Medical products manufacturer B. Braun Medical Inc. is investing $1 billion to expand its U.S. production of IV products, an announcement that comes as health care providers continue to suffer from a shortage of the critical medical equipment.
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Slated to be announced at a panel discussion in Washington, D.C., on Tuesday, the German-based firm will build a facility in Daytona Beach, Florida, and modernize existing plants in California and Pennsylvania.
The investment will allow B. Braun to double its production of saline bags, which are used to more easily administer medications, and the accompanying accessories.
“When we have all these investments completed and the complete expansion in Daytona, I would hope that we would have equal capacity as our competitors,” CEO Caroll Neubauer told FOX Business. “Our commitment to the U.S. market from the U.S. market will have an increased security supply for [hospitals] looking forward.”
Already in limited quantities due to the small number of manufacturers in the country, there was a shortage of IV fluid at the start of 2018 due to Hurricane Maria devastating Puerto Rico where Baxter International Inc., one of the largest producers of the product, has a plant. A severe U.S. flu season also compounded the issue, leaving hospitals scrambling and causing some patients to delay treatments.
The confluence of events spurred B. Braun to take the new steps to support higher production capabilities, one that lawmakers touted as critical to prevent future shortages.
“B. Braun is making an important investment to address this concern by expanding production capacity and improving the ability to deliver IV fluids when and where they are needed," Se. Pat Toomey, R-Pa., said in a statement.
The investments will give B. Braun manufacturing capabilities on both the East and West Coasts and are expected to create hundreds of jobs, including an estimated 300 in the Daytona Beach region.
“Ultimately, our plan is to have a duplication of both products lines on both sides at the same time,” Neubauer said. “It will keep our long-term growth prospects in the U.S. safe, it will support that and it is good for the health care providers.”
The Food and Drug Administration, which must approve IV solutions before patient use, initially added it to the federal drug shortage list in 2014. Last year, the agency allowed companies like B. Braun to import products from their foreign plants, an approval that is now permanent, according to Neubauer.
In July, former Commissioner Scott Gottlieb also launched a new task force to investigate the reason for the shortages. In a statement at the time, he raised the potential that manufacturers could be given “additional financial invectives” to encourage increased production.
The Department of Justice previously investigated potential antitrust violations among several of the largest U.S. manufacturers of IV solutions, including Baxter and Pfizer. That probe was closed in February.