Healthcare industry groups and analysts are shaking after President Donald Trump announces We will clear up Wednesday's customs policy This can affect all global supply chains, from needles and catheters to diagnostic tests and glucose sensors.
Policy adjustments include a universal baseline tariff of 10% effective April 5th, and will increase the individual tariffs for some U.S. trading partners on April 9th. Including drug tariffsThe president said Wednesday.
Import taxes are set to affect the wide range of materials needed to provide healthcare, says Kevin Holloran, senior director and sector leader of Fitch Rating's nonprofit healthcare group. The prices of medical devices, including syringes and diagnostic tools, could rise, while devices such as x-ray machines and personal protective equipment could rise.
Including medical devices in Trump's tariffs “in stark contrast to the historical patterns of life-saving and strategic exemptions for life support,” Morningstar analyst Debbie Wang wrote in a memo released Thursday.
Meanwhile, analysts at Jeffries said companies that make life science equipment and diagnostics will have a hard time finding safe shelters to move their manufacturing, given the broad nature of tariffs, adding that companies with existing Mexican or Canadian capabilities would be better given the lack of new taxes in those countries.
“If the costs of these products rise, either fixed or variable costs will rise,” Fitch's Holloran wrote in an email. “If we don't have the ability to pass these costs to the end users (because we've been contractually locked up with most payers for years), hospitals will simultaneously drop in operating profit levels without other cost reductions that have not yet been decided or other sources of income that have yet to be launched.”
Promotion of exemptions
The American Hospital Association, the largest provider lobbying group in the United States, failed I worked for the Trump administration for months It argues that many hospital supply chains cannot be easily re-wrapped, ahead of the announcement on Wednesday in its efforts to secure carvings for medical supplies. Aha said tariffs threaten the state's supply of “lifesaving drugs and supplies.”
On Thursday, the organization repeated its call for exemptions. Advamed is one of the largest trading groups in the medical device industry, one day before MedTech companies are exempt from customs duties.
The AHA shares the administration's goal of strengthening its supply chain in the country. However, Akin Demehin, Vice President of Quality and Patient Safety Policy at AHA, said the goal had to be balanced with avoiding patient care disruptions.
“We are grateful that the administration has exempts medicines from mutual tariffs. At the same time, we encourage the administration to consider exempts from medical devices,” Demehin said. “It is especially important to have exceptions to medical products that are already lacking, with country production supplying a critical portion of the US market as tariffs rise.”
Renton, based in Providence, Washington, said tariffs could cost the health system between $10 million and $25 million a year. CEO Erik Wexler urged the Trump administration to consider pleas for Aha's exemption, pointing out that the healthcare supply chain is “vulnerable.”
“It's difficult to make critical decisions when you feel that every day can be different, as most of these continue to remove uncharacteristic waters about their impact and implications on tariffs.”
Mary Mayhew
President and CEO of Florida Hospital Association
“I saw this during the pandemic maskventilator Other products It was dangerously shortage. Recently, the destruction of the Baxter facility during the Hurricane last year has resulted in a significant shortage of critical IV fluids,” Wexler said.
Management added that tariffs have emerged amid concerns about potential Medicaid cuts, warning that cumulative impacts could “crippling” the health system and cause a national emergency for access to care.
The resilience and diversification of supply chains has already become the best mindset for providers in recent months. Plant damage In Marion, North Carolina, Helen disrupted 60% of the country's IV solution supply during the hurricane.
But Mary Mayhew, president and CEO of the Florida Hospital Association, told Healthcare Dive that making changes to the supply chain is “non-winning.”
“Given the challenging margins of healthcare, it's not realistic for a hospital to have important inventory to maintain, and sometimes it's simply not practical because of shelf life,” Mayhew said.
She said that over the past few years, hospitals have been encouraged to purchase supplies through group purchasing organizations, which can provide efficiency through enhanced purchasing power, but can hone the health system's ability to quickly purchase new suppliers or directly from new partners.
Medical group practices also hinder the economic impact of tariffs, according to Anders Gilberg, senior vice president of government affairs at the Association for Health Group Management.
Many practices have already struggled amid recent Medicare reimbursements and multi-year post-Covid inflation, according to Gilberg. He worries about his ability to absorb further cost hiking.
“While physician practices rely on the global supply chain, there is little ability to take over the increased costs,” Gilberg said. “The potential consequences of increased tariff-induced costs can be severe, especially for medical practices that struggle to keep their doors open in already challenging medical settings.”
Still, we don't think that tariffs will have an immediate negative impact on providers. In a memo on Friday, JPMorgan analysts said providers need to provide a bit of protection from the immediate negative impact of tariffs due to fixed-price contracts. A Northwell Health spokesman, for example, told Healthcare Dive via email that its existing contract “doesn't expect Healthcare to see the effects (of the tariffs) for quite some time.”
Particularly including major provider stocks HCA Healthcare, Tenet Healthcare, Universal Health Services and Community Health Systems were all trading Friday morning within a few percentage points of the place they sat near the market on Tuesday, indicating no immediate investor panic.
Diabetes technology is vulnerable
Among medical device manufacturers, diabetes technology companies such as Dexcom, Insulet and Tandem diabetes appear to bear the brunt of the Trump administration's transnational tariffs, the King of Morningstar said. Tandems may be the most vulnerable, she said, because they rely on components and manufacturing outside the US
Diabetic device makers also face considerable competition with European companies, including Roche and YPSOMED, and mutual tariffs by Europe further hurt US-based competitors, Wang writes.
Large cardiac and orthopaedic device manufacturers such as Boston Scientific, Edwards Life Sciences and Zimmer Biomet are expected to shift production to minimize the impact of tariffs, Wang said.
Analysts at William Blair stressed that medical devices are essential to healthcare, as many people treat chronic and acute conditions. Margaret Katzor Andrew said in his report that the impact on costs in 2026 will be apparent as businesses renegotiate their purchase agreements.
According to Kaczor Andrew, device manufacturers, including Edwards and Medtronic, have begun providing details on the impact of tariffs at public conferences, most suggesting that they will have a minimal impact on revenue. She added that it is difficult to predict the long-term outlook. This was added to questions about how long the tariffs will be maintained, whether there will be exclusions, and how medical demand will be affected.
I headed to MedTech over the weekend. Businesses and providers are considering the next move in an uncertain environment.
“It's difficult to make critical decisions about these tariff impacts and consequences when every day feels different, as most of these continue to lower uncharged waters.”
