Baxter International

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Baxter International Inc.
Type Public
Traded as NYSEBAX
Industry Medical equipment
Founded 1931
Headquarters Deerfield, Illinois, U.S.
Key people Robert L Parkinson Jr, Chairman, CEO and President
Products Medical supplies to treat hemophilia, kidney disease and provide intravenous therapy
Revenue IncreaseUS$12.8B (FY 2010)[1]
Operating income IncreaseUS$2.14B (FY 2010)[1]
Net income IncreaseUS$1.42B (FY 2010)[1]
Total assets IncreaseUS$17.5B (FY 2010)[2]
Total equity DecreaseUS$6.57B (FY 2010)[2]
Employees 48,500
Website www.Baxter.com

Baxter International Inc. is an American health care company with headquarters in Deerfield, Illinois.[3] The company primarily focuses on products to treat hemophilia, kidney disease, immune disorders and other chronic and acute medical conditions. The company had 2013 sales of $15.3 billion, across two businesses: BioScience and Medical Products. Baxter’s BioScience business produces recombinant and blood plasma proteins to treat hemophilia and other bleeding disorders; plasma-based therapies to treat immune deficiencies and other chronic and acute blood-related conditions; products for regenerative medicine; and vaccines. Baxter’s Medical Products business produces intravenous solutions and other products used in the delivery of fluids and drugs to patients; inhalation anesthetics; contract manufacturing services; and products to treat end-stage renal disease, or irreversible kidney failure, including solutions and other products for peritoneal dialysis and hemodialysis.[4]

History[edit]

Baxter International was founded in 1931 by Donald Baxter, a medical doctor, as a manufacturer and distributor of intravenous therapy solutions. 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 1954, the company 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. 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.[5] In 1993 the company pled guilty to a felony in relation to an anti-boycott law in the United States[6] 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.[7] Under pressure from shareholders due to poor performance and an unsuccessful merger, Loucks was forced to resign.[6] Baxter acquired medical device firm Baxa on November 10, 2011.[8] In 2011, Hikma Pharmaceuticals PLC completed the acquisition of Baxter Healthcare Corporation's US generic injectables business (Multi-Source Injectables or MSI).[9][10]

In July 2013, EU antitrust regulators approved Baxter’s bid for Sweden’s Gambro.[11]

Philanthropy[edit]

In 2010, the Baxter Corporation instated an initiative called the “Baxter Education Advantage” Program. The program aims to offer scholarship grants of up to $15,000 to students with Hemophilia seeking higher education, offers advice on the college search process, and tools to ease the transition both into college and in preparation for the job search. In 2010, 21 students were named University Scholarship Recipients and 11 students were named Technical School Scholarship Recipients. (http://www.myeducationadvantage.com/community/scholarship-recipients.html)

Environmental activities[edit]

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.[12] 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.[13] 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.[14]

Structure[edit]

Baxter International by businessline[15][16]
Name Focus 2013 sales (In billions) Percentage total sales
BioScience Hemophilia therapy; antibody therapy; critical care therapy; pulmonology therapy; biosurgery products; vaccines $6.6 43%
Medical Products IV solutions, premixed drugs, infusion pumps and administration sets; parenteral nutrition products; anesthesia; drug formulation and pharma partnering; peritoneal dialysis products; hemodialysis products; continuous renal replacement therapy $8.7 57%


The company had 2013 sales of $15.3 billion, across two businesses: BioScience (2013 sales - $6.6 billion) and Medical Products ($8.7 billion).[4] Sales in 2013 were 42% in the United States, 30% in Europe, 165% in Asia Pacific, 12% in Latin America and Canada. In 2011, Baxter had approximately 61,500 employees. The breakdown of regional employees in 2013 was 36% in the United States; 34% in Europe; 16% in Asia Pacific; 14% in Latin America and Canada. In 2013, Baxter International spent more than $1.2 billion on research and development.[17]

Corporate governance[edit]

In 1953 William Graham became the company's CEO. Vernon Loucks became president and CEO in 1980. Loucks was forced to resign by shareholders.[6] Loucks was succeeded by Harry Kraemer, who was succeeded by Robert Parkinson, who took the CEO position in 2004.[5]

H1N1 vaccine[edit]

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.[18]

Controversies[edit]

2001 Althane disaster[edit]

The Baxter Althane disaster in autumn 2001 was a series of 56 sudden deaths of renal failure patients in Spain, Croatia, Italy, Germany, Taiwan, Colombia and the USA (mainly Nebraska and Texas). All had received hospital treatment with Althane hemodialysis equipment, a product range manufactured by Baxter International, USA.[19][20]

2004[edit]

On July 22, 2004, The Deerfield-based company restated earnings from 2001 through 2003 mainly because of an error in the way it recognized revenue and inadequate bad-debt provisions in Brazil.[21]

2005[edit]

On March 14, 2005, Baxter International Inc. restated its financial statements for the years 2001 through 2003 and for the first three quarters of 2004, because of errors in income tax accounting.[22]

2008 Chinese heparin adulteration[edit]

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.[23] 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.[24][25][26] 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[edit]

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).[27] 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,[28] Baxter claimed the failed controls over the distribution of the virus were 'stringent' and there was 'little chance' of the lethal virus harming humans.[29]

2009 drug cost inflation[edit]

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%.[30]

2010 Hepatitis C infections[edit]

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.[31]

2008–2010 tax dodging[edit]

In December 2011, the non-partisan organization Public Campaign criticized Baxter for spending $10.45 million on lobbying and not paying any taxes during 2008–2010, instead getting $66 million in tax rebates, despite making a profit of $926 million.[32]

References[edit]

  1. ^ a b c Baxter International (BAX) annual SEC income statement filing via Wikinvest.
  2. ^ a b Baxter International (BAX) annual SEC balance sheet filing via Wikinvest.
  3. ^ "Contact Us." Baxter International. Retrieved on February 2, 2011. "Corporate address: One Baxter Parkway Deerfield, IL 60015-4625."
  4. ^ a b "2013 Form 10-K". 
  5. ^ a b "History". Baxter International. Archived from the original on June 2, 2009. Retrieved July 8, 2009. 
  6. ^ a b c Mintzberg, Henry (2004). Managers Not MBAs: A Hard Look at the Soft Practice of Managing and Management Development. San Francisco, Calif: Berrett-Koehler Publishers. pp. 115–6. ISBN 1-57675-275-5. 
  7. ^ Feldman, EA; Bayer R (1999). Blood feuds: AIDS, blood, and the politics of medical disaster. Oxford University Press. pp. 49–50; 320. ISBN 0-19-513160-6. 
  8. ^ "Baxter Int'l finishes $380M Baxa Corp purchase". The Boston Globe. 
  9. ^ "Hikma Pharmaceuticals Plc Completes Acquisition of Baxter Healthcare Corporation's Multi-Source Injectables Business". Reuters. Retrieved 3 May 2011. 
  10. ^ "History". Hikma Pharmaceuticals PLC. 
  11. ^ Foo Yun Chee (10 July 2013). "EU to clear Baxter's $4 billion buy of Sweden's Gambro: sources". Reuters. 
  12. ^ Bennett M; James P (1999). "The Evolution of Integrated Environmental Performance Evaluation and Reporting". In Klinkers L; Bennett M; James P. Sustainable Measures: Evaluation and Reporting of Environmental and Social Performance. Greenleaf Pubns. pp. 253–282. ISBN 1-874719-16-0. 
  13. ^ Adelson, G; Engell J; Ranalli B; Van Anglen KP. Environment: An Interdisciplinary Anthology. Yale University Press. pp. 254–5. ISBN 0-300-11077-4. 
  14. ^ "Baxter Cuts GHG Emissions by 21%". Environmentalleader.com. June 19, 2009. Archived from the original on June 21, 2009. Retrieved July 3, 2009. 
  15. ^ "Corporate Overview". Baxter International. Archived from the original on November 20, 2010. Retrieved November 5, 2010. 
  16. ^ Davis, JA (2003). "Purifying an image: Baxter International and the Dialyzer Crisis". In Feigenbaum AV. The power of management capital: utilizing the new drivers of innovation, profitability, and growth in a demanding global economy. McGraw-Hill Professional. pp. 349–364. ISBN 0-07-021733-5. 
  17. ^ "Corporate overview". 
  18. ^ "Baxter to release flu vaccine in July". United Press International. June 13, 2009. Archived from the original on June 16, 2009. Retrieved July 2, 2009. 
  19. ^ "Baxter Dialyzer Recall". Major Recalls of Organ Replacement Devices. Retrieved 12 October 2013. 
  20. ^ "Baxter Faces Suit On Dialysis Deaths". New York Times. November 14, 2001. Retrieved 12 October 2013. 
  21. ^ "Medical-products maker Baxter falls to loss; will restate results". 
  22. ^ "DJ Baxter To Restate 2001-2003 Results On Income Tax Errors". 
  23. ^ "Heparin's Deadly Side Effects". Time magazine. November 13, 2008. Archived from the original on November 21, 2008. Retrieved November 16, 2008. 
  24. ^ "Contaminant Found in Blood Thinner", Washington Post (Online edition), March 5, 2008
  25. ^ "Baxter probe focuses on US-owned China plant – WSJ", Reuters, February 15, 2008
  26. ^ "China Washes Hands on Heparin Purity", Wall Street Journal (Online edition) February 27, 2008
  27. ^ "Baxter Sent Bird Flu Virus to European Labs by Error". Bloomberg L.P. February 24, 2009. Retrieved August 8, 2009. 
  28. ^ "Baxter admits flu product contained live bird flu virus". The Canadian Press. February 27, 2009. Archived from the original on June 20, 2009. Retrieved July 4, 2009. 
  29. ^ Jack, A (March 16, 2009). "WHO mulls stricter transport of bio products". Financial Times. Retrieved June 16, 2009. 
  30. ^ Tracy, B (July 3, 2009). "Conway Announces Multi-Million Dollar Settlement With Drug Company". Kentucky Post (E. W. Scripps Company). Retrieved July 3, 2009. 
  31. ^ Teva, Baxter Will Fight $500 Million in Damages Over Propofol, Business Week, May 8, 2010
  32. ^ Portero, Ashley. "30 Major U.S. Corporations Paid More to Lobby Congress Than Income Taxes, 2008–2010". International Business Times. Archived from the original on December 26, 2011. Retrieved December 26, 2011. 

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