September 6, 2018

Office of the United States Trade Representative
Section 301 Committee
600 17th Street NW
Washington, DC 20508

Re: Docket Number: USTR-2018-0026; Request for Comments.
 

Dear Mr. Lighthizer,

In accordance with section 304(b) of the Trade Act, I appreciate the opportunity to submit written comments in regards to the proposed action to be taken in response to the acts, policies and practices of China. More specifically, I am writing to express my concern about implementing tariffs on healthcare products and urge that the healthcare related products be removed from the proposed tariff list.

I appreciate the USTR's willingness to remove healthcare products from the first proposed tariff list (proposed on April 6, 2018 and finalized on June 15, 2018). However, I would like to make the USTR aware of some additional products that, if tariffed, would have an adverse effect on healthcare, unnecessarily increase the cost of healthcare for all Americans, and ultimately limit access to care and as life-saving medical products.

Protecting Patients and Healthcare Workers:

The list of proposed products includes many healthcare products that are critical to protecting healthcare workers and their patients. Products like gloves, isolation gowns, specimen bags, and wet wipes are used every day in virtually every patient encounter. They are used widely in care settings from hospitals to nursing homes, and throughout doctor's offices and laboratories.  These products represent a critical barrier to prevent infections in provider and patient interactions. With infection prevention prioritized as a key initiative throughout healthcare, usage of these products should be encouraged. Placing tariffs and their resulting higher prices as well as any other avoidable disruptions to the supply chain for these products should be avoided.  

Effect on Preparedness and Response to Public Health Emergencies:

Many of the products on the proposed 301 tariff list are heavily utilized during public health disasters. Tariffs on these products could lead to product shortages which would be further exacerbated during a time of crisis. Fully assessing how the proposed tariffs will affect national public health preparedness and response efforts is critical to understanding the level of industry concern on this issue. In recent years, there have been significant public/private partnerships designed to collaborate on supply chain capabilities given recent events such as Ebola and the 2017 hurricane season. The inclusion of these products in the final tariff policy would limit the ability of all levels of government with a role in public health as well as the commercial healthcare supply chain's ability to adequately support response in an emergency event.

Increase the Cost of Care:

If the proposed healthcare related products are included in the final USTR 301 list, it will increase the cost of healthcare and limit patient access to necessary products. Many of these products support routine medical procedures from annual wellness visits to life saving surgeries. Some of the products are also utilized in home care settings and are often not completely covered by insurance. Therefore, the proposed tariff policy will negatively impact American consumers and will raise the cost of delivering quality and efficient care to patients. 

The healthcare supply chain is highly efficient and often serves providers with "just in time" delivery. We have also been able to cut the cost of some products almost in half compared to their cost several years ago. These successes are due to the implementation of a lean, efficient and global strategy, which includes sourcing products from China. The U.S. Department of Commerce published a study, which depicts the percentages of non-U.S. suppliers that support medical-surgical equipment manufacturing by country - China accounted for supplying approximately 14% of the market, making it one of the top 3 countries where medical products are sourced for the United States. This percentage is significantly higher for certain products such as gloves.

While some of the products on the tariff list are also made in other countries, they are usually more expensive options and there is not enough supply to fill the gap which would arise from eliminating China as a source. The immediate result will be a spike in demand, an increase in cost and product shortages of critical supplies. Additionally, the ability of other suppliers to ramp up production may take up to one year.

Conclusion:

In conclusion, I believe that including healthcare products on the final tariff list will negatively impact the safety of healthcare providers and their patients as well as our ability to respond to a public health crisis. Tariffs on healthcare products will ultimately drive up the cost for every American. I appreciate the opportunity to share our concerns with the USTR 301 Committee and we urge you to remove all healthcare products from the proposed tariff list.

 

Sincerely,

Jeffrey Siegal
CEO
Geriatric Medical & Surgical Supply, Inc.