{"690624":{"#nid":"690624","#data":{"type":"news","title":"School of Economics Study Digs Into Pass-Through Costs of US Healthcare Tariffs","body":[{"value":"\u003Cp\u003ETariffs imposed by the U.S. federal government in 2025 on imported medical supplies amounted to $3.4 billion in the first six months of the year, with nearly 56% of that cost passed on to medical facilities, providers, and potentially consumers in the form of higher prices, according to recent research from Georgia Tech\u2019s \u003Ca href=\u0022https:\/\/econ.gatech.edu\u0022\u003ESchool of Economics\u003C\/a\u003E and the University of California, Davis.\u003C\/p\u003E\u003Cp\u003EThose costs were 10 times higher than in 2024, according to the \u003Ca href=\u0022https:\/\/www.journals.uchicago.edu\/doi\/full\/10.1086\/739621\u0022\u003Estudy\u003C\/a\u003E, published in the \u003Cem\u003ENational Tax Journal.\u003C\/em\u003E\u003C\/p\u003E\u003Cp\u003ETo project the full-year impact of even steeper tariff hikes enacted later in 2025, the researchers used 2024 as a baseline for a typical year\u0027s worth of medical imports. They calculated that under those peak August rates, annual government-assessed duties would skyrocket to $15.8 billion \u2014 nearly 30 times higher than historical baselines \u2014 resulting in an estimated $8.1 billion in ultimate passed-through costs to the healthcare system.\u003C\/p\u003E\u003Cp\u003E\u201cThe results have nontrivial implications for impacts of tariffs on the fiscal sustainability of health care in the United States,\u201d the authors wrote. \u201cAlthough the amount of duties collected and passed through the border may seem small in the context of large aggregate U.S. spending on healthcare, increased costs land somewhere in the medical supply chain \u2013 incurred by manufacturers, distributors, providers, insurers, and patients.\u201d\u003C\/p\u003E\u003Cp\u003EThe tariffs, first imposed in February 2025, were the first by the Trump administration to include medical supplies and equipment, which traditionally have been excluded from significant tariffs.\u003C\/p\u003E\u003Cp\u003EThose tariffs were later struck down by the U.S. Supreme Court and replaced by a 10% global tariff that was later, itself, reversed by the U.S. Court of International Trade.\u003C\/p\u003E\u003Cp\u003EWhile the study is not the first to calculate the pass-through cost of tariffs to the healthcare sector, the authors say it is the first to build a fully comprehensive database tracking the historical changes, temporary exemptions, and other details of medical tariffs since 2017.\u003C\/p\u003E\u003Cp\u003EThe researchers were also the first to use more granular customs codes to separate the pass-through effects across different categories of medical goods, revealing that final branded products and packaged medications bore a much higher pass-through rate than raw active pharmaceutical ingredients.\u003C\/p\u003E\u003Cp\u003E\u0026nbsp;Those revelations suggest that overseas market power and how buyers react to price changes play major roles in keeping pass-through rates high, the researchers said.\u003C\/p\u003E\u003Cp\u003EMore than 40% of pharmaceuticals in dosage form and more than a third of medical devices come from suppliers in four countries, most of which faced substantial tariffs. Such geographic concentration makes it extremely difficult for the healthcare industry to quickly shift sourcing or avoid these tariff costs, the researchers said.\u003C\/p\u003E\u003Cp\u003E\u201cIf production of branded dosage forms and certain types of medical devices tends to be dominated by monopolies or oligopolies with facilities located overseas, these companies could pass the bulk of the cost of the tariff to US importers in response to tariff hikes without fear of losing substantial market share as long as it is difficult for new firms to enter the market,\u201d the authors wrote.\u003C\/p\u003E\u003Cp\u003EThe study was conducted by Kang and UCD coauthors Xiangtao Meng, Katheryn N. Russ, and James Waters. The paper, \u201cTariffs on Medical Goods: Pass-Through, Geography, and Aggregate Costs to the US Health-Care System,\u201d was first published online on Feb. 27, 2026 in the \u003Cem\u003ENational Tax Journal.\u0026nbsp;\u003C\/em\u003EIt is available at \u003Ca href=\u0022https:\/\/doi.org\/10.1086\/739621\u0022\u003Ehttps:\/\/doi.org\/10.1086\/739621\u003C\/a\u003E.\u003C\/p\u003E","summary":"","format":"limited_html"}],"field_subtitle":"","field_summary":[{"value":"\u003Cp\u003EA recent study co-authored by a Georgia Tech economist finds many tariff costs were passed through to healthcare buyers.\u003C\/p\u003E","format":"limited_html"}],"field_summary_sentence":[{"value":"A recent study co-authored by a Georgia Tech economist finds many tariff costs were passed through to healthcare buyers"}],"uid":"34600","created_gmt":"2026-06-03 18:16:27","changed_gmt":"2026-06-03 18:21:48","author":"mpearson34","boilerplate_text":"","field_publication":"","field_article_url":"","location":"Atlanta, GA","dateline":{"date":"2026-06-03T00:00:00-04:00","iso_date":"2026-06-03T00:00:00-04:00","tz":"America\/New_York"},"extras":[],"hg_media":{"680413":{"id":"680413","type":"image","title":"manho-kang-169.jpg","body":"\u003Cp\u003EAssistant Professor Manho Kang\u003C\/p\u003E\u003Cp\u003E\u0026nbsp;\u003C\/p\u003E","created":"1780510639","gmt_created":"2026-06-03 18:17:19","changed":"1780510665","gmt_changed":"2026-06-03 18:17:45","alt":"\u0022\u0022","file":{"fid":"264670","name":"manho-kang-169.jpg","image_path":"\/sites\/default\/files\/2026\/06\/03\/manho-kang-169.jpg","image_full_path":"http:\/\/hg.gatech.edu\/\/sites\/default\/files\/2026\/06\/03\/manho-kang-169.jpg","mime":"image\/jpeg","size":316980,"path_740":"http:\/\/hg.gatech.edu\/sites\/default\/files\/styles\/740xx_scale\/public\/2026\/06\/03\/manho-kang-169.jpg?itok=dYJIZmR3"}}},"media_ids":["680413"],"groups":[{"id":"1281","name":"Ivan Allen College of Liberal Arts"},{"id":"1282","name":"School of Economics"}],"categories":[],"keywords":[],"core_research_areas":[],"news_room_topics":[],"event_categories":[],"invited_audience":[],"affiliations":[],"classification":[],"areas_of_expertise":[],"news_and_recent_appearances":[],"phone":[],"contact":[{"value":"\u003Cp\u003E\u003Ca href=\u0022mailto:michael.pearson@iac.gatech.edu\u0022\u003EMichael Pearson\u003C\/a\u003E\u003Cbr\u003EIvan Allen College of Liberal Arts\u003C\/p\u003E","format":"limited_html"}],"email":["michael.pearson@iac.gatech.edu"],"slides":[],"orientation":[],"userdata":""}}}