Baxter Reiterates Position Relating To The Use Of Plasticised PVC To Manufacture Medical Devices

In April 1999, Baxter International made an announcement in response to shareholder questions about the company's policy on the use of manufacturing materials. The announcement was misconstrued by certain environmental groups and was subsequently misreported in the media. As a result, Baxter International put out the following press release on April 8, 1999:

Baxter Reiterates Company's Position Regarding PVC

We are profoundly disappointed in the misrepresentations that have been made in recent days concerning Baxter's materials development efforts and its use of polyvinyl chloride (PVC) in its products. The recent statements made by activist groups are inaccurate.

Earlier this week, Baxter International Inc. and three institutional shareholders -- the Retirement Plans for the Employees of the Sisters of Mercy Regional Community Center of Detroit, the Sisters of Charity of Cincinnati and the Service Employees International Union (SEIU) Master Trust -- jointly announced an agreement that seeks to clarify Baxter's ongoing and future plans for research and development of additional medical products with non-PVC materials through the establishment of a timetable and benchmarks.

Specifically, the Memorandum says, "Baxter is committed to exploring and developing alternatives to PVC products and to developing and implementing proposed timetables for substituting its current containers for intravenous solutions with a container that does not contain PVC."

Baxter simply views this non-binding agreement as an opportunity to promote the materials development efforts it has already had in place for many years.

As stated in the April 6 press release, Baxter continually evaluates a variety of materials and allocates significant funding for the research and development of biomaterials. Continuing its decades-long efforts in the field of materials research and development, Baxter plans to develop and introduce many products over the next decade that use a variety of materials. Baxter already offers more than a dozen vital medical products that use alternative materials, including blood platelet storage containers, empty containers for compounding pharmaceutical and nutritional solutions, and such premixed medications as Ancef® , Pepcid®, Rocephin® and Vancocin®.

Our Viaflex® container has been the industry standard for intravenous solutions for nearly 30 years because of its excellent safety and performance record. As any smart company does, we are always looking to obsolete our own products and offer our customers additional features. We continue to explore and develop materials that will do just that – provide superior safety and performance and offer even greater optical clarity, efficiency and ease of manufacturing. That these materials do not contain PVC has nothing to do with the unwarranted concern raised by activist groups regarding the safety of PVC.

In many applications, PVC remains the material of choice because of its long history of safe use, and because of its outstanding performance characteristics. In instances where the overall performance and safety of another material is proven superior to PVC and regulatory clearance is obtained, we will offer alternatives to our customers.

Medical products containing PVC have undergone strict regulatory review by many government and independent health agencies throughout the world, including the U.S. Food and Drug Administration (FDA). Hundreds of studies have confirmed the safety of this material in medical applications. Health Canada has stated that it, "has found no potential risk for patients in using blood products or IV solutions from PVC bags." The director of the

FDA's Center for Devices and Radiological Health said last month, "We believe that IV bags, blood administration sets and the other uses of PVC, including dialysis tubing are safe."

Health-care providers and their patients are best served by a reasoned, science-based approach in the development of medical products. That is the approach that we have always taken, and the approach we have shared with these shareholders.

We plan to remain a pioneer in materials research and we will continue to provide our customers with products made from the most appropriate materials, taking into careful consideration the unique characteristics of the solutions going into the containers, the performance characteristics required, and scientific data.

The Following Correction story Was Put Out By Associated Press On June 21

CHICAGO (AP) -- The Associated Press erroneously reported April 7 that Baxter International Inc. plans to stop making intravenous bags from polyvinyl chloride because of concern the material is unsafe.

Baxter is developing alternatives to PVC and will substitute them if they prove to be superior, but has no plans to stop using PVC altogether, according to company spokeswoman Deborah Spak.