Rates, Rifts, & Reforms - The 2025 Tariff Playbook - Healthark

1. Rates, Rifts, & Reforms The 2025 Tariff Playbook Potential impact of US tariffs on Healthcare & Pharma Industry

2. US President Trump started implementing tariffs with the aim to reduce trade surplus and unfair trade practices with other countries Tariffs mentioned are general & are applied on Medical Devices. Pharma products are exempted Announced plans for “reciprocal tariffs” Feb. 13 Granted 1-month exemptions & postponed 25% tariffs on Mexico & Canada Paused for Mexico & Canada Feb. 03 Mar. 06 February Mar. 04 Feb. 04 20% (Doubled) Feb. 01 10% 10% Mar. 04 25% Canada Retaliated on $100 Bn+ goods China – 15% on US 25% US Impose Tariffs Retaliates Tariffs on US

3. 34% (Additional) 125% 20% Apr. 10 25% 24% 145% 32% 10% ( 125% + 20% fentanyl tariffs) Apr. 10 All Other Countries 34% Apr. 02 Apr. 04 March April Apr. 03 Apr. 16 Granted 1-month exemptions & postponed 25% tariffs on Mexico & Canada 245% Apr 09 Mar. 12 Suspended higher tariffs on all countries except China for 90 days EU - $28 Bn worth US products 125%

4. As US exempted pharma products from the current tariffs, major impact will be on Medical Device Industry SHARE OF TOTAL US IMPORTS (2023) Medical Devices Country Pharmaceutical South Korea 71% 27% China 6% 1% Japan 5% 2% Australia 4% 1.5% Singapore 4% 5% India 2% 6% Europe 1% 1%

5. Currently, tariffs are imposed only on medical devices but US has begun investigation on Pharma sector as well IMPACT ON AFFECTED COUNTRIES ($Bn Trade Impacted)* EU ($129 Bn):Rising supply from China and within may drive prices down, Increased US competition could shift industry dominance from EU to US CHINA ($5 Bn): Shifting its aggressive pharmaceutical product dumping toward African markets meanwhile API costs are expected to rise, offsetting the dumping cost advantage INDIA ($11 Bn): China’s cost advantage is narrowing, reducing its dominance, Indian manufacturers has potential to emerge as strong alternative suppliers IMPACTON United States • ~$210B in trade is projected to be impacted from US imports of $171B in pharma and $38B in medical devices • Tariffs may increase costs & worsen shortages of drugs and medical supplies in the US healthcare system • Retaliatory tariffs reduce US Medtech investor appeal, shifting manufacturing to Thailand, Malaysia, and Mexico Mexico accounts for the largest portion of US medical device imports (32%) * Total trade consists of US Imports on medical device & pharma products

6. Tariffs on Pharma & MedTech may drive costs & limit access to drugs & medical technologies INCREASE IN CONSUMER PRICE INCREASED COST OF APIs & RAW MATERIALS Cost of certain cancer therapies is expected to rise by $8,000 to $10,000 for a standard 24-week treatment, while generic drug prices may increase from 82 to 94 cents per pill, potentially raising out-of-pocket expenses for consumers Tariffs could threaten profitability of cheap generic drugs manufacturers, which already have thin profit margins. Average margins for generics have dropped from 18% in 2019 to 11% in 2024 SHORTAGE OF CRITICAL EQUIPMENT With ~70% of medical devices manufactured outside the US, tariffs are disrupting supply chains leading to financial strain on healthcare systems, particularly mid-sized & rural providers, with 1 in 5 rural hospitals delay equipment upgradations due to pricing spikes SUPPLY CHAIN DISRUPTIONS In response to growing tariff impacts, many giants are reshoring manufacturing by pledging billions to reshore their facilities in US (such as J&J & Eli Lilly) whereas some companies are expanding scenario- based planning to anticipate future disruptions (Stryker) STRAIN ON R&D INVESTMENTS US tariffs are projected to add $46 Bn in costs to the pharmaceutical industry, prompting major companies to reassess financial priorities & realign R&D budgets IMPACT ON PHARMA/ MEDTECH IMPACT ON HEALTHCARE SECTOR