Medical, Health Sciences Pulling Economy Forward

January 12, 2009
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Health care is considered to be the bright spot in an otherwise “difficult” economy, but some sectors within its broad spectrum are likely to suffer through the crunch, even while new policies are formulated in the nation’s capital under a new administration. Medical and health sciences, however, are taking extraordinary leaps forward, especially in West Michigan. At year end, Gerber announced with parent company Nestlé that it would make a $75 million investment in the Fremont plant for Nestlé Nutrition’s worldwide research and development for infant and toddler food products.

Similar investments were announced in 2008 in Holland and in Battle Creek. Michigan State University was awaiting a final legislative vote on restating funding for its announced bio-research center in an abandoned Pfizer lab in Holland. Battle Creek Unlimited announced a two-prong project with funding from the Kellogg Co. and Kellogg Foundation. The project moves 600 Kellogg employees into a new, LEED-certified office building in downtown (giving the urban area some critical mass), and among other developments also establishes a research center to assist new startup companies in food science and food safety industries. The center will focus on research, development and commercialization of new technologies.

The year just ended also was remarkable for Perrigo. The company announced an investment of $10.5 million to expand its Allegan headquarters, adding 400 jobs in the next five years, in addition to a $25 million expansion of its manufacturing and production facilities. The company also purchased Holland-based JB Laboratories and U.K.-based Galpharm Healthcare, and acquired Unico Holdings in Florida. Perrigo Chairman, President and CEO Joseph Papa told Grand Rapids Business Journal: “We believe generic drugs are an important part of the solution to the rising cost of health care. In the prescription world today, when a product goes generic, its price will drop almost 90 percent.”

Another year-end announcement is expected to have long-term ramifications in medicine as well as several other industries. Michigan State University won the Department of Energy bid as the site of the new Facility for Rare Isotope Beams.

In November, Michigan voters approved Proposal 2 to lift restrictions on stem cell research. The vote was lauded loudest by University of Michigan President Mary Sue Coleman, who has been stymied in the recruitment of researchers from other states with fewer restrictions. The new law is likely to propel similar research by companies in the West Michigan region.

This month it is likely that President Barack Obama will begin national debate on access to health care and health care insurances. The ramifications of bridge loans for Detroit’s Big Three automakers at press time included discussion of health care benefit reductions for union employees and retirees. What happens in Detroit is likely to have immediate ramifications for other employers across the country, and especially for the companies writing those benefit plans.

It is certain that this will be an interesting year of reporting in Grand Rapids Business Journal and Health Quarterly.

— Carole Valade

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