Mexico border tax could lead to medical device shortages: 4 things to know

President Donald Trump's proposal to transform trade deals and impose high border taxes on Mexican imports could pose a large threat to the American medical device industry, reports Kaiser Health News.

Here are four things to know.

1. Mexican workers produce millions of medical devices each day for many large American-run companies like Medtronic and Greatbatch Medical. The U.S. imports nearly one-third of its medical devices and supplies from foreign countries annually, according to the report. From 2001 to 2016, the amount of annual device imports more than tripled to $43.9 billion, according to BMI Research data cited by KHN.

2. While President Trump hopes to stimulate more manufacturing in America — often challenging the automobile and drug industry to bring back operations to the U.S. — device manufacturing would be much harder to uproot due to strict Food and Drug Regulations on device production and safety, notes KHN.

3. As a result, new import taxes would likely drive up the cost of medical devices for hospitals and cause potential shortages, according to the report.

"The real danger is the supplies won’t be available at all," said John Jay Shannon, MD, CEO of the Cook County Health and Hospitals System in Chicago.

4. While many healthcare executives worry about the financial implications import tax will have on medical devices and the healthcare system as a whole, Premier COO Mike Alkire believes prices would spike before eventually flattening out.

"We've got enough diversity in the way we source products, [so] we think we can manage the costs," Mr. Alkire told KHN. "Over the long term, we do think the market will stabilize and the most efficient place to produce products will occur."

More articles on supply chain:

Setting lower list prices — a first for pharma?
Swiss hospitals to transport lab samples via drone
Mylan expands EpiPen recall to US

Copyright © 2023 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars