Nestle will invest $500 million in the next 10 years to expand its medical nutrition business and help "pioneer a new industry between food and pharma" that the firm's executives estimate will be worth $100 billion to $150 billion.

The Swiss firm announced Sept. 27 it will create the Nestle Institute of Health Sciences, which will be part of research and development, and Nestle Health Sciences, a wholly owned subsidiary that will include the existing Nestle HealthCare Nutrition.

"These two separate organizations will allow Nestle to develop the innovative area of personalized health science nutrition to prevent and treat health conditions, such as diabetes, obesity, cardiovascular disease and Alzheimer's disease," according to a release.

Initially, the firm will distribute products mainly through hospitals, medical professionals and pharmacies, but eventually will look at marketing OTCs.

Nestle said Institute of Health Sciences research will exceed current requirements to support claims.

Nestle is no stranger to regulators' scrutiny of nutritional product claims.

In December 2009, FDA warned Nestle that it inappropriately marketed BOOST Kid Essentials Nutritionally Complete Drink as a medical food because the drink is available OTC for consumption without supervision (¹ Also see "FDA Ends Year With Exclamation Point In Nestle Nutrient Claims Action" - Pink Sheet, 4 January, 2010.).

In July 2010, the firm settled with the Federal Trade Commission to resolve allegations that it overstated the benefits of the BOOST Kid product (² Also see "POM Wonderful Misses Mark In Suit On FTC Claims Standard, Attorneys Say" - Pink Sheet, 20 September, 2010.).

Launching the institute and a subsidiary focused on health care nutrition marks Nestle's fifth major nutrition market play in less than four years.

The firm in 2007 acquired Novartis' Medical Nutrition, the Jenny Craig weight-loss chain and the Gerber baby food brand unit and in 2009 it added Vitaflo, a U.K. manufacturer of clinical nutrition products.

- Elizabeth Crawford ( ³ e.crawford@elsevier.com )

Nestle Claims "Pioneer" Mantle With Nutrition Business Expansion

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