Boston Scientific remains optimistic about 2025, regardless of a projected $200 million tariff impact
In the face of ongoing economic challenges and the impact of tariff policies, medtech companies are demonstrating resilience and adaptability. Boston Scientific, one such company, is expected to maintain a double-digit sales increase in China, despite the tariff-induced financial pressures.
Boston Scientific's CEO, Mike Mahoney, has forecasted an approximate $200 million impact this year due to tariff policies, with the majority of this impact expected to occur in the second half of the year. However, the company does not plan major manufacturing changes to navigate global tariffs. Instead, it is focusing on strategic measures to offset these impacts.
One such strategy is localization and reshoring, where companies are accelerating efforts to produce domestically and in friendly jurisdictions. Boston Scientific has made manufacturing investments in Malaysia, and other companies like Pfizer and Lonza are expanding domestic manufacturing to reduce exposure to tariffs.
Another strategy is dual-sourcing and redundancy, which involves sourcing components from multiple geographies to mitigate risks associated with any single trade partner. Companies are also leveraging AI to optimise risk-cost trade-offs and manage supply chains under tariff volatility.
Ensuring regulatory compliance is also crucial, as companies must stay updated on legal changes and adapt their supply chains accordingly to avoid additional risks. Cost management and supply chain diversification are other key considerations for medtech companies navigating tariff challenges.
Despite the tariff pressures, both Boston Scientific and Johnson & Johnson have maintained their guidance for the year. Boston Scientific raised its 2025 guidance from a growth range of 12.5%-14.5% to 15%-17%, following a strong first-quarter performance. The company reported a revenue of $4.66 billion, representing a year-over-year growth of nearly 21%.
Boston Scientific's success in the PFA market, particularly with the Farapulse pulsed field ablation device, is likely to continue due to its newness. This device drove triple-digit sales growth for the electrophysiology unit. The company's manufacturing footprint is also planned for long-term growth, with recent expansions in Georgia and Minnesota.
In summary, medtech companies are responding to tariffs by localizing production, diversifying supply chains, and leveraging technology to manage risks and costs. These strategies aim to mitigate the financial impact of tariffs while maintaining operational efficiency. Despite the challenges, companies like Boston Scientific and Johnson & Johnson are demonstrating resilience and optimism for the future.
- In the current economic climate, medtech companies, such as Boston Scientific and Johnson & Johnson, are showcasing resilience in the face of tariff policies and their financial repercussions.
- Boston Scientific's CEO, Mike Mahoney, predicts an approximate $200 million impact from tariffs this year, with majority of the impact expected in the second half.
- To navigate global tariffs, Boston Scientific is focusing on strategic measures like localization and reshoring, investing in manufacturing in Malaysia, and dual-sourcing components from multiple geographies.
- AI is being leveraged by medtech companies to optimize risk-cost trade-offs and manage supply chains under tariff volatility, ensuring regulatory compliance being another crucial consideration.
- Both Boston Scientific and Johnson & Johnson have maintained their yearly guidance despite tariff pressures, with Boston Scientific raising its 2025 guidance following a strong first-quarter performance.
- The success of Boston Scientific, particularly in the PFA market with the Farapulse pulsed field ablation device, is attributed to its newness and its triple-digit sales growth for the electrophysiology unit.
- Medtech companies are aiming to maintain operational efficiency while mitigating the financial impact of tariffs through local production, supply chain diversification, and technological advancements, thus demonstrating resilience and optimism for the future.
