating disorders, are made in China, Saha said. The Biden administration granted that product an exemption from the tariffs.
“One of the challenges that we historically talk about is that there isn't a lot of transparency and visibility in the healthcare supply chain regarding where products are coming from or where componentry is coming from,” Saha said.
When will prices increase?
It depends on when group purchasing contracts expire. Premier has contracts that last anywhere from one year to 36 months and provide protections against tax increases, spikes in pricing and tariffs. When each contract expires, it would need to be renegotiated.
What medtech companies are most affected?
About half of Cardinal Health’s branded products come from North America, split between the U.S. and Mexico. CEO Jason Hollar said in late January that if the tariffs are in the 10% to 25% range, the company expects to raise prices.
He said the company will work to reduce the impact of the price hikes, but with margins of 1% to 2%, it won’t be able to absorb the full cost.
A significant amount of Intuitive Surgical’s instruments are manufactured in Mexico, Jamie Samath, executive vice president, chief financial officer and enterprise technology leader, said in late January.
At the time, the company had not decided on pricing, but Samath said it was “balancing the needs of our customers and their objectives with the needs of our own business.”
Both companies did not respond to requests for comment Tuesday.
Aeroflow Health, which sells women's health products like breast pumps, sources 32% to 40% of its products from China.
Casey Hite, CEO and co-founder of Aeroflow Health, said that in the short term, prices will remain the same because the company has pre-negotiated rates with health insurance partners, but that will change once those contracts expire.
What companies are not as affected?
Philips Healthcare, GE HealthCare and Siemens Healthineers, which are all major manufacturers of diagnostic imaging equipment, have said they do not expect to be significantly affected by the tariffs.
Philips Healthcare has some suppliers in Mexico and Canada, but no direct manufacturing in those countries. The company has significantly reduced its imports from China.
GE HealthCare, Siemens Healthineers, Boston Scientific and Stryker have said they expect minimal impact.
Medtronic, Medline Industries, Johnson & Johnson and Baxter have not publicly commented on the effect the tariffs will have on them.
Is there any way to mitigate the effect of tariffs?
Locating more manufacturing in the U.S. would help, and some companies, including Becton Dickinson and GE HealthCare, have made those investments.
But that strategy comes with its own challenges, like higher labor costs.
Cardinal Health could manufacture half its branded products in the U.S., but Hollar said it wouldn’t make sense to do so because the domestic manufacturing costs would be higher than the financial hit of the tariffs.
