Medtech giants move fast to blunt tariff impact without raising prices

Editor's Note

Medtech companies are scrambling to contain the financial damage from rising tariffs without passing costs onto hospitals, according to a May 2 report in Modern Healthcare. Executives from industry leaders including Johnson & Johnson, GE HealthCare, and Intuitive Surgical outlined mitigation efforts during recent earnings calls, with most citing price hikes as a last resort.

As detailed in the article, all major firms have reduced 2025 profit forecasts in light of new and ongoing tariffs. To name just a few examples, Johnson & Johnson anticipates a $400 million hit; GE HealthCare expects $310 million; and Boston Scientific, $200 million.   

To reduce their exposure, companies are rapidly shifting global manufacturing operations, the outlet reports. For example, Intuitive Surgical plans to open new plants in Germany, Bulgaria, and Mexico. Fresh from the launch of two facilities in California and one in Georgia, Intuitive is also among several companies expanding US manufacturing. Others include Boston Scientific, which has added a Georgia site and plans to grow its Minnesota footprint, and Cardinal Health, which is boosting US output of syringes and incontinence products. Johnson & Johnson announced a $55 billion U.S. investment across four years, including four new factories.

Cost-cutting is another tactic, Modern Healthcare reports. Boston Scientific plans to offset half its tariff burden by slashing discretionary spending such as travel and meetings. Some companies—including Cardinal Health, Baxter, and Intuitive Surgical—are also pre-stocking inventory to buffer against supply disruptions, though Abbott's CEO noted this is only a short-term fix.

According to the article, raising prices remains a last resort. J&J’s CFO Joseph Wolk said existing contracts and pharmaceutical regulations limit price flexibility. Cardinal Health’s Jason Hollar said the company is already working with customers on alternative mitigation strategies to avoid price hikes and has sidestepped “several hundred million dollars” in exposure so far. Read the full report for additional detail and context.