Medical device group asks for exemption from tariffs

Medical device group wants tariff exemption: ©Caroline - stock.adobe.com

AdvaMed, the Medtech Association, released a statement from President and CEO Scott Whitaker outlining the risks tariffs pose on medical device products coming from China. He also expressed concern about tariffs on products from Canada and Mexico, but the Trump Administration has since paused the implementation of those tariffs for now.

The statement reads in part: “We have shared with the administration our concerns about the potential impact tariffs could have on the medical technology supply chain that American patients depend on for their care. In light of that risk, an exemption was provided for most medical devices during President Trump’s first term with respect to the tariffs on China, and we are advocating for a similar approach this time. We will closely monitor for any effects the tariffs may have on this critical supply chain and share that information with the administration.”

Whitaker pointed out that the industry is heavily regulated, with the FDA deciding what products can be put on the market, and then Medicaid, Medicare, and the VA largely determining the reimbursement for procedures using medtech products.

“This means tariffs impact American companies similarly to an excise tax, which would lead to less R&D/innovation, layoffs, higher prices for the above-mentioned payors and patients, or all of the above,” Whitaker said. “Additionally, moving manufacturing from one facility to a different or new facility requires FDA approval, which makes it difficult in the short term to adjust production to the U.S.”

He said the increased costs posed by tariffs, and their functioning essentially as an excise tax in practice, could resurrect the climate of concern the medical device excise tax created for nearly a decade.

Whitaker continued: “During the President’s first term with respect to the tariffs on China, a carve-out was provided for much of the medtech sector, given the risks to the U.S. hospital supply chain. We maintain that the potential supply chain disruption and its downstream effects on patients remain a risk, should tariffs be implemented. Shortages of critical medical technologies are a real concern in our initial modeling.

“Tariffs could hold back the innovation potential of the U.S. medtech industry. R&D spending would likely be the first and most direct casualty, threatening America’s medtech innovation leadership. And increased tariffs may even have the unintended consequence of boosting the competitiveness of medtech industries of other nations.

“We hope that these critical facts resonate with the Administration, and we will continue to make our case on behalf of the patients our companies serve.”