Baxter(BAX) - 2023 Q4 - Annual Report

R&D and Innovation - R&D expenditures increased to $667 million in 2023, up from $602 million in 2022 and $531 million in 2021, reflecting a focus on enhancing future growth through clinical differentiation [42]. - The company is working to create a more resilient supply chain and may consolidate R&D facilities as part of its new operating model [42]. Financial Challenges - The company faced increased costs and shortages of raw materials and component parts, negatively impacting profit margins and sales due to an inability to fully satisfy demand [33]. - Contractual arrangements with GPOs and IDNs limit the company's ability to increase prices, which may constrain revenue growth amid rising raw material costs [31]. - Global healthcare cost containment efforts are pressuring product pricing, with governments implementing price controls and competitive tenders that affect sales [38]. - The company is involved in patent litigation, which can result in significant costs or injunctions affecting product sales [41]. Workforce and Employee Engagement - The company employs approximately 60,000 people globally, with 41,000 in the United States and 19,000 outside the United States, highlighting its significant workforce [52]. - The company has developed recruitment and retention strategies to attract and retain a diverse workforce, focusing on competitive pay and benefits [53]. - In 2023, the company aimed for a zero-harm workplace, prioritizing health and safety improvements through employee engagement and technology deployment [53]. - The company has implemented a tuition reimbursement program and an e-learning platform, BaxU, to foster employee development and a growth mindset [53]. - Regular anonymous surveys are conducted to gather employee feedback on leadership confidence, compensation competitiveness, and career growth opportunities [53]. - The results of employee engagement surveys are reviewed by senior leaders and shared with individual managers for actionable insights [53]. Regulatory Environment - The company is subject to extensive regulation by agencies like the FDA and EMA, impacting its ability to market and sell products globally [49]. Environmental Initiatives - Capital expenditures for environmental protection were $6 million in 2022, related to an emissions control system at the Arkansas facility [51].