Abbott’s CEO explains what tariffs mean for the company and its patients.
Transcript:
CAROLINE WOODS: So while you’re working on all of that, you’re also having to plan for and account for tariffs that have been looming. I know you’ve said that they’re not going to have as much of an impact as you once feared, but still could cost what, hundreds of millions of dollars. does that ultimately mean patients are going to have to spend more?
ROBERT FORD: Well, in the majority of our business, we’re not selling that product to the patient directly. We’re selling to health systems. But we’re aware of the challenges that the health systems are going through right now. So we’re doing what we can to be able to have a real lower impact on that. And one of the things that for decades Abbott has done is it’s aligned its manufacturing footprint with its sales. So the majority of the United States revenue that we have in the United States is supported by US manufacturing, and the majority of the international sales are supported by international manufacturing sites. So that way we can mitigate the impact. Right now for us, it’s just under $200 million. And we have a whole team that’s working, because one thing we know is that the tariffs won’t go away. We know that once they’re put in place, it’s very difficult for a government to just go out and take them off. So so we have to think long term. How do we do this. And part of it is making manufacturing investments to be able to mitigate that. So how much of that was a result of the tariffs and how much of it was already your business plan was already. I inherited that philosophy from my predecessors, who really looked at strategy of matching your revenue with your cost structures. And for us as an international company, what that does is it limits the impact or mitigates the impact of foreign exchange when you do that. So that was the driver of that. And obviously now it’s having benefits for us when it comes to tariffs.
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