Cardinal Health

Cardinal Health, Inc. is an American

multinational health care services
company, and the 14th highest revenue
generating company in the United States.
Its headquarters are based in Dublin, Ohio
and Dublin, Ireland (EMEA). The company
specializes in distribution of
pharmaceuticals and medical products,
serving more than 100,000 locations.[2]
The company also manufactures medical
and surgical products, including gloves,
surgical apparel and fluid management
products. In addition, it operates the
largest network of radiopharmacies in the
U.S.[3] Cardinal Health provides medical
products to over 75 percent of hospitals in
the United States.[4]
 Cardinal Health, Inc.

Type Public

Traded as NYSE: CAH
S&P 500 Component

Industry Pharmaceuticals

Founded 1971

Headquarters Dublin, Ohio, U.S.

Area served Worldwide

Key people Michael Kaufmann
(CEO)

Products Medical and

pharmaceutical
products and services

Revenue US$136.80 billion

(2018)[1]
Operating income US$126 million
(2018)[1]
Net income US$256 million
(2018)[1]

Total assets US$39.95 billion

(2018)[1]

Total equity US$6.05 billion

(2018)[1]

Number of employees ~50,000 (2018)[1]

Website www.cardinalhealth
.com

History
Founded in 1971 as Cardinal Foods by
Robert D. Walter, the company was initially
a food wholesaler. After acquiring the
Bailey Drug Company in 1979, it began
wholesaling drugs as Cardinal Distribution,
Incorporated. The company went public on
the NASDAQ stock exchange in 1983 and
subsequently began a long string of
acquisitions and mergers. In 1988, Walter
sold Cardinal Health's food operations to
Roundy's.[5] From 1991 to 1996, the
company's sales grew from $1.2 billion to
$8.9 billion.[6] In a case study for Harvard
Business Review, Mary Teagarden
describes Cardinal Health in this period as
"one of a handful of large U.S. companies
that had achieved earnings-per-share
growth in excess of 20 percent for 15
years straight."[7] The company changed
its name to Cardinal Health in 1994 and
became the third-largest pharmaceutical
wholesaler in the United States.[5][8]

R. Kerry Clark, a former executive and vice

chairman at Procter & Gamble, was
appointed president and CEO in April 2006,
with Robert D. Walter retaining
Chairmanship of the board.[9] In
September 2008, the company announced
Clark and Walter would retire and George
S. Barrett would become the chairman and
CEO.[10][11]

Cardinal Health completed the spin-off of

its clinical and medical products
businesses into an independent medical
technology company called CareFusion in
2009 with David Schlotterbeck as
CEO.[12][13] Cardinal Health is now traded
on the NYSE under symbol CAH.[14] As of
August 2017, it is ranked 15 on the
Fortune 500 list with FY2017 annual
revenue of $121.5 billion. The firm
employs 37,300 people worldwide.[15]

In December 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.[16] The venture was named
Red Oak Sourcing and began operations in
July 2014.[17]
Acquisitions

In 1995, Medicine Shoppe International

(St. Louis, est. 1970), the country's largest
franchise of retail pharmacies, was
acquired. The merger represented the first
non-distribution acquisition by Cardinal
Health.[18]

In 1996, Cardinal Health acquired Pyxis

Corporation, a company that developed
automated pill dispensers for hospitals,
for $867 million.[19]

In a 1997 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.[20] Later that
year, Cardinal Health completed the
acquisition of Owen Healthcare, the
second-largest provider of pharmacy
management services in the U.S. at the
time.[21]

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").[22] During 2001,
the company spent approximately $30
billion on acquisitions, including Bindley
Western Industries, wholesale distributor
of pharmaceuticals based in
Indianapolis.[18]

In April 2006, Cardinal Health purchased

Niagara Falls-based ParMed
Pharmaceuticals for $40.1 million.
ParMed's focus of selling medicine in
smaller quantities complements Cardinal
Health's distribution to bigger hospital and
drug store chains. In June 2007, the firm
announced the completion of a tender
offer for VIASYS Healthcare.[23]

In June 2010, Cardinal Health announced

plans to expand its presence in specialty
pharmaceutical services with an
agreement to purchase Healthcare
Solutions Holding for $517 million.[24] In
December 2010, the company acquired
Kinray, one of the last independent
pharmaceutical wholesalers in the United
States, increasing Cardinal Health's
presence in the independent pharmacy
market by 40 percent.[25] Kinray had
annual revenue of over $3.5 billion, and
served about 2,000 independent retail
pharmacy customers.[25] From 2010 to
2014, Cardinal Health acquired 18
companies including Yong Yu, a Chinese
drug distributor. Cardinal Health teamed
up with CVS to form Red Oak Sourcing, the
largest generic drug sourcing operation in
the United States, in July 2014, when the
companies started buying generic drugs
around the world to sell in U.S. markets.[4]

In March 2015, Cardinal Health signed an

agreement to acquire Johnson &
Johnson's Cordis (medical) division, a
cardiology and endovascular device
manufacturer, for $1.94 billion. Cordis'
largest market is in the United States, but
the manufacturer employs approximately
3,000 people around the world and 70
percent of its sales are international.[26][27]
The acquisition was completed on October
4, 2015.[28]

In March 2015, Cardinal Health signed an

agreement to acquire Tradex International,
a Cleveland-based distributor of latex and
other gloves used primarily in the health
care and food service industries.[29]

In April 2017, Cardinal Health announced

the plan to acquire leading patient product
portfolio from Medtronic for $6.1
billion.[30] The acquisition was completed
on July 30, 2017. The acquisition was
funded with a combination of $4.5 billion
in new senior unsecured notes, existing
cash and borrowings under its existing
credit arrangements.[31]

Finances
For the fiscal year 2017, Cardinal Health
reported earnings of US$7.181 billion, with
an annual revenue of US$136.809 billion,
an increase of 5.3% over the previous
fiscal cycle. Cardinal Health's shares
traded at over $57 per share, and its
market capitalization was valued at over
US$15.4 billion in November 2018.[32] As
of 2018, Cardinal Health is ranked #14
Fortune 500 among the largest United
States corporations by total revenue.[33] In
June, 2019, investor Michael Burry of
Scion Asset Management (from "The Big
Short") reported taking a position in the
company.[34]
 Revenue Net income Total Assets Price per Share
Year Employees
in mil. USD$ in mil. USD$ in mil. USD$ in USD$

2005 72,666 4,460 21,838 33.48

2006 79,664 4,814 23,433 38.32

2007 86,755 5,197 23,154 38.62

2008 87,408 3,777 23,448 28.75

2009 95,992 3,748 25,119 21.10

2010 98,503 3,781 19,990 28.37

2011 102,644 4,162 22,846 35.90

2012 107,552 4,541 24,260 35.61

2013 101,093 4,921 25,819 45.20 33,600

2014 91,084 5,161 26,033 65.92 34,000

2015 102,531 5,712 30,142 79.39 34,500

2016 121,546 6,543 34,122 74.14 37,300

2017 129,976 6,544 40,112 69.22 40,400

2018 136,809 7,181 39,951 57.47 50,200

Controversy
Restatements

In September 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. 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.[35] According to the
Wall Street Journal, "Analysts called the
restatement decision troubling, yet limited
in scope."[36]

FDA action
In August 2006, Cardinal Health ceased
production of its Alaris SE infusion pump
after approximately 1300 units were
seized by the United States Food and Drug
Administration (FDA).[37] In February 2007,
Cardinal Health signed a consent decree
with the FDA which promised procedures
to guarantee the safety of the Alaris SE.[12]
After FDA inspections, Cardinal Health
entered into a further consent agreement
with the FDA in 2009.[12]

DEA investigation into

Oxycodone 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. The
fine followed a 10-month DEA suspension
of a Lakeland, Florida distribution facility
and two others in New Jersey and
Washington.[38] On February 2, 2012, the
Drug Enforcement Administration again
suspended the license of the firm's
Lakeland 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.[39]
Cardinal Health obtained a restraining
order against the suspension, but the
suspension was upheld on February 29 by
a Federal district court because the court
agreed with the DEA that Cardinal Health's
activities represented an "imminent danger
to the public."[40] The company stated that
it 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.[39]

In February 2012, Joseph Rannazzisi, chief

of the Drug Enforcement Administration’s
Office of Diversion Control, issued
immediate suspension orders against
Cardinal's supply of oxycodone to
suspected pill mills.[41] Deputy Attorney
General James M. Cole then called
Rannazzisi to a meeting at Justice
Department headquarters where Cole
warned him “it made good sense to listen
to what Cardinal had to say”.[41] Rannazzisi
was fired from the drug diversion office in
August 2015.[41] Cardinal was fined $44
million.[42]

Cardinal, alongside McKesson

Corporation, and AmerisourceBergen,
spent $13 million lobbying Congress to
pass Congressman Tom Marino's
"Ensuring Patient Access and Effective
Drug Enforcement Act".[41] The bill, which
increases the burden of proof enforcers
need to show against drug distributors,
was signed into law by President Barack
Obama in April 2016.[43]

Cardinal Health
Foundation
The Cardinal Health Foundation is the
charitable arm of Cardinal Health. The
company makes annual product donations
of over $9 million through international
relief organizations and provides up to
$1,000 in matching funds for every
Cardinal Health employee that makes a
charitable donation.[44] In 2008, the
foundation established its E3 Grant
Program.[45] Over the past seven years, the
Foundation has invested more than $7.15
million in funding to 241 hospitals, health
systems or other health-related
organizations.[46]

Cardinal Health also supports

organizations such as Ronald McDonald
House Charities, and was named
Benefactor of the Year at the 2011
Corporate Caring Awards.[44] In 2015, the
foundation contributed $3 million to the
Solutions for Patient Safety project, which
has raised over $11 million nationally for
efforts to improve safety initiatives in
children's hospitals.[47]

References
1. "Form 10K" (PDF). EDGAR SEC.
August 10, 2018. Retrieved October 8,
2018.
2. Wartenberg, Steve (February 28,
2015). "Cardinal Health moving some
Dublin jobs to Philippines" . The
Columbus Dispatch. Retrieved
June 10, 2015.
3. "Who we are" . Cardinal Health.
Retrieved October 8, 2017.{{[null Self-
published source]|date=October
2017}}
4. Wartenberg, Steve (November 6,
2014). "Turnaround succeeding,
Cardinal Health says" . The
Columbus Dispatch. Retrieved
June 10, 2015.
5. "Executive Interview: Bob Walter" .
Journal of Healthcare Contracting.
March 2005. Retrieved June 10, 2015.
6. "The $9 Billion Company Nobody
Knows" . Bloomberg Business. March
2, 1997. Retrieved June 10, 2015.
 7. Teagarden, Mary B. (March 11, 2009).
"Cardinal Health, Inc. (Case Study
A)" . hbr.org. Harvard Business
School. Retrieved May 20, 2016.
8. Wankel, Charles (2009). Encyclopedia
of Business in Today's World: A - C .
1. SAGE Publications.
ISBN 9781412964272. Retrieved
June 10, 2015.
9. "Walter steps down at Cardinal
Health, P&G exec takes over" .
Columbus Business First. April 17,
2006. Retrieved June 10, 2015.
10. Ghose, Carrie (October 6, 2008).
"Next Cardinal Health CEO sees
 bright future after spinoff" .
Columbus Business First. Retrieved
June 10, 2015.
11. Wartenberg, Steve (May 19, 2013).
"Cardinal Health's CEO uses
background to think outside the
box" . The Columbus Dispatch.
Retrieved June 10, 2015.
12. "Cardinal Health to name spinoff
after CareFusion line" . Healthcare IT
News. February 18, 2009. Retrieved
June 13, 2018.
13. Rhea, Shawn (September 2, 2009).
"Cardinal Health completes
 CareFusion spinoff" . Modern
Healthcare. Retrieved June 10, 2015.
14. "Cardinal Health Inc(NYSE:CAH)" .
15. "Cardinal Health" . Fortune. Retrieved
2017-08-03.
16. Berkrot, Bill (10 December 2013).
"CVS, Cardinal Health form U.S.
generic drug venture" . Reuters.
Retrieved 11 December 2013.
17. Ghose, Carrie (May 1, 2014).
"Cardinal Health, CVS generics
venture Red Oak on track for July
start" . Columbus Business First.
Retrieved June 13, 2018.
18. "Cardinal Health, Inc. History".
International Directory of Company
Histories . 50. St. James Press.
2003. Retrieved June 10, 2015.
19. Freudenheim, Milt (February 8, 1996).
"Cardinal Deal To Buy Pyxis In Stock
Swap" . The New York Times.
Retrieved June 10, 2015.
20. McKesson plans to buy rival
Amerisource "Reuters", September
24, 1997, Accessed July 20, 2011.
21. "Cardinal Health to Purchase Owen
Healthcare" . The New York Times.
November 28, 1996. Retrieved
June 10, 2015.
22. Learning the business from the
ground up: an interview with Steve
Inacker DC Velocity Q & A
23. "Cardinal Health acquires VIASYS for
$1.5B" . Healthcare IT News. May 14,
2007. Retrieved June 10, 2015.
24. Taulli, Tom (June 9, 2010). "Cardinal
Health Pays $517 Million for Obscure
Specialty Pharma Firm" . Daily
Finance. Retrieved June 10, 2015.
25. Dinah Wisenberg Brin, "Cardinal
Health to Purchase Kinray" , Wall
Street Journal, November 19, 2010
26. Wartenberg, Steve (March 3, 2015).
"Cardinal Health to acquire Cordis for
 $1.9 billion" . The Columbus
Dispatch. Retrieved June 10, 2015.
27. "Cardinal Health to Buy J&J's Heart
Business for $1.94B" . Fox Business.
March 2, 2015. Archived from the
original on June 11, 2015. Retrieved
June 10, 2015.
28. Health, Cardinal. "Cardinal Health
Completes Acquisition Of Cordis" .
www.prnewswire.com. Retrieved
14 April 2018.
29. "Jones Day - Cardinal Health acquires
Tradex International" . jonesday.com.
Retrieved 14 April 2018.
30. "Cardinal Health to Acquire Leading
Patient Product Portfolio from
Medtronic for $6.1 Billion" .
ir.cardinalhealth.com. Retrieved
2017-08-03.
31. "Cardinal Health Completes
Acquisition of Medtronic's Patient
Recovery Business" .
ir.cardinalhealth.com. Retrieved
2017-08-03.
32. "Cardinal Health Revenue 2006-2018 |
CAH" . www.macrotrends.net.
Retrieved 2018-11-05.
33. "Fortune 500 Companies 2018: Who
Made the List" . Fortune. Retrieved
 2018-11-09.
34. "Scion Asset Management 13F
Holdings" . Fintel. Retrieved
2018-09-02.
35. "CARDINAL HEALTH INC - 10-Q
Quarterly Report" .
36. Burton, Thomas M. (September 14,
2004). "Cardinal Health to Restate
Net, Citing Bulk-Revenue
Accounting" . The Wall Street
Journal. The Wall Street Journal.
Retrieved May 17, 2016.
37. "Cardinal Health Suspends
Production of Alaris SE Infusion
Pump Following FDA Actions" .
 Cardinal Health. August 28, 2006.
Retrieved June 13, 2018.
38. Schoenberg, Tom (2012-02-29).
"Cardinal Health Blocked From
Shipping Painkiller in Florida" .
Bloomberg. Retrieved 2012-09-01.
39. Donna Leinwand Leger "DEA aims big
in Cardinal Health painkiller case"
USA Today Feb 27, 2012 [1]
40. Donna Leinwand Leger "Judge blocks
Cardinal Health drug shipments in
Fla." USA Today Deb 29, 2012 [2]
41. Lenny Bernstein; Scott Higham (22
October 2016). "Investigation: The
DEA slowed enforcement while the
 opioid epidemic grew out of control" .
The Washington Post. Retrieved
17 March 2017.
42. "Cardinal Health Announces Civil
Settlement with DOJ" .
ir.cardinalhealth.com. Retrieved
14 April 2018.
43. S. 483 , 114th Cong. (2015).
44. Dutton, Melissa Kossler (April 13,
2011). "Benefactor of the Year:
Cardinal Health Inc" . Columbus
Business First. Retrieved June 10,
2015.
45. "Cardinal Health Foundation invites
healthcare providers to apply for
 grants to improve patient safety,
efficiency" . Healthcare Finance.
October 13, 2011. Retrieved June 10,
2015.
46. "Financial Statements for Cardinal
Health, Inc. - Google Finance" .
Google.com. Retrieved October 25,
2016.
47. Sutherly, Ben (February 11, 2015).
"Hospital safety initiative helps Ohio
kids" . The Columbus Dispatch.
Retrieved June 10, 2015.

External links
Official website
 Business data for Cardinal Health Inc:
Google Finance •Yahoo! Finance •

Reuters •SEC filings

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