Medical device maker B. Braun Medical Inc. is planning a big expansion in the coming years.
The maker of intravenous solutions and bags for hospitals, which now has about 1,360 workers in Irvine and Westminster, plans to grow by 20% to 25%, or about 300 workers, in the next six years, company officials said.
B. Braun, part of Germany’s B. Braun Melsungen AG with its U.S. base in Pennsylvania, expects to grow with demand for its products, including the Duplex intravenous drug delivery system made in Irvine.
“We’re just seeing the beginning of our future, which is great for Irvine,” said Willem deGoede, the Irvine-based chief operating officer of B. Braun Medical. “We’re excited about the capabilities of Irvine. So we decided let’s stay there and start investing.”
B. Braun’s parent has $4.8 billion in yearly sales and 35,000 workers worldwide. B. Braun’s U.S. operations account for about a quarter of that, deGoede said.
In Irvine, B. Braun Medical makes drug, nutritional and other intravenous solutions. The company works out of a 650,000-square-foot plant that opened in 1974 as McGaw Medical Inc.
Company officials say B. Braun has been insulated from the global recession because the nature of its products always put them in demand.
“One of the good things about B. Braun is that we are,for the majority of our products,commodity products,” deGoede said. “Hospitals still continue to have patients, and the patients have a need for our products.”
By contrast, makers of pricier medical devices have seen their sales and stock prices slip as hospitals cope with issues stemming from lost investment income from Wall Street’s meltdown, the credit crunch and the prospect of treating more people without health insurance because of job losses.
B. Braun Medical isn’t completely unaffected. The company has put in some efficiency measures, including reducing inventory, closing plants in Puerto Rico and New Jersey and automating some processes, deGoede said.
The company is “the little guy” among its competitors, according to deGoede. Baxter International Inc. and Hospira Inc., both of the Chicago area, each has about 40% of the intravenous solution and bag market. B. Braun Medical has about 20%.
B. Braun Medical gets about 65% of its sales from hospitals, largely through big purchasing groups that buy supplies and equipment for member hospitals. Other customers include surgery centers.
The company recently signed a contract with Premier Purchasing Partners Inc., a unit of San Diego-based Premier LP, which represents more than 30% of the hospitals in the U.S.
“It’s impossible to work in this business without working with the group purchasing organizations,” said Pete Klaes, vice president and general manager of B. Braun Medical’s OC operations. “They determine who can go in the hospitals and sell their products. There is no other way around it.”
Development, Safety Issue
B. Braun Medical also is working on drug research and development in Irvine, deGoede said.
The company historically has been one of OC’s lower-profile device makers. But it has gained some attention recently for its stance on medical safety.
Medical errors, such as giving the wrong drugs to patients or performing uncalled-for procedures, have become a hot button issue in the past decade.
B. Braun Medical addressed the issue by showing off its safety initiatives, including bar codes for solution bags and other products to prevent medication errors and connectors that work without needles, which reduce the risk of accidental needle sticks for healthcare workers.
The company also started producing an intravenous fluid container that doesn’t contain polyvinyl chloride, a polymer in plastic that some studies suggest causes cancer.
B. Braun Medical became established in OC when parent B. Braun Melsungen bought Irvine’s McGaw Inc. for about $320 million from Ivax Corp., a Miami drug maker that now is Ivax Diagnostics Inc.
It initially produced some devices with the McGaw logo, but these days sticks to its own brand.
Two years ago, B. Braun Medical took nearly 260,000 square feet of space in Westminster that holds finished products.
B. Braun Medical opened the Westminster warehouse after determining that distribution “wasn’t our core competency,” deGoede said.
That move also allowed the company to free up space in Irvine for future use.
