About Cardinal Health Inc

Cardinal Health, Inc. operates as a global healthcare services and products company. The company provides customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices and patients in the home. It provides medical products and pharmaceuticals and solutions that enhance supply chain efficiency. Segments The company operates through two segments, Pharmaceutical and Medical. Pharmaceutical segment In the United States, the company’s Pharmaceutical segment: Through its Pharmaceutical Distribution division, distributes branded and generic pharmaceutical and over-the-counter healthcare and consumer products to retailers (including chain and independent drug stores and pharmacy departments of supermarkets and mass merchandisers), hospitals and other healthcare providers. This division maintains prime vendor relationships that streamline the purchasing process resulting in greater efficiency and lower costs for the company’s retail, hospital and other healthcare provider customers; provides services to pharmaceutical manufacturers, including distribution, inventory management, data reporting, new product launch support and chargeback administration; distributes specialty pharmaceutical products to hospitals and other healthcare providers and provides consulting, patient support and other services for specialty pharmaceutical products to pharmaceutical manufacturers and healthcare providers; provides pharmacy management services to hospitals and operates a limited number of pharmacies, including in community health centers; and repackages generic pharmaceuticals and over-the-counter healthcare products. Through its Nuclear and Precision Health Solutions division, operates nuclear pharmacies and manufacturing facilities, which manufacture, prepare and deliver radiopharmaceuticals for use in nuclear imaging and other procedures in hospitals and physician offices. This division also contract manufactures a radiopharmaceutical treatment (Xofigo) and holds the North American rights to manufacture and distribute Lymphoseek, a radiopharmaceutical diagnostic imaging agent. Pharmaceutical and Specialty Pharmaceutical Distribution and Services The company’s Pharmaceutical Distribution division’s gross margin includes margin from the company’s generic pharmaceutical program, from distribution services agreements with branded pharmaceutical manufacturers, including manufacturers of specialty pharmaceutical products, and from over-the-counter healthcare and consumer products. It also includes manufacturer cash discounts. Margin from the company’s generic pharmaceutical program includes price discounts, rebates and service fees from manufacturers and may in limited instances include price appreciation. The company’s earnings on generic pharmaceuticals are generally highest during the period immediately following the initial launch of a product, because generic pharmaceutical selling prices are generally highest during that period and tend to decline over time. Margin from distribution services agreements with branded pharmaceutical manufacturers is derived from compensation the company receives for providing a range of distribution and related services to manufacturers. The company’s compensation typically is a percentage of the wholesale acquisition cost that is set by manufacturers. In addition, under a limited number of agreements, branded pharmaceutical price appreciation, which is determined by the manufacturers, also serves as part of the company’s compensation. Specialty pharmaceutical products include oncology, rheumatology, urology, nephrology and other pharmaceutical products. Through the company’s Specialty division, the company also distribute human-derived plasma products to hospitals, dialysis clinics, physician offices and other healthcare providers. The company’s use of the term ‘specialty pharmaceutical products’ may not be comparable to the terminology used by other industry participants. The company also provide consulting, patient support, logistics, group purchasing and other services to pharmaceutical manufacturers and healthcare providers. Sourcing Venture with CVS Health Corporation Red Oak Sourcing, LLC (‘Red Oak Sourcing’), a U.S.-based generic pharmaceutical sourcing venture with CVS Health negotiates generic pharmaceutical supply contracts on behalf of both companies. The term of Red Oak Sourcing extends through June 2029. Medical segment The company’s Medical segment manufactures and sources Cardinal Health branded general and specialty medical, surgical and laboratory products and devices. These products include exam and surgical gloves; needle, syringe and sharps disposal; compression; incontinence; nutritional delivery; wound care; single-use surgical drapes, gowns and apparel; fluid suction and collection systems; urology; operating room supply; and electrode product lines. The company’s Cardinal Health Brand products are sold directly or through third-party distributors in the United States, Canada, Europe, Asia, and other markets. These products are generally higher-margin products. The Medical segment also distributes a broad range of medical, surgical and laboratory products known as national brand products and provides supply chain services and solutions to hospitals, ambulatory surgery centers, clinical laboratories and other healthcare providers in the United States and Canada; and this segment also assembles and sells sterile and non-sterile procedure kits. Through Cardinal Health at-Home Solutions, this segment also distributes medical products to patients' homes in the United States. The Medical segment, through its Wavemark division, also provides an automated technology platform for inventory management. The Medical segment, through its OptiFreight Logistics division, supports the shipping and logistic needs of healthcare providers by optimizing direct shipments through integrated technology solutions. Divestitures In June 2023, the company signed a definitive agreement to contribute the company’s Outcomes business to Transaction Data Systems (TDS), a portfolio company of BlackRock Long Term Private Capital and GTCR, in exchange for a minority stake in the combined entity. The transaction closed in July 2023. Customers The company’s largest customers, CVS Health and OptumRx, accounted for 25 percent and 16 percent of the company’s fiscal 2023 (the year ended June 30, 2023) revenue, respectively. In the aggregate, the company’s five largest customers, including CVS Health and OptumRx, accounted for 51 percent of the company’s fiscal 2023 revenue. The company has agreements with group purchasing organizations (‘GPOs’) that act as agents to negotiate vendor contracts on behalf of their members. The company’s two largest GPO relationships in terms of revenue are with Vizient, Inc. and Premier, Inc. Sales to members of these two GPOs, under numerous contracts across the company’s businesses, collectively accounted for 16 percent of the company’s revenue in fiscal 2023. Regulatory Matters The company sells its manufactured products in the United States, Canada, Europe, Asia, Latin America, and other markets. The FDA and other governmental agencies in the United States, as well as foreign governmental agencies, administer requirements that cover the design, testing, safety, effectiveness, manufacturing (including good manufacturing practices), quality systems, labeling, promotion and advertising (including restrictions on promoting or advertising a product other than for the product's cleared or approved uses), distribution, importation and post-market surveillance for most of the company’s manufactured products. The company is also subject to these requirements when the company sources certain Medical segment products from third-party manufacturers. Many of the company’s Medical segment branded products are cleared through the 510(k) process and certain products must be approved through the PMA process. In the EU, the company is required to obtain CE Mark Certification in order to market medical devices. The company is subject to various and evolving privacy laws and regulations in many jurisdictions. Because the company collects, handles and maintains patient-identifiable health information, the company is subject to laws that require specified privacy and security measures and that regulate the use and disclosure of such information, including the U.S. Health Insurance Portability and Accountability Act of 1996 (‘HIPAA’), as augmented by the Health Information Technology for Economic and Clinical Health Act, as well as state laws, in the United States. Internationally, the company is also subject to privacy and data protection laws that require significant compliance efforts, including the EU's General Data Protection Regulation (GDPR), Canada's Personal Information Protection and Electronic Documents Act, Japan's Act on the Protection of Personal Information, and China's Personal Information Protection Law, among many others. The company’s nuclear pharmacies and radiopharmaceutical manufacturing facilities (including for Xofigo) require licenses or permits and must abide by regulations issued by the U.S. Nuclear Regulatory Commission, applicable state boards of pharmacy and the radiologic health agency or department of health of each state in which the company operate, including pharmacy sterile compounding standards and practices. In addition, the company’s radiopharmaceutical manufacturing facilities also must comply with FDA regulations, including good manufacturing practices. Some businesses within each of the company’s segments are Medicare-certified suppliers or participate in other federal and state healthcare programs, such as state Medicaid programs and the federal 340B drug pricing program. These businesses are subject to accreditation and quality standards and other rules and regulations, including applicable reporting, billing, payment and record-keeping requirements. Similarly, the company is subject to the U.S. and foreign laws concerning the conduct of the company’s foreign operations, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and other foreign anti-bribery laws. Competition In the Pharmaceutical segment, the company competes with wholesale distributors with national reach, including McKesson Corporation and AmerisourceBergen Corporation. In the Medical segment, the company competes with many diversified healthcare companies and national medical product distributors, such as Medline Industries, Inc.; Owens & Minor, Inc.; and Becton, Dickinson and Company. History Cardinal Health, Inc., an Ohio corporation, was founded in 1979. The company was incorporated in 1979.

Country
Industry:
Drugs, Drug Proprietaries, and Druggists' Sundries
Founded:
1979
IPO Date:
08/04/1983
ISIN Number:
I_US14149Y1082
Address:
7000 Cardinal Place, Dublin, Ohio, 43017, United States
Phone Number
614 757 5000

Key Executives

CEO:
Hollar, Jason
CFO
Alt, Aaron
COO:
Data Unavailable