The U.S. Department of Commerce (DoC) has opened an investigation into the national security implications of trade relations for a variety of products, including medical devices. The Advanced Medical Technology Association (AdvaMed: Washington) advised the department that tariffs on medical technology would be disruptive, but also that the White House could adopt policies that would simultaneously boost competitiveness and improve patient access to cutting-edge medical technologies.
The DoC investigation under Section 232 of the Trade Expansion Act of 1962 is designed to clarify whether U.S.
competitiveness is harmed by tariffs and protectionist policies adopted by other nations. AdvaMed President/CEO Scott Whitaker said in response that the U.S. enjoys either a well-balanced medical device trade picture or a trade surplus with a number of major economies, including China, the European Union (EU) and Japan. This surplus in finished product trade is dependent, however, on a supply chain that brings in raw materials and components from a wide range of nations, most of which are located in the Europe and North America.
AdvaMed supports the Trump administration’s America First trade agenda, Whitaker stated. However, AdvaMed recommended that the White House adopt a more forward-thinking policy stance with regard to medical technologies. A Make America Healthy Again (MAHA) approach to medical technology would include an FDA policy to prioritize domestically manufactured finished devices by means of an expedited review program. This program would be supplemented by an accelerated coverage and payment program that would prioritize technologies for which the Medicare program has no corresponding benefit category.
Whitaker said the cadence of FDA inspections of foreign facilities should more closely resemble that of domestic facility inspections, a change that may require appropriations that reflect the greater cost of these inspections. Foreign inspections might also focus on manufacturing sites that ship products for which there is a conspicuously low volume of adverse event reports, while the White House could instruct the FDA to apply resources to third-party device testing laboratories located outside the U.S. This would be responsive to the FDA’s findings that some of these testing labs have filed test reports with falsified data.
The administration could build on the FDA’s activities in regulatory reliance and mutual recognition programs, such as those already in place with Switzerland and the U.K., Whitaker said. A reliance agreement with Mexico would strengthen trade ties between the two nations while the administration might also work to forge stronger trade ties with other nations in the Western Hemisphere and Southeast Asia, which would improve the FDA’s standing on the global regulatory stage.
Supply chain issues cannot be quickly or readily overcome, the AdvaMed report stated, offering the example of the maker of an implanted medical device that relies on batteries for routine operation. The project of replacing the supply chain for one of the raw materials used in the battery cost the manufacturer $10 million and required a 3.5-year program of development and re-validation of the device design to accommodate the new battery design, an episode that is emblematic of the difficulties of re-engineering supply chains for medical devices.
AdvaMed stated that U.S. exports of med tech to the EU reached $28.2 billion in 2024, a level that represented approximate trade parity. However, American device manufacturers shipped a greater dollar value of devices to most trading partners in 2024, including China, Japan and the United Kingdom.
Manufacturers are stepping up their domestic manufacturing capabilities with new plants and improvements to existing plants. AdvaMed said Johnson & Johnson Inc., of New Brunswick, N.J., announced in March that it would undertake a $55 billion investment over the next four years for both new manufacturing sites and improvements to existing sites. Convatec will invest $600 million in U.S. manufacturing and research and development activities while Abbott and Roche Diagnostics have both announced investments of at least $500 million. Whitaker said AdvaMed expects this trend to continue, “especially if med-tech sees much-needed flexibility with regard to tariffs.”
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