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 DEERFIELD, Ill., Aug. 15 /PRNewswire/ -- Baxter International's (NYSE: BAX) chairman and chief executive officer, Vernon R. Loucks Jr., is traveling on business in the Far East. The company's president and chief operating officer, James R. Tobin, made this statement today on Loucks' behalf:
 "We are very disturbed by the statement released Friday by the Department of Veterans Affairs (VA) alleging that Baxter has, since 1990, acted improperly in its sales practices involving the government.
 "This matter was the subject of discussions and correspondence with the VA in early 1991. At that time, the VA brought to management's attention the fact that there had been misunderstandings within Baxter about which of our products were or were not on the government's federal supply schedule. In addition, the VA questioned Baxter's methods for selling products that were not on the federal supply schedule. Ironically, our review at that time showed that the government actually saved money when it bought Baxter products that were not on the schedule.
 "Nevertheless, the key point is that it was not ever Baxter's intent as a company to mislead the VA in any way. Since our discussions with them in 1991, we have done everything we believed possible to assure that all our dealings with them have been ethical, proper, effective and efficient. We centralized our system for providing pricing and other information pertaining to government contracts. We provided added training for our customer-service people and sales representatives. We have conducted internal pricing audits of all our federal supply contracts.
 "In July 1991, the VA told us it was pleased with the actions we took, although they disagreed with our finding that the VA had in fact saved money in buying off-schedule items from Baxter. We heard nothing further from them about this matter until their news release Friday. We had been lead to believe the matter was satisfactorily resolved. We are now seeking the earliest possible meeting with them to learn the details of any continuing problems they believe may exist.
 "Our commitment to the VA, to the government and to every customer is that Baxter intends to follow the highest course of ethical conduct. We want to know of any evidence of failure in that commitment or failure in the systems we have in place.
 "Baxter's relationships with VA hospitals and Department of Defense hospitals have been good. We were one of fewer than 50 companies recognized by the Defense Logistics Agency for the product and logistical support we provided during Operation Desert Shield and Operation Desert Storm. We have worked cooperatively with government agencies to help them improve their logistical efficiency.
 "We will provide additional information as soon as we have it. We will do everything we can to uphold our commitment to ethical conduct and our reputation as an ethical company. Based on the information we now have, we hope the VA will reverse its decision to suspend Baxter from new government business."
 -0- 8/15/93
 /CONTACT: Geoffrey D. Fenton of Baxter, 708-948-3436/

CO: Baxter International ST: Illinois IN: HEA SU:

PS -- NYSU002 -- 2827 08/15/93 11:37 EDT
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Publication:PR Newswire
Date:Aug 15, 1993

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