2. LEADERSHIP FLY-IN Washington, D.C. June 26-28, 2012 US GAPP LEADERSHIP FLY-IN Washington, D.C. June 26-28, 2012 US GAPP

3. FDA Reforms Jack Maniko Director Medication Delivery Federal Legislative Affairs

4. FDA Reforms – Key Message Please Support Passage of the FDA User Fee Package

5. FDA Reforms What Are They and Why Now?  Every 5 years, the Congress reauthorizes manufacturer user fees that pay for reviewer positions at FDA.  It is the political solution crafted to provide manufacturers with timely review of an application and to provide patients timely access to new therapies.  Bipartisan bill that needs to be passed by Congress and signed by the President by September 30, 2012 or thousands of FDA employees will lose their jobs.  The user fee provisions are the engine that drive the legislative vehicle.  Since it is a moving vehicle, other issues are attached.

6. The User Fee Engine  Prescription Drug User Fee Act – Oldest of the User Fees  Innovator drugs and biologics  Medical Device User Fee Act – Adolescent of the User Fees  Generic Drug User Fee Act – New  Biosimilars User Fee Act - New

7. FDA Reforms – The Cars Attached to the User Fee Engine  User fees open up the Food, Drug and Cosmetic Act, allowing other FDA related issues to be taken up and added into the legislation.  This bill will pass the Congress or else thousands of personnel at FDA will lose their jobs slowing down the drug and device approval process.

8. FDA User Fee Bill Timeline Two years in the making Past Baxter fly in participants have helped shape this legislation One of the few bills that will pass this year Senate Passage – 96-1 – May 24, 2012 House Passage – 387-5 – May 30, 2012 Goal is to reconcile differences in the two bills and passed by House and Senate before July 4 th recess.

9. Baxter Priority Issues Drug Shortage Drug Safety Pedigree/Traceability

10. Issue #1 - Drug Shortage According to the FDA, in 2010 there were a record number of shortages. In 2011 FDA indicated it continues to see an increasing number of shortages, especially those involving older sterile injectable drugs. The American Society of Health System Pharmacists (ASHP) along with the American Hospital Association have been the leading advocates for a legislative solution to the issue. Both House and Senate bills had FDA notification language in initial FDA User Fee legislation.

11. Drug Shortage – Baxter Actions to Date  Baxter FDA Policy Council reviewed the two drafts and commented through GAPP to the House and Senate Committees.  GAPP was successful in protecting the current data reporting system for our key BioScience products in the House and Senate versions of the legislation.  GAPP was successful in easing 6 month notification period in previous legislation to 6 months or as soon as practicable.

12. Drug Shortage Talking Points  Drug shortages of any kind are a complex problem that requires broad- based solutions from all stakeholders.  It is important that manufacturers are given the regulatory flexibility to respond rapidly to a drug shortage in order to provide patients with life saving and life sustaining therapies.  Baxter is committed to finding solutions to the drug shortage issue that are balanced and involve stakeholders across the supply chain and distribution spectrum.  We believe the current user fee package contains a good and necessary first step towards helping address the issue.

13. Issue #2 - Drug Safety  House and Senate legislation aims to increase funding and authority for the Food and Drug Administration (FDA) to adequately regulate prescription drugs in a globalized marketplace.  Heparin is used as the seminal example of why there needs to be drug safety reform.  HELP Hearing  After Heparin: Pew Study  Drug Safety Legislation

14. Drug Safety Talking Points Key Changes From Current Law:  Risk Based Inspection Frequency  Enhance criminal penalties for counterfeiting drugs Key Talking Points:  Baxter has a first-hand understanding why the Food and Drug Administration needs additional resources and authorities to regulate in a global marketplace.  Baxter is supportive of FDA having the resources and authorities necessary to ensure a safe drug and device supply to regulate in a global economy.

15. Issue #3 - Pedigree/Traceability Pedigree/traceability is technology such as a two dimensional bar code used to track pharmaceuticals from the manufacturer through the distribution channel to the pharmacy. Currently being negotiated in the House/Senate conference. Goal is to have a national standard that preempts any state law. GAPP is working to ensure product exemptions in California pedigree law are in the national law. – Examples include: – Intravenous products that by formulation, are intended for the replenishment of fluids and electrolytes, such as sodium, chloride, and potassium, calories, such as dextrose and amino acids or both – Intravenous products used to maintain the equilibrium of water and minerals in the body

16. FDA Reform Please Support Passage of the FDA User Fee Package