Healthcare unlikely to be hit hard by increased tariffs
May 23, 2019 (China Knowledge) - China’s latest retaliatory tariffs on US imports will have little impacts on the cost of medical treatment as medical products affected by the tariff hike mostly have domestic alternatives.
According to the Tariff Policy Committee of the State Council, most of the pharmaceutical products on its tariff list are active pharmaceutical ingredients rather than the finish product and widely used pharmaceuticals will see limited impact on prices.
For example, insulin which is in high demand in China only has one major exporter based in the US. The company, Eli Lily and Co., currently commands a 10% to 15% market share, meaning that the increased tariff will only have a minor impact. In addition, other widely used protein hormones are already dominated by domestic companies meaning import taxes will have little impact.
Generic drugs hit by the tariff list mostly already have domestic alternatives while mid and low-end medical equipment and consumables such as syringes can easily be replaced by alternatives.
High-end equipment such as ultrasound and MRI machines will be subject to an additional 5% tariff but hospitals are usually not as price-sensitive when purchasing such big-ticket items.
Both China and US are remaining cautious when choosing to impose tariffs on medical products, seeming to mostly target products that already have alternatives available.
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