07.22.14
$10.06 Billion ($101.1 B total)
KEY EXECUTIVES:
George S. Barrett, Chairman & CEO
Jeffrey W. Henderson, Chief Financial Officer
Donald M. Casey Jr., CEO, Medical Segment
Lisa, Ashby, President, Medical Devices & Diagnostics
Mike Duffy, President, Medical Consumables
John Rademacher, President, Ambulatory Care
Michael Petras, President, AssuraMed, Medical Segment
Mark R. Blake, Exec. VP, Strategy & Corporate Development
Craig S. Morford, Chief Legal & Compliance Officer
Mark E. Rosenbaum, Chief Customer Officer
NO. OF EMPLOYEES: 33,000
GLOBAL HEADQUARTERS: Dublin, Ohio
When you think of Cardinal Health, it’s a safe bet that food isn’t the first thing that pops into your mind. But food is exactly how the multibillion-dollar healthcare company got its start. In 1971, company founder Robert D. Walter opened a small distribution center in Columbus, Ohio. In less than a decade, the then-named Cardinal Foods became a prominent regional food distributor until branching into pharmaceutical distribution in 1979. The rest, as the trite old saying goes, is history.
Food distribution may no longer be the company’s bread and butter, but the firm still has a lot on its plate.
Dublin, Ohio-based Cardinal Health separates its business into two categories: Pharmaceutical and Medical.
The Pharmaceutical segment consolidates pharmaceuticals from hundreds of manufacturers into site-specific deliveries to retail pharmacies, hospitals, mail-order facilities, physician offices, surgery centers and long-term and other alternate care facilities. The company also operates the world’s largest network of nuclear pharmacies and is expanding its positron emission tomography agent manufacturing capabilities to support new drug development and personalized medicine. In addition, about 200 U.S. hospitals outsource the management of their inpatient pharmacies to Cardinal Health.
The company’s Medical unit makes and distributes medical, surgical and laboratory products to hospitals, ambulatory surgery centers, clinical laboratories, physician offices and other healthcare providers in the United States, Canada and China and to U.S. patients in the homecare setting.
This area of the business also sources and develops its own line of private-brand medical and surgical products. Manufactured products include single-use surgical drapes, gowns and apparel; exam and surgical gloves; and fluid suction and collection systems. The division also assembles sterile and non-sterile procedure kits. The division also provides supply chain services, including spend management, distribution management and inventory management services, to healthcare providers.
To succeed in today’s healthcare market place, companies must position themselves as more than just providers or a single good or service. The value proposition comes from being a problem-solver for physicians and hospitals—not just providing safe and effective devices or drugs, but also finding ways to save the healthcare system money and/or time in the longer term.
That’s a niche Cardinal Health strives to occupy. That said, healthcare markets in the United States are evolving and volatile—particularly in commodity-driven product and service categories.
For fiscal year 2013 (ended June 30, 2013) overall company revenue decreased 6 percent to $101.1 billion, mostly due, according Cardinal management, to the expiration of a pharmaceutical distribution contract and the impact of some pharmaceuticals transitioning from brand names to generic. Earnings from continuing operations decreased 69 percent to $335 million due to an $829 million non-cash goodwill impairment charge related to the company’s Nuclear Pharmacy Services division. Pharmaceutical revenue was $91.1 billion, down 7 percent for the year.
Medical segment revenue increased 4 percent to $10.1 billion, and segment profit increased 12 percent to $372 million. According to the company, the principal drivers for the increase in fiscal 2013 over fiscal 2012 were the positive impact of acquisitions and decreased cost of commodities used in self-manufactured products, partially offset by pricing changes driven in part by customers and product mix. Officials also pointed to the 2.3 percent medical excise tax on certain manufactured or imported medical devices that became effective at the beginning of the year as having a “slightly unfavorable impact” on the medical segment’s profit.
Sharing the Love
The biggest news for Cardinal’s Medical division in 2013, was a purchase announced on Valentine’s Day. The company unveiled plans for $2.07 billion sweetheart deal to acquire privately held AssuraMed of Twinsburg, Ohio.
Cardinal funded the purchase with a combination of cash and $1.3 billion in debt loaned by Bank of America. The deal closed in April.
Cardinal Health Chairman and CEO George Barrett said the purchase marks a “natural extension” of his company’s business and will enable the firm to offer its products to the growing number of home healthcare customers. The global market for home healthcare products and services is expected to reach $372 billion by 2015.
Founded in 1928 in Garfield Heights, Ohio, (a Cleveland suburb), AssuraMed provides medical supplies to home-based patients suffering from diabetes, incontinence, respiratory conditions, urological disorders, wounds and other chronic ailments. The company generated $1 billion in sales and currently serves more than 1 million patients nationally with more than 30,000 products. In January of 2013, it finalized the $150 million acquisition of Elyria, Ohio-based home and long-term care medical product provider Invacare Corp.
“AssuraMed is a natural extension of the Cardinal Health businesses and of our mission to be essential to care. The acquisition allows us to serve the growing number of Americans treated in home settings—particularly those patients recovering from acute episodes and those suffering with chronic diseases,” Barrett said. “This is a platform opportunity for Cardinal Health products and services which will be increasingly important as the delivery of care migrates to more cost-effective settings. It has been a central component of our strategy to help enable the healthcare system by serving patients throughout the continuum of care. This acquisition further aligns us with key trends including demographic shifts and increased consumerism.”
AssuraMed operates through two separate businesses, Independence Medical and Edgepark Medical Supplies. In addition to broadening Cardinal Heath’s reach into the home, AssuraMed’s expertise in products for specific disease categories and small parcel logistics is expected to help Cardinal Health serve customers across the broad ambulatory care channel, including care sites such as physician offices and in support of home health agencies.
“We are excited about becoming part of Cardinal Health. Cardinal Health has a long tradition in providing healthcare solutions to its customers and we know this expertise will enable AssuraMed to move even farther and faster in building out our home care business,” said Michael Petras, former CEO AssuraMed who became part of Cardinal’s management team.
KEY EXECUTIVES:
George S. Barrett, Chairman & CEO
Jeffrey W. Henderson, Chief Financial Officer
Donald M. Casey Jr., CEO, Medical Segment
Lisa, Ashby, President, Medical Devices & Diagnostics
Mike Duffy, President, Medical Consumables
John Rademacher, President, Ambulatory Care
Michael Petras, President, AssuraMed, Medical Segment
Mark R. Blake, Exec. VP, Strategy & Corporate Development
Craig S. Morford, Chief Legal & Compliance Officer
Mark E. Rosenbaum, Chief Customer Officer
NO. OF EMPLOYEES: 33,000
GLOBAL HEADQUARTERS: Dublin, Ohio
When you think of Cardinal Health, it’s a safe bet that food isn’t the first thing that pops into your mind. But food is exactly how the multibillion-dollar healthcare company got its start. In 1971, company founder Robert D. Walter opened a small distribution center in Columbus, Ohio. In less than a decade, the then-named Cardinal Foods became a prominent regional food distributor until branching into pharmaceutical distribution in 1979. The rest, as the trite old saying goes, is history.
Food distribution may no longer be the company’s bread and butter, but the firm still has a lot on its plate.
Dublin, Ohio-based Cardinal Health separates its business into two categories: Pharmaceutical and Medical.
The Pharmaceutical segment consolidates pharmaceuticals from hundreds of manufacturers into site-specific deliveries to retail pharmacies, hospitals, mail-order facilities, physician offices, surgery centers and long-term and other alternate care facilities. The company also operates the world’s largest network of nuclear pharmacies and is expanding its positron emission tomography agent manufacturing capabilities to support new drug development and personalized medicine. In addition, about 200 U.S. hospitals outsource the management of their inpatient pharmacies to Cardinal Health.
The company’s Medical unit makes and distributes medical, surgical and laboratory products to hospitals, ambulatory surgery centers, clinical laboratories, physician offices and other healthcare providers in the United States, Canada and China and to U.S. patients in the homecare setting.
This area of the business also sources and develops its own line of private-brand medical and surgical products. Manufactured products include single-use surgical drapes, gowns and apparel; exam and surgical gloves; and fluid suction and collection systems. The division also assembles sterile and non-sterile procedure kits. The division also provides supply chain services, including spend management, distribution management and inventory management services, to healthcare providers.
To succeed in today’s healthcare market place, companies must position themselves as more than just providers or a single good or service. The value proposition comes from being a problem-solver for physicians and hospitals—not just providing safe and effective devices or drugs, but also finding ways to save the healthcare system money and/or time in the longer term.
That’s a niche Cardinal Health strives to occupy. That said, healthcare markets in the United States are evolving and volatile—particularly in commodity-driven product and service categories.
For fiscal year 2013 (ended June 30, 2013) overall company revenue decreased 6 percent to $101.1 billion, mostly due, according Cardinal management, to the expiration of a pharmaceutical distribution contract and the impact of some pharmaceuticals transitioning from brand names to generic. Earnings from continuing operations decreased 69 percent to $335 million due to an $829 million non-cash goodwill impairment charge related to the company’s Nuclear Pharmacy Services division. Pharmaceutical revenue was $91.1 billion, down 7 percent for the year.
Medical segment revenue increased 4 percent to $10.1 billion, and segment profit increased 12 percent to $372 million. According to the company, the principal drivers for the increase in fiscal 2013 over fiscal 2012 were the positive impact of acquisitions and decreased cost of commodities used in self-manufactured products, partially offset by pricing changes driven in part by customers and product mix. Officials also pointed to the 2.3 percent medical excise tax on certain manufactured or imported medical devices that became effective at the beginning of the year as having a “slightly unfavorable impact” on the medical segment’s profit.
Sharing the Love
The biggest news for Cardinal’s Medical division in 2013, was a purchase announced on Valentine’s Day. The company unveiled plans for $2.07 billion sweetheart deal to acquire privately held AssuraMed of Twinsburg, Ohio.
Cardinal funded the purchase with a combination of cash and $1.3 billion in debt loaned by Bank of America. The deal closed in April.
Cardinal Health Chairman and CEO George Barrett said the purchase marks a “natural extension” of his company’s business and will enable the firm to offer its products to the growing number of home healthcare customers. The global market for home healthcare products and services is expected to reach $372 billion by 2015.
Founded in 1928 in Garfield Heights, Ohio, (a Cleveland suburb), AssuraMed provides medical supplies to home-based patients suffering from diabetes, incontinence, respiratory conditions, urological disorders, wounds and other chronic ailments. The company generated $1 billion in sales and currently serves more than 1 million patients nationally with more than 30,000 products. In January of 2013, it finalized the $150 million acquisition of Elyria, Ohio-based home and long-term care medical product provider Invacare Corp.
“AssuraMed is a natural extension of the Cardinal Health businesses and of our mission to be essential to care. The acquisition allows us to serve the growing number of Americans treated in home settings—particularly those patients recovering from acute episodes and those suffering with chronic diseases,” Barrett said. “This is a platform opportunity for Cardinal Health products and services which will be increasingly important as the delivery of care migrates to more cost-effective settings. It has been a central component of our strategy to help enable the healthcare system by serving patients throughout the continuum of care. This acquisition further aligns us with key trends including demographic shifts and increased consumerism.”
AssuraMed operates through two separate businesses, Independence Medical and Edgepark Medical Supplies. In addition to broadening Cardinal Heath’s reach into the home, AssuraMed’s expertise in products for specific disease categories and small parcel logistics is expected to help Cardinal Health serve customers across the broad ambulatory care channel, including care sites such as physician offices and in support of home health agencies.
“We are excited about becoming part of Cardinal Health. Cardinal Health has a long tradition in providing healthcare solutions to its customers and we know this expertise will enable AssuraMed to move even farther and faster in building out our home care business,” said Michael Petras, former CEO AssuraMed who became part of Cardinal’s management team.