Analysts estimate President Donald Trump's proposed 25 percent tariff on certain Chinese products and manufacturing ingredients could cost the medical device industry up to $1.5 billion each year, the New York Times reports.
Here are nine insights.
1. An estimated 12 percent of medical devices imported into the U.S. come from China, accounting for a total of $3 billion annually.
2. A growing number of medical device products and their components — in particular, complicated medical equipment such as magnetic resonance imaging scanners — are manufactured in China.
3. The fastest growth in China's medical device industry was in sales of implantable orthopedic devices, plates and screws, primarily for use in surgical procedures and sports medicine.
4. Baby boomers make up a large portion of hip and knee replacement patients and could be impacted by resulting higher prices for medical devices if the tariffs are imposed, according to the NYT.
5. American Academy of Orthopaedic Surgeons President David Halsey told the NYT the organization is evaluating the possible effects of the tariff. "The impact of this orthopedic device tariff isn't a straight line," Mr. Halsey said.
6. Medtronic and Zimmer Biomet, along with several other medical device companies, have orthopedic device factories in China that export to the U.S. Medtronic shares dipped 2.7 the week of President Trump's announcement; Zimmer Biomet's were down 2.4 percent.
7. The Chinese products and ingredients targeted in the proposed percent tariff include ones that are in short supply, such as epinephrine, lidocaine and insulin.
However, three major insulin sellers in the U.S. — Eli Lilly, Sanofi and Novo Nordisk — said they didn't import insulin from China, aside from one rarely used insulin product from Novo.
8. President Trump's proposed list of products to be tariffed is an early draft. Organizations have until May to lobby the government about what's included.
9. Groups have differing perspectives on how the tariff will impact the industry.
Erin Fox, a drug shortage expert at Salt Lake City-based University of Utah, said the tariffs could worsen supply shortages. However, it's difficult to determine the impact of the proposed tariffs because many companies don't disclose where they obtain the raw ingredients for generic injectable drugs.
Jeffrey Francer, senior vice president and general counsel at the Association for Accessible Medicines, expressed concern about the possibility of tariffs increasing manufacturing costs for generics and biosimilars, which could in turn increase prescription drug prices for patients. The trade organization represents generic-drug companies.