Those costs were 10 times higher than in 2024, according to the study, published in the National Tax Journal.

To 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's worth of medical imports. They calculated that under those peak August rates, annual government-assessed duties would skyrocket to $15.8 billion — nearly 30 times higher than historical baselines — resulting in an estimated $8.1 billion in ultimate passed-through costs to the healthcare system.

“The results have nontrivial implications for impacts of tariffs on the fiscal sustainability of health care in the United States,” the authors wrote. “Although 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 – incurred by manufacturers, distributors, providers, insurers, and patients.”

The 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.

Those 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.

While 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.

The 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.

 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.

More 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.

“If 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,” the authors wrote.

The study was conducted by Kang and UCD coauthors Xiangtao Meng, Katheryn N. Russ, and James Waters. The paper, “Tariffs on Medical Goods: Pass-Through, Geography, and Aggregate Costs to the US Health-Care System,” was first published online on Feb. 27, 2026 in the National Tax Journal. It is available at https://doi.org/10.1086/739621.