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Baxter International

Baxter International Inc. (NYSE: BAX), is an American health care company with headquarters in Deerfield, Illinois. The company primarily focuses on products to treathemophilia, kidney disease, immune disorders and other chronic and acute medical conditions. The company has sales of $12.3 billion, across three manufacturing divisions (BioScience, producing blood plasma proteins; Medication Delivery producing intravenous therapy products and liquids; and Renal producing equipment for dialysis and the treatment of kidney disorders).[1]The company is also involved in the production of a vaccine for the H1N1 influenza.

The company was involved in several controversies. In 2001, malfunctioning dialysis machines resulted in several deaths; in 2008 the company supplied contaminated heparin; in 2009 lethalH5N1 avian flu virus was delivered to laboratories across Europe mixed with seasonal influenza vaccines; also, the company was charged with excessive billing of Kentucky Medicaid.



  • 1 History
  • 2 Environmental activities
  • 3 Structure
  • 4 H1N1 vaccine
  • 5 Controversies
    • 5.1 Dialyzer crisis
    • 5.2 2008 Chinese heparin contamination
    • 5.3 2009 avian flu contamination
    • 5.4 Kentucky settlement
    • 5.5 2010 award over Hepatitis C infections
    • 6 References
    • 7 External links


Baxter International was founded in 1931 by Davis Baxter, a medical doctor, as a manufacturer and distributor of intravenous therapysolutions. Baxter’s interest was bought out in 1935 by Ralph Falk, who established a research and development function. In 1939 the company developed a vacuum-type collection container, extending the shelf life of blood from hours to weeks. In 1953 William Graham became the company’s chief executive officer, and in 1954 expanded operations outside of the United States by opening an office in Belgium. In 1956 Baxter International introduced the first functioning artificial kidney, and in 1971 became a member of the Fortune 500. Vernon Loucks became president and CEO in 1980; throughout the 1980s and 1990s the company expanded to deliver a wider variety of products and services (including vaccines, a greater variety of blood products) through acquisitions of various companies. Sales and production facilities also expanded throughout the world.[2] In 1993 the company pled guilty to a felony in relation to an anti-boycott law in the United States[3]and in 1996, the company entered into a four-way, $640 million settlement with haemophiliacs 1999 in relation to blood clotting concentrates that were infected with HIV.[4] Under pressure from shareholders due to poor performance and an unsuccessful merger, Loucks was forced to resign[3] and was replaced by Harry Kraemer, who was replaced by Robert Parkinson in 2004.[2]

Environmental activities

Baxter International is recognized as a leading company in environmental performance and reporting, having an explicit focus on environmental issues since 1976; actions included an environmental policy and manual, a series of audits, regular environmental conferences, efforts to prevent and clean up site contamination and staff dedicated to environmental improvements. In 1997, a report produced by the company indicated that changes made to reduce environmental impacts generated savings that exceeded their cost, producing a net profit. Reporting was company-wide, with a variety of aggregation and reporting, including on the company’s internet and intranet sites.[5] The company was an early joiner in the “green and greedy” movement, which aims to lessen the environmental impacts of manufacturing its products while saving the company money.[6] In 2009 the company announced it had reached a variety of its environmentally-friendly goals, and that it would continue to try to reduce waste, emissions, energy use and environmental incidents over the coming years.[7]


Baxter International by businessline[8][9]
Name Focus 2008 sales (In billions) Percentage total profits
BioScience Vaccines and biopharmaceuticals $5.3 44%
Medication Delivery Intravenous solutions and equipment $4.6 37%
Renal Peritoneal dialysis $2.3 19%

Sales are primarily in the United States (41%) and Europe (35%), with a similar breakdown of regional employees (42% and 29% respectively). In 2008, Baxter International claimed to have spent $868 million on research and development.[8]

H1N1 vaccine

In June 2009, Baxter International announced it expected to have the first commercial vaccine for the H1N1 (“swine flu”) influenza as early as July of the same year. The company has been one of several working with the World Health Organization and United States Centers for Disease Control and Prevention on the vaccine, and uses a cell-based rather than egg-based technology that allows a shorter production time.[10]


Dialyzer crisis

On August 15, 2001, two elderly patients in Spain died within hours of receiving dialysis from Baxter products. Eventually 51 more patients would die; though the cause was unclear, the company issued a worldwide recall of two lines of filters, the sole common link between all the equipment used by the patients. Harry Kraemer, the company president at the time, apologized for the errors, shut down the factory producing filters, alerted competitors of the issue and took a 40% pay cut along with a 20% cut for other executives.[11] The company’s earnings dropped by $189 million as a result of the issues. The company took quick action to reduce the impact of the event and prevent future recurrence and as a result suffered minimal damage to its reputation.[9]

2008 Chinese heparin contamination

Main article: 2008 Chinese heparin contamination

In 2008, the quality of blood thinning products produced by Baxter was brought into question when they were linked to 19 deaths in the United States.[12] Upon inspection one of the raw ingredients used by Baxter were found to be contaminated – between 5 and 20 percent – with a substance that was similar, but not identical, to the ingredient itself. The company initiated a voluntary recall, temporarily suspended the manufacture of heparin, and launched an investigation.

Investigation into the contamination has focused on raw heparin produced by Changzhou Scientific Protein Laboratories, a China based branch of Scientific Protein Laboratories, based in Waunakee, Wisconsin. Due to procedural errors Changzhou SPL’s facilities was never subject to an inspection by US FDA official, as required by FDA rules. The factory’s products were also never certified as safe for use in pharmaceutical products by Chinese FDA officials as Changzhou SPL was itself registered as a chemical company and not a drugs manufacturer.[13][14][15] Though Baxter was first to recall heparin because of increased adverse reactions, after the contaminant was identified and testing protocols were shared with other manufacturers globally, over a dozen other companies in nearly a dozen countries issued recalls, which linked back to certain supply points in China.

2009 avian flu contamination

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In early 2009, samples of viral material supplied by Baxter International to a series of European laboratories were found to be contaminated with live Avian flu virus (Influenza A virus subtype H5N1).[16] Samples of the less harmful seasonal flu virus (subtype H3N2) were found to be mixed with the deadly H5N1 strain after a vaccine made from the material killed test animals in a lab in the Czech Republic. Though the serious consequences were avoided by the lab in the Czech Republic,[17] Baxter claimed the failed controls over the distribution of the virus were ‘stringent’ and there was ‘little chance’ of the lethal virus harming humans.[18]

Kentucky settlement

On July 2, 2009, Kentucky Attorney General Jack Conway announced a settlement between the state and Baxter Healthcare Corporation, a subsidiary of Baxter International, worth $2 million. The company had been inflating the cost of the intravenous drugs sold to Kentucky Medicaid, at times as much as 1300%.[19]

2010 award over Hepatitis C infections

Main article: Chanin v. Teva

In 2010, a jury in Las Vegas, Nevada ordered Baxter to pay $144 million to patients who had been infected with Hepatitis C after doctors wrongly reused dirty medical supplies to administer propofol to patients. The jury granted the award, despite the fact that the label for propofol clearly states that it is for single-patient use only and that aseptic procedures should be used at all times.[20]

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