US Federal Court:
Government Can Seek Money From Implant Settlement

AP 16sep03

[More below]

BIRMINGHAM, AL—The federal government can seek reimbursement for the cost of treating women with silicone breast implants under a $4.2 billion settlement of implant claims, a federal appeals court ruled.

The 11th U.S. Circuit Court of Appeals, in a decision made public Tuesday, ordered a lower court to reinstate the government's lawsuit seeking money for the cost of covering Medicare beneficiaries.

The ruling stemmed from a 1995 settlement of thousands of lawsuits by women who claimed implants endangered their health or made them sick. A judge in Birmingham presided over the case.

The government sought money through the settlement for the cost of caring for women who blamed health problems on implants, but a federal judge dismissed the case.

The 11th Circuit, however, said the case can go forward, but it didn't rule on whether the government should receive money through the settlement. It left that issue for the lower court to consider.

The settlement initially involved eight companies, but it now involves only Baxter International Inc. (BAX), Bristol-Myers Squibb Co. (BMY), 3M Co. (MMM), Union Carbide Corp. and Union Carbide Chemical and Plastics Co.

S&P: Baxter Int'l Rtgs Unchanged

Press Release / Standard & Poor's 17sep03

NEW YORK—Standard & Poor's Ratings Services said today that the ratings and outlook on medical products manufacturer Baxter International Inc. (A/Negative/A-1) will not immediately be affected by the company's plans to raise about $675 million through a common stock offering. The transaction meets Standard & Poor's previously stated expectations that the company will conservatively retire the balance of its outstanding equity forward purchase contract, which totaled $571 million as of July 1, 2003, in the second half of 2003. Baxter will use residual proceeds from the equity sale to fund its acquisition of certain assets from Alpha Therapeutic Corp. Nor will the ratings and outlook be affected by a court ruling that the federal government can seek reimbursement for the cost of treating women with silicone breast implants under an existing settlement agreement. Baxter's obligation for such reimbursements, if any, would likely be small.