Medtech, pharma tariffs loom over healthcare industry

It was a busy week in tariff news.

First, on Sept. 24, the US Commerce Department shared that it had opened two new national security investigations, also known as Section 232 investigations, into personal protective equipment (PPE) and medical items as well as robotics and industrial machinery imports.

These investigations are a signal of possible tariffs on these products, as they ask companies to report how devices and their parts can, among other things, “meet domestic demand.” The probe began on Sept. 2 but wasn’t reported publicly until last week.

Then the next day, the Trump administration announced in a Truth Social post 100% tariffs would be coming for certain imported drugs unless parent companies have started building a facility on US soil by Oct. 1. That’s after months of back and forth and uncertainty around whether pharmaceutical tariffs were coming and what they would look like. (In August, President Donald Trump said they could reach 250%.)

As of publication, there are no specific tariffs on medtech or pharmaceuticals, though there are 57.6% tariffs in place on goods from China and 20.8% for the rest of the world. Professional supply chain organization the Association for Health Care Resource and Materials Management reported these tariffs could increase hospital expenses “by at least 15%.”

“At the end of the day, tariffs are essentially a tax on fragility. Without smart exemptions and faster investment in domestic capacity, we risk raising today’s prices without actually protecting tomorrow’s supply,” Pankit Bhalodia, partner at consultancy West Monroe, told us in an emailed statement.

Medical devices. Mergers and acquisitions (M&A) in the medtech industry have been down so far this year, according to investment firm PMCF, which found there were 104 transactions in Q2 2025, compared to 128 in Q2 the year prior.

Managing director at PMCF Bryan Hughes told Healthcare Brew this can be connected to tariff-related market “uncertainty.”

“The tariffs have obviously been all over the place, and what we’ve seen is it’s really paused a lot of discussions around potential M&A activity, as well as other investments,” he said.

While Hughes said he’s watching to see how the Section 232 affects the market, he thinks activity will still remain slow amid the uncertainty. Otherwise, he’s keeping an eye on products like gloves, masks, and gauze, which are mostly imported.

“I don’t think anyone knows what’s going to happen with tariffs,” he said, but there’s “much less room to absorb some of that cost pressure” from PPE used every day compared to medical devices.

Pharma. These incoming pharmaceutical tariffs could impact $229 billion in drug imports to the US, the Bloomberg Law reported.

Big biotech companies like Johnson & Johnson, Eli Lilly, and GSK are dealing with tariffs by announcing new investments in US manufacturing facilities. Pfizer also announced a deal with the Trump administration on Sept. 30 to offer discounted drugs in exchange for waived tariffs for three years, so long as the pharma company continues to manufacture in the US.

But Bhalodia said reshoring a facility is a long process. Getting FDA validation for a new drug facility can be “multiyear efforts,” and the benefits “won’t be immediate,” he said.

Bhalodia expects prices for branded medicines will be impacted by tariffs but not as much as generic drugs, which he said will be hit harder. He predicts more market consolidation and M&A as a result.

“Any incremental tariff [for generics] could have a very immediate effect. There’s not enough margin to absorb that kind of shock,” he said.

Otherwise, Bhalodia said he thinks tariffs will drive technology adoption due to the “labor premium” from onshoring.

But, he added, pharmaceuticals “cannot afford to sit back.”

“They should be mapping where tariffs will hit, pressing suppliers to share in the cost burden, building 60 to 90 days of safety stock, and filing for exemptions where possible,” he said.