Cardinal Health

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Cardinal Health, Inc.
Type Public
Traded as NYSECAH
S&P 500 Component
Industry Pharmaceuticals
Founded 1971
Headquarters Dublin, Ohio, U.S.
Area served Worldwide
Key people George S. Barrett
(Chairman and CEO)
Products Medical equipment
Clinical services
Revenue Increase US$ 107.552 billion (2010)[1]
Operating income Increase US$ 1.27 billion (2010)[1]
Net income Increase US$ 642 million (2010)[1]
Total assets Increase US$ 19.99 billion (2010)[1]
Total equity Increase US$ 5.28 billion (2010)[1]
Employees 34,000 [2] (2013)
Website Cardinalhealth.com

Cardinal Health, Inc. is a Fortune 500 health care services company based in Dublin, Ohio. The firm specializes in distribution of pharmaceuticals and medical products, serving more than 60,000 locations. The firm also manufactures medical and surgical products, including gloves, surgical apparel and fluid management products. In addition, it operates the nation’s largest network of radiopharmacies.[3] On December 10, 2013, it was announced that Cardinal Health would team up with CVS Caremark, which would form the largest generic drug sourcing operation in the United States. The venture will begin in July 2014.[4]

History[edit]

Founded in 1971 as Cardinal Foods by Robert D. Walter, it was initially a food wholesaler. After acquiring the Bailey Drug Company in 1979, it began wholesaling drugs as Cardinal Distribution, Incorporated. Following the introduction of the company on the NASDAQ stock exchange in 1983 it began a long string of acquisitions and mergers. It is now traded on the NYSE under symbol (CAH [3]). As of April, 2010, it was ranked 17th on the Fortune 500 list with 2009 annual revenue of over $99 billion.[5] The firm employs more than 30,000 people worldwide.

Acquisitions[edit]

In 1995, Medicine Shoppe International (St. Louis, est. 1970), the country’s largest franchise of retail pharmacies,[6] was acquired. The merger represented the first non-distribution acquisition by Cardinal Health.[7]

In 1997, in competition between Cardinal Health and McKesson Corporation, Cardinal Health planned to purchase Bergen, to which McKesson responded with a bid to purchase Amerisource. Instead, Amerisource and Bergen merged into AmerisourceBergen.[8]

In 1999, the firm acquired the Chicago-based medical products manufacturer and distributor, Allegiance Healthcare (formerly a division of Baxter Healthcare). Allegiance made surgical drapes, gloves, and gowns, and distributed customized arrangements of medical supplies (called "custom sterile packs" and "procedure-based delivery systems") .[9]

In April 2006, purchased Niagara Falls, NY based ParMed Pharmaceuticals for $40.1M. ParMed, which had been owned by Alpharma Inc. out of Fort Lee, NJ has a main office in Niagara Falls, NY and staff in West Seneca, NY and Jamestown, NY for a total of ~120 workers. The company’s primary customers are retail/independent pharmacies. ParMed’s focus of selling medicine in smaller quantities compliments Cardinal Health’s distribution to bigger hospital and drug store chains.

On June 28, 2007, the firm announced the completion of a tender offer for VIASYS Healthcare.[10] The company also announced plans to spin off the Clinical and Medical Products business as a separate publicly traded company under the name CareFusion, with David Schlotterbeck as CEO.[11] The spin-off was completed on September 1, 2009.[12] CareFusion's anticipated annual revenue will be approximately $4 billion.[11]

In June 2010, the company announced plans to expand its presence in specialty pharmaceutical services with an agreement to purchase Healthcare Solutions Holding in an $517 million all-cash transaction.[13]

In December 2010, the company acquired Kinray, one of the last independent pharmaceutical wholesalers in the United States, increasing Cardinal's presence in the independent pharmacy market by 40 percent.[14] Kinray had annual revenue of over $3.5 billion, and served about 2,000 independent retail pharmacy customers.[14]

Leadership[edit]

In April 2005, Jeffrey W. Henderson joined the firm as the Chief Financial Officer (CFO). R. Kerry Clark was appointed President and CEO on April 17, 2006, with Robert D. Walter retaining the Chairmanship. On September 29, 2008 the company announced Kerry Clark would retire and George Barrett would become the Chairman and CEO.

Restatements[edit]

On Sep 13, 2004, Cardinal Health announced to restate past results for fiscal 2001, 2002, 2003 and the first three quarters of 2004 downward, after an accounting review and an ongoing federal investigation.[15]

In 2005, In connection with the Audit Committee's conclusions reached in September and October 2004, the Company made certain reclassification and restatement adjustments to its fiscal 2004 and prior historical consolidated financial statements.[16]

Alaris Infusion Pump Recall[edit]

In 2007, Cardinal Health recalled Alaris Infusion Pump Model 8100 due to misassembled occluder springs that would cause patients to be overinfused which could lead to death.[17] According to a consent decree with the FDA, the FDA had issued warning letters to Cardinal Health around quality control issues in their supply chain.[18]

In 2009, Cardinal Health and the FDA agreed to amend the consent decree to have a thorough independent review of its product line and devices.[19]

DEA investigation into Oxycodone diversion[edit]

See also: Drug diversion

In 2008 Cardinal Health agreed to pay $34 million in civil penalties to settle DEA allegations that it failed to report suspicious orders of hydrocodone, a potent painkiller. The fine followed a 10-month DEA suspension of a Lakeland, FL distribution facility and two others in New Jersey and Washington.[20]

On February 2, 2012, the Drug Enforcement Administration again suspended the license of the firm's Lakeland, Florida distribution center to distribute controlled substances on charges that it had allowed four Florida pharmacies to purchase excessive amounts of controlled substances, in particular oxycodone.[21] As an example of what the DEA is trying to halt: According to the Justice Department, "Last year Cardinal shipped enough oxycodone to pharmacies in Sanford, Florida, that could supply a population eight times its size... Sanford has a population of 53,000 and the supply would support 400,000" [20] Cardinal obtained a restraining order against the suspension so they could continue to sell painkillers in mass-quantities to the targeted pharmacies, but the suspension was upheld on Feb 29 by a Federal district court because the court agreed with the DEA that Cardinal's activities represented an "imminent danger to the public." [22]

The company asserts that it has blocked two of the pharmacies, (Brooks Pharmacy. in Bonita Springs, Florida and Gulf Coast Medical in Panama City, Florida), and notified the corporate owners of the two pharmacies that were part of national chains, two CVS stores in Sanford, Florida.[21] In 2010, the Florida State Medical Examiner's Office recorded 4,048 deaths from prescription opioids, up 24% from 2009.[23]

References[edit]

  1. ^ a b c d e "Financial Statements for Cardinal Health, Inc. - Google Finance". Google.com. Retrieved 2012-09-01. 
  2. ^ "Cardinal Health to Release First-Quarter Results for Fiscal Year 2014 on Oct. 31". The Wall Street Journal. October 10, 2013. 
  3. ^ About Cardinal Health.
  4. ^ Berkrot, Bill (10 December 2013). "CVS, Cardinal Health form U.S. generic drug venture". Reuters. Retrieved 11 December 2013. 
  5. ^ Annual rankings of America's largest corporations. Fortune 500
  6. ^ Medicine Shoppe Company Description Hoover's, Inc. 2009
  7. ^ Cardinal Health history @ Cardinal.com
  8. ^ McKesson plans to buy rival Amerisource "Reuters", September 24, 1997, Accessed July 20, 2011.
  9. ^ Learning the business from the ground up: an interview with Steve Inacker DC Velocity Q & A
  10. ^ VIASYS
  11. ^ a b Cardinal Health to name spinoff after CareFusion line Healthcare IT News. February 18, 2009
  12. ^ Securities and Exchange Commission, Form 10 registration
  13. ^ Cardinal Health to Purchase Healthcare Solutions Holding News article from InfoGrok
  14. ^ a b Dinah Wisenberg Brin, "Cardinal Health to Purchase Kinray", Wall Street Journal, November 19, 2010
  15. ^ "Cardinal to restate results". 
  16. ^ "CARDINAL HEALTH INC - 10-Q Quarterly Report". 
  17. ^ "Cardinal Health Statement on Alaris Pump Module Worldwide Voluntary Recall". Retrieved 2 February 2013. 
  18. ^ "Cardinal Health 303, Inc. Signs Consent Decree with FDA Agrees to Correct Manufacturing Deficiencies". Retrieved 2 February 2013. 
  19. ^ "Cardinal Health 303, Inc. Signs Amended Consent Decree with FDA". FDA. Retrieved 2 February 2013. 
  20. ^ a b Schoenberg, Tom (2012-02-29). "Cardinal Health Blocked From Shipping Painkiller in Florida". Bloomberg. Retrieved 2012-09-01. 
  21. ^ a b Donna Leinwand Leger "DEA aims big in Cardinal Health painkiller case" USA Today Feb 27, 2012 [1]
  22. ^ Donna Leinwand Leger "Judge blocks Cardinal Health drug shipments in Fla." USA Today Deb 29, 2012 [2]
  23. ^ "DEA aims big in Cardinal Health painkiller case –". Usatoday.com. 2012-02-27. Retrieved 2012-09-01. 

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