Corruption poses a significant challenge to the global economy. It is an impediment to sustainable development, increases inequality, undermines public institutions, and dampens economic growth. For companies, corruption adds to the cost of doing business, represents significant legal and reputational risks and creates unsustainable business relationships. Baxter realizes that its ongoing business success relies on a sustainable business model in which Baxter and its partners market and sell the company's products in an ethical way that complies with applicable laws around the globe.

Baxter has policies governing its interactions with healthcare professionals and government officials in every region of the world. The company encourages open discussion of questions and concerns to avoid inappropriate decision-making or actions that potentially violate standards. Baxter employees are obligated to raise perceived violations of standards regarding the company's financial affairs, accounting practices, auditing matters, corruption, fraud, or other serious concerns. A variety of local and global channels may be used to raise questions or concerns, including a website, a hotline, regional ethics and compliance committees and other ethics and compliance personnel, and Baxter's Corporate Responsibility Office.

Major efforts in 2010 focused on finalizing the company's Third Party Policy, which completes the suite of policies that underpin Baxter's anticorruption compliance program. The Third Party Policy applies to business entities and individuals that conduct the following activities outside the United States on Baxter's behalf:

• Marketing, promoting or selling Baxter products;
• Negotiating or executing Baxter agreements;
• Lobbying or advocating for Baxter;
• Interacting with non-U.S. government officials; and
• Remunerating healthcare professionals or other relevant entities.

While Baxter's existing anticorruption policies prohibit Baxter and third parties from providing inappropriate payments or benefits to foreign government officials, healthcare professionals and other entities, the Third Party Policy provides a consistent process to conduct due diligence on business partners, and to retain and train them with respect to anticorruption laws and Baxter's expectations.

In the United States in 2010, Baxter piloted a robust approach to educating its U.S. business teams on U.S. healthcare compliance issues, and revamped its e-learning course on the subject, which it launched in early 2011.

Also in 2010, Baxter continued to implement its risk-based anticorruption education program to provide awareness-level training to most employees, and more advanced training to employees who regularly interact with government officials and healthcare professionals. During the year, Baxter conducted more than 170 international anticorruption training sessions, reaching nearly 5,000 employees in targeted positions, and delivered more than 65 U.S. healthcare compliance training sessions to more than 1,800 employees.

In 2010, Baxter evaluated a number of the more than 100 country-level organizations and 22 regional, global and multilateral organizations it identified in 2009 to prioritize with whom to collaborate to create industry-level codes of practice related to product marketing and sales. While Baxter determined it could not devote the resources to actively engage with any of these organizations in 2010, the company continues to view this as a long-term opportunity. At a regional level, Baxter continues to participate in Eucomed's efforts to support ethical marketing and sales practices in the European Union.

The company also researched broader anticorruption initiatives such as the United Nations Global Compact and the World Economic Forum Partnering Against Corruption Initiative, but has not yet determined whether to endorse those efforts.