The hospital lobby is petitioning President Donald Trump to grant carve-outs for medical devices and pharmaceutical products to the tariffs his administration has enacted, or may soon enact, on Mexico, Canada and China.
In a letter sent Tuesday, the American Hospital Association (AHA) told the president that the country’s hospitals “stand with you” on the tariffs’ stated goals of curbing the entry of fentanyl and other addictive drugs from these countries.
“We commend your focus on this issue in the first few days of your second term,” AHA President and CEO Richard Pollack wrote to Trump. “We are, however, concerned that the approach of using tariffs may inadvertently put others’ lives at risk by jeopardizing the availability of vital medications and essential healthcare devices.”
U.S. tariffs on numerous drugs and devices imported from other countries, as well as any reactionary duties enacted by those countries, could curtail product availability for U.S. providers, according to the letter that stressed “even a temporary disruption” in patients’ access could be life-threatening.
Canada and Mexico were on the verge of a 25% tariff that was postponed by at least a month hours before they were set to go into effect.
Though potential trade actions against those countries were cited in the letter, much of the AHA’s concern was focused on China, against which an additional 10% tariff was placed on imports earlier this week.
The country is a source for numerous purchased pharmaceuticals as well as the raw ingredients that U.S. pharmaceutical manufacturers rely on to produce their drugs. Almost 30% of those ingredients (known as active pharmaceutical ingredients) are purchased from China, the AHA wrote, citing a 2023 report.
Medical devices and supplies that are “ubiquitous” in healthcare are also a point of concern for hospitals, the AHA continued. Chief among these are products that protect healthcare workers and patients from infection—China produced “the majority of N95 and other respirators used in healthcare” as well as one-third of disposable face masks, two-thirds of non-disposable face masks and 94% of plastic gloves used in care, the lobby wrote.
“The lack of this essential equipment will not only put patients at risk but also threaten our health care delivery personnel,” the AHA wrote.
The AHA’s apprehension is shared by those working in healthcare supply chain, pharma, medical equipment manufacturing and distribution.
A survey released earlier this week of 200 such professionals had 164 predicting a 15% cost surge for hospitals and health systems in the coming six months. About two-thirds estimated at least a 10% rise in pharmaceutical costs. Most provider respondents also said they would need to shift increased costs onto insurers and patients.
Jason Hollar, CEO of healthcare product manufacturer and distributor Cardinal Health, told investors during a Jan. 30 earnings call to “make no mistake. If there are widespread tariffs, anywhere from the 10% to 25% range, I anticipate there will be corresponding price increases.”
A week earlier, Sam Hazen, CEO of HCA Healthcare, the country’s largest for-profit hospital chain, said during an earnings call that his company’s group purchasing organization has been working to mitigate such disruptions “for many years, including actions like fixed-price contracting, supply chain mapping and risk assessments and a lot of work on sourcing.”
At the time, he declined to estimate a potential impact on the company’s business without further details on the tariffs’ rates, targeted countries or potential healthcare exemptions.