News Release

BAXTER'S SALES, EARNINGS GROW IN THIRD QUARTER

Baxter Reports 11% Increase In Sales, 13% Increase In EPS

Company Expects to Achieve Low-Double-Digit Sales, Mid-Teens EPS Growth for Full-Years 2002 and 2003

DEERFIELD, Ill., October 17, 2002 - Baxter International Inc. (NYSE:BAX) today reported increases in sales and earnings for the third quarter.

Baxter's sales advanced 11 percent in the quarter, totaling $2.10 billion, up from the $1.90 billion reported last year. Excluding the impact of foreign exchange, sales rose 9 percent in the quarter. Sales within the United States increased 3 percent to $1.02 billion, while sales outside the United States grew 19 percent (or 15 percent excluding the impact of foreign exchange) to $1.09 billion.

BioScience sales rose 14 percent to $776 million, Medication Delivery sales increased 16 percent to $832 million and Renal sales declined 2 percent, with sales of $494 million in the quarter. Contributing to sales growth in the quarter were vaccines, biosurgery products and the company's Recombinate recombinant Factor VIII therapy used in the treatment of hemophilia. Recombinate sales rose nearly 25 percent in the quarter. Also contributing to sales growth in the quarter were drug delivery, anesthesia and parenteral nutrition products.

Baxter's net earnings totaled $316 million in the third quarter, an increase of 16 percent over the $272 million reported last year. On a per share basis, Baxter's third quarter earnings totaled $0.51 per diluted share, a 13 percent increase over the $0.45 per diluted share reported in the same period last year. Baxter's investments in research and development grew 16 percent in the quarter, to $122 million.

Year-to-date, Baxter's sales have grown 10 percent (or 11 percent excluding the impact of foreign exchange) to $6.1 billion, up from the $5.5 billion reported last year. BioScience sales rose 13 percent to $2.25 billion, Medication Delivery sales advanced 14 percent to $2.39 billion and Renal sales were flat at $1.43 billion. Sales within the United States totaled $2.98 billion in the first nine months of this year, up 7 percent. Sales outside the United States increased 13 percent (or 14 percent excluding the impact of foreign exchange), to $3.10 billion.

Net earnings year-to-date increased 12 percent to $769 million, with earnings per diluted share up 10 percent to $1.24, including charges.

For full-year 2002, the company expects to achieve sales growth in the low- double digits, mid-teens growth in earnings per diluted share, excluding charges, and generate $500 million in operational cash flow.

"One of the keys to our success is effectively balancing short-term focus and discipline with investments in long-term growth," said Harry M. Jansen Kraemer, Jr., chairman and chief executive officer. "There are a number of innovative new products and technologies that we expect to launch, including our new plasma and albumin free recombinant Factor VIII therapy, the ALYX blood component collection system, and the INTERCEPT pathogen inactivation system for platelets. We continue to make strategic investments in these product launches, as well as our R&D pipeline, in expanded manufacturing capacity and in acquisitions and alliances to position the company for accelerated growth over the long term. As a result, we believe we are well-positioned to achieve sales growth in the low-double digits, earnings per diluted share growth in the mid-teens, and to generate $500 million in operational cash flow for full-year 2003."

Last month, Baxter submitted filings with European and Canadian regulatory authorities for the company's Antihemophilic Factor (Recombinant), Plasma/Albumin Free Method (rAHF-PFM). In June, Baxter submitted a Biologics License Application to the U.S. Food and Drug Administration (FDA) for rAHF-PFM, and the FDA formally accepted the file for review in August. Baxter's rAHF-PFM is the first Factor VIII recombinant therapy to be clinically developed and prepared without the addition of any human- or animal-derived raw materials in the cell culture process, purification or final formulation. All currently available recombinant Factor VIII therapies use human- or animal-derived raw materials at some point in their production processes or final product formulations.

Baxter received FDA approval in August for its ALYX Component Collection System, which allows blood centers to collect two transfusion doses of red blood cells instead of one from a single donor and offers the potential to increase the supply of this vitally needed blood component. ALYX is expected to be available to blood centers in the United States by the end of this year.

And earlier this week, Baxter announced with its partner, Cerus Corporation, final European regulatory approval for the INTERCEPT Blood System for platelets. This is the first pathogen inactivation system for inactivating certain known pathogens and potential emerging pathogens from platelets. The companies have begun the regulatory submission process for INTERCEPT Platelets in the United States and clinical trials are underway for use of this system with plasma and red blood cells for transfusion, making this the only pathogen inactivation technology being developed for use with all primary blood components.

Baxter expects to complete its previously announced acquisition of ESI Lederle, a division of Wyeth, before the end of 2002. In June, Baxter signed a definitive agreement to acquire the majority of ESI Lederle for approximately $305 million. ESI Lederle is a leading manufacturer and distributor of injectable drugs used in the U.S. hospital market, and it offers a complete range of sterile injectable manufacturing capabilities, including ampules and vials. Under the agreement, Baxter will acquire ESI Lederle's generic injectable products and patent-expired branded products, such as Phenergan® (promethazine), Ativan® (lorazepam), heparin, midazolam and fentanyl to expand its anesthesia and critical care portfolio. Baxter also will acquire a 330,000-square-foot facility for manufacturing injectable, small-volume drugs located in Cherry Hill, New Jersey.

A webcast of Baxter's third quarter conference call for investors can be accessed live from a link on Baxter's website at www.baxter.com beginning at 8:00 a.m. CDT on October 17, 2002. The company also will be making investor presentations on the following dates during the fourth quarter of 2002: October 29, November 5 and November 13. Please visit Baxter's website for additional information about these events.

Baxter International Inc. is a global health care company that, through its subsidiaries, provides critical therapies for people with life-threatening conditions. Baxter's bioscience, medication delivery and renal products and services are used to treat individuals with such medical conditions as cancer, hemophilia, immune deficiencies, infectious diseases, kidney disease and trauma.

This news release contains forward-looking statements that involve risks and uncertainties, including technological advances in the medical field, product demand and market acceptance, actions of regulatory bodies, the impact of competitive products and pricing, 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.

(ALYX, Baxter, INTERCEPT and Recombinate are trademarks of Baxter International Inc.)
(Ativan and Phenergan are registered trademarks of ESI Lederle)

FOR ADDITIONAL INFORMATION:

	Media Contact: Deborah Spak, 847-948-2349 Sally Benjamin Young, 847-948-2304   Investor Contacts: Neville Jeharajah, 847-948-2875 Mary Kay Ladone, 847-948-3371