American cardiovascular device market faces potential peril due to tariffs, asserted GlobalData
The impact of US tariffs on cardiovascular device manufacturers is significant, with both challenges and opportunities emerging in the industry. According to David Beauchamp, Medical Analyst at GlobalData, tariffs could cause increases in material costs and disrupt long-standing supply chains.
Cardiovascular devices, which cover equipment for structural heart conditions, cardiac rhythm management, and both arterial and peripheral vascular interventions, are particularly vulnerable to tariff impacts due to their reliance on parts from multiple countries. Key companies operating within the cardiovascular device market include Medtronic, Abbott, Boston Scientific, Edwards Lifesciences, and W. L. Gore.
Currently, tariffs are raising production costs for medical devices, including cardiovascular devices, due to tariffs on essential materials like steel, aluminum, and copper. This can lead to higher costs for healthcare systems and consumers. Additionally, tariffs can disrupt supply chains by imposing additional costs and uncertainties, affecting the medical device industry's reliance on international sourcing.
Larger firms are adapting by diversifying sourcing or reshoring manufacturing to reduce reliance on imported goods. However, smaller companies might struggle more due to limited resources. Major manufacturers are primarily concerned about supply chain interruptions and cost increases.
Despite these challenges, the industry is expected to grow, driven by innovation and strategic mitigation efforts. Companies are planning to mitigate tariff effects through strategies like reshoring or diversifying supply chains. For instance, Abbott plans to open a new factory in Georgia to bypass tariffs. Despite the challenges it faces, Abbott expects sales growth of 6% to 7%.
The industry's focus on innovation, particularly in digital health and advanced diagnostics, is expected to drive growth and offset some of the tariff impacts. The US cardiovascular device market is estimated to be worth approximately 34.5 billion USD, growing at a CAGR of 6.4% from 2024 to 2034. However, the impact of tariffs on these companies could lead to decreased sales and growth in the US.
Without a more concrete and stable policy on tariffs from the current American administration, most manufacturers may be forced to continuously change their internal forecasts and production plans. It is unlikely that the US can become self-sufficient in producing all components required for advanced cardiovascular medical devices.
Interestingly, Australia is eyed for potential medtech leadership with a bold investment drive, according to GlobalData. The largest markets within the cardiovascular space include pacemakers, transcatheter heart valves, electrophysiology catheters, and stents.
In conclusion, US tariffs pose significant challenges for cardiovascular device manufacturers, but larger companies are adapting effectively. Smaller companies may face more difficulties due to limited resources. Despite these challenges, the industry is expected to grow, driven by innovation and strategic mitigation efforts. However, without a stable tariff policy, manufacturers may continue to face uncertainty and market disruptions.
- Medical device manufacturers, such as those in the cardiovascular sector, are experiencing increased production costs due to tariffs on essential materials like steel, aluminum, and copper, which, in turn, could lead to higher costs for healthcare systems and consumers.
- The medical-conditions sector, particularly cardiovascular health, relies heavily on parts sourced from multiple countries, making cardiovascular devices particularly vulnerable to tariff impacts. Key companies in this market, like Medtronic, Abbott, and Boston Scientific, are addressing these tariff challenges through strategies like reshoring or diversifying supply chains.
- Financial implications for the medical device industry, including the cardiovascular sector, extend beyond increased production costs. Tariffs can also disrupt supply chains by imposing additional costs and uncertainties, potentially affecting the industry's reliance on international sourcing.
- In the cardiovascular device market, some countries, like Australia, are presenting opportunities for industry growth, particularly through strategic investments in medical plastics and medical devices, as predicted by GlobalData. However, tariff policies remain a significant concern, causing uncertainty in the industry's future growth and development.
