The Trump administration announced sweeping tariffs on most US trading partners, including a 125 per cent tariff on China, 31 per cent on Switzerland and 20 per cent on the European Union

Although a 90-day pause was later granted on certain tariffs, a 10 per cent baseline tariff remains in effect. According to a recent GlobalData report, these tariffs are expected to impact all 510(k)-approved medical devices manufactured outside the US (OUS). Companies with OUS manufacturing operations will face increased costs, while those manufacturing exclusively in the US will remain unaffected.

To stay competitive, in vitro diagnostic (IVD) manufacturers may need to absorb these additional costs or shift production to the US, notes GlobalData.

Expert Analyst at GlobalData, explains that many IVD test kits have different components like primers, DNA probes, quality control reagents, tubes and cartridges, that may be manufactured in other facilities in the US or OUS. Therefore, to remain competitive in the US market, IVD companies need to offset increased costs from tariffs. IVD companies that manufacture most of their tests in the US have an opportunity to increase their market share, as their products will remain unaffected by the tariffs.

He further points out that the ultimate aim is to enhance patient care and outcomes. However, shifting manufacturing locations or cutting costs to counter-tariffs could risk a decline in product quality, a concern highlighted in the GlobalData report.

For instance, based on GlobalData’s Sexual Health Tests SKU Tracker, Roche’s Cobas CT/NG test and Hologic’s Aptima Combo 2 assay dominate the US chlamydia and gonorrhoea dual test market, with 44.3 per cent and 42.4 per cent of sales volume respectively. According to GlobalData’s MedSource Database, the Aptima test is exclusively manufactured in the US, making it more “tariff-proof,” whereas the Cobas test is partially manufactured OUS and thus more vulnerable to cost increases.

He also adds: “Hospitals and manufacturers have several strategies to navigate this shift. Some may lean toward US-manufactured tests, driven by public preference for 'American-made' products. Others may continue using familiar products, absorbing higher costs.”

Interestingly, despite potential price hikes, Roche’s Cobas test, with an average selling price (ASP) of $3.41, remains competitively priced compared to Hologic’s Aptima assay at $9.32. Another major player, Cepheid’s XPERT CT/NG, with an ASP of $16.25 and partial OUS manufacturing, may be more at risk of losing US market share due to tariff pressures.

The broader concern remains whether tariffs will limit access to high-quality, affordable testing. New OUS-manufactured IVD innovations might also face barriers to entering the US market due to increased costs and logistical challenges.

He concludes by mentioning that the desire and necessity for a healthy population is a universal priority shared across the globe. Tariffs on diagnostic, screening, and monitoring tests can lead to patients not accessing care quickly enough if existing tests become scarce, unavailable, or too expensive in the US.