News Release

BAXTER ACQUIRES PROPRIETARY RECOMBINANT ERYTHROPOIETIN DRUG

Move Marks the Company's Entry into Pharmaceuticals
Associated with the Care of People with Kidney Disease

DEERFIELD, Ill. October 16, 2001 -- Baxter International Inc. announced today that one of its subsidiaries has purchased from a small privately held company the assets and exclusive worldwide rights to the technology for a unique and proprietary recombinant erythropoietin (epo) drug for the treatment of anemia. This product, known as epoetin omega, has physicochemical characteristics that are distinctly different from other erythropoietins or Epos (alpha and beta) currently on the market worldwide. Epoetin Omega has patent protection in numerous parts of the world, including the United States and Europe, and is currently approved for sale in 15 countries outside of the United States and Western Europe.

"We are pleased to be moving forward so quickly with our entry into the pharmaceutical arena related to treating kidney disease and associated illnesses, which is the strategic business direction we announced in March. The acquisition of Epoetin Omega marks the first step for Baxter's Renal business in this new marketplace. It also positions Baxter in a unique role as the only company offering a complete and complementary portfolio of dialysis-related products," said Alan L. Heller, Baxter senior vice president and president of its Renal business.

"The epo market offers tremendous potential in terms of growth opportunity for Baxter, particularly given the innovative nature of the technology we've acquired and its potential applications to the company's emerging oncology business. Baxter has leadership in bioscience with a long history and expertise in developing and manufacturing recombinant proteins, and strong capability in drug delivery systems. We believe these core capabilities offer us opportunities to further enhance the technology, successfully introduce it into new markets around the globe, and pursue new indications," Mr. Heller added.

Erythropoietin is a hormone produced by healthy kidneys that stimulates red blood cell (RBC) production. RBCs are vital because they carry and deliver oxygen to tissues and organs throughout the body. When kidneys are not functioning well, they may not be able to produce enough erythropoietin, which causes RBC levels to drop and often leads to anemia. Anemia can cause debilitating side effects such as excessive fatigue, weakness and shortness of breath. Patients with end-stage renal disease commonly suffer from anemia and require genetically engineered forms of erythropoietin, such as Epoetin Omega, to manage their RBC deficiencies.

Since Epoetin Omega was first launched, it has been used by thousands of patients and more than 1,000 individuals have participated in clinical trials. The epoetin class of drugs represents the largest single sales category in the total dialysis product market, which includes equipment, disposables and pharmaceuticals. Global sales were nearly $5 billion in 2000 and are expected to more than double in size by 2005.

Baxter's sales will initially be in countries where the product is already approved for sale. While the product will not immediately be available in the United States, Japan and Western Europe, the company plans to pursue a rigorous clinical trial program to secure additional approvals and to expand the product's use.

Baxter is a leading provider of renal products and services worldwide. In 1956, the company pioneered hemodialysis with the introduction of the first widely available artificial kidney machine. Nearly 20 years later, Baxter was the first company to introduce peritoneal dialysis.

Baxter International Inc. is a global medical products and services company that, through its subsidiaries, provides critical therapies for people with life-threatening conditions. Baxter's products and services in bioscience (biopharmaceuticals, vaccines, biosurgery products and transfusion therapies), medication delivery and renal therapy are used by health-care providers and their patients in more than 100 countries.

This news release contains forward-looking statements that involve risks and uncertainties, including technological advances in the medical field, actions of regulatory bodies, product development processes, product demand and market acceptance, intellectual property claims and other risks detailed in the company's filings with the Securities and Exchange Commission. These forward-looking statements are based on estimates and assumptions made by management of the company and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results or experience could differ materially from the forward-looking statements.

	Media Contacts: Lisa Scheff, 847/948-4107 Deborah Spak, 847/948-2349
	Investor Relations: Neville Jeharajah, 847/948-2875 Mary Kay Ladone, 847/948-3371