Cardinal Health
| Company type | Public |
|---|---|
| Industry | Health care services |
| Founded | 1971 |
| Founder | Robert D. Walter |
| Headquarters | Dublin, Ohio , United States |
Area served | United States |
Key people | Michael Kaufmann (CEO) |
| Products | Pharmaceutical distribution, medical and surgical supplies, radiopharmacy network |
Number of employees | 48,900 (2024) |
| Website | www |
Cardinal Health, Inc. is a U.S.-based multinational company specializing in health care services, ranking as the 14th largest revenue generator within the United States. Headquartered in Dublin, Ohio, the firm focuses on distributing pharmaceuticals and medical products, catering to more than 100,000 sites nationwide. Its manufacturing portfolio includes medical and surgical supplies such as gloves, surgical garments, and devices for fluid management. Additionally, Cardinal Health operates one of the most extensive radiopharmacy networks across the U.S., supplying medical products to over 75% of American hospitals.
History
Established in 1971 by Robert D. Walter under the name Cardinal Foods, the enterprise originally concentrated on food wholesale distribution. The acquisition of Bailey Drug Company in 1979 marked a strategic pivot toward pharmaceutical distribution. The company debuted on NASDAQ in 1983. By 1988, Walter divested the food division to Roundy's. From 1991 through 1996, revenues soared from $1.2 billion to $8.9 billion. Renamed Cardinal Health in 1994, the company ascended to become the third-largest pharmaceutical wholesaler in the U.S., reflecting its growth strategy centered on acquisitions and expanding market presence.
2000–2019
In April 2006, R. Kerry Clark, previously a Procter & Gamble executive and vice chairman, assumed the roles of president and CEO while Robert D. Walter remained chairman of the board. Both Clark and Walter retired in September 2008, with George S. Barrett stepping into the positions of chairman and CEO.
The clinical and medical products division was spun off in 2009 as CareFusion, an independent medical technology firm led by CEO David Schlotterbeck. Cardinal Health continues its public trading on the NYSE under the ticker CAH.
In December 2013, Cardinal Health collaborated with CVS Caremark to establish Red Oak Sourcing, a venture dedicated to sourcing generic drugs within the U.S., which began operations in July 2014.
Between 2014 and 2016, Cardinal Health joined forces with McKesson Corporation and AmerisourceBergen to invest $13 million lobbying Congress for passage of the "Ensuring Patient Access and Effective Drug Enforcement Act," legislation that reduced regulatory pressures on drug distributors; this act was signed into law in April 2016.
Michael Kaufmann took over as CEO in January 2018 after serving as CFO, guiding the company's continued strategic growth.
Opioid lawsuits
Cardinal Health was named among several pharmaceutical distributors involved in litigation related to the opioid epidemic in 2019. In July 2021, it agreed to participate in a $26 billion settlement alongside other industry players, committing $6.4 billion payable over an 18-year period.
In May 2020, Oklahoma's Attorney General filed suit against Cardinal Health, AmerisourceBergen, and McKesson, accusing them of distributing opioids sufficient for every adult in Bryan County to receive 144 hydrocodone tablets.
2020–present
As of August 2021, Cardinal Health held the 14th position on the Fortune 500 list with fiscal year 2020 revenues totaling $152.9 billion and maintained a workforce of approximately 48,000 employees worldwide.
Acquisitions
Cardinal Health has strategically expanded its market footprint and diversified its operations through numerous acquisitions. Its first non-distribution purchase was Medicine Shoppe International in 1995. The following year saw acquisition of Pyxis Corporation for $867 million, enhancing hospital automation solutions.
In 1997, it acquired Owen Healthcare—the second-largest pharmacy management service provider in America—and pursued Bergen Brunswig Corp., which later merged with AmerisourceBergen. The company further expanded by acquiring Chicago-based Allegiance Healthcare in 1999 and bolstered pharmaceutical wholesale capabilities with Bindley Western Industries in 2001.
Growth continued with the $40.1 million purchase of ParMed Pharmaceuticals in 2006 and VIASYS Healthcare for $1.5 billion in 2007. In 2010, Cardinal Health acquired Healthcare Solutions Holding for $517 million along with Kinray, increasing its footprint among independent pharmacies by roughly 40%. Between 2010 and 2014, it completed acquisitions of eighteen companies including Yong Yu—a Chinese drug distributor later sold in 2017 for $1.2 billion.
The partnership with CVS launched Red Oak Sourcing in 2014 to lead domestic generic drug procurement efforts. In 2015, Cardinal purchased Johnson & Johnson’s Cordis division for $1.94 billion but divested it to private equity firm Hellman & Friedman for $1 billion in 2021.
In a significant transaction during 2017, Cardinal acquired Medtronic’s patient product portfolio for $6.1 billion within months of announcement. Most recently, April 2024 marked completion of a $1.1 billion acquisition of Advanced Diabetes Supply Group (ADSG), integrating it into Cardinal’s at-Home Solutions segment to enhance direct-to-patient diabetes supply offerings.
Involvement in the Opioid Crisis
Cardinal Health has been involved in several legal resolutions concerning its participation in the opioid crisis across the United States, all without admitting fault:
- In December 2016, the company resolved allegations related to violations of the Controlled Substances Act by paying $44 million, following claims from multiple U.S. Attorney districts.
- By July 2021, Cardinal Health consented to a $6.4 billion settlement as a component of a broader $26 billion agreement alongside Johnson & Johnson, McKesson, and one other firm, addressing thousands of pending lawsuits.
- In May 2022, it settled a shareholder derivative lawsuit for $124 million.
- In August 2024, the company disbursed $92.7 million to conclude disputes involving health plans, insurers, and third-party payers.
- Also in August 2024, Cardinal Health reached a $152.5 million settlement with Baltimore city concerning ongoing opioid-related litigation.
These resolutions have had a notable effect on Cardinal Health’s financial standing and its reputation within the pharmaceutical distribution sector.
Financial Restatements
In September 2004, Cardinal Health disclosed that it would be revising downward its financial statements for fiscal years 2001 through 2003 and part of 2004 after an internal accounting review and federal inquiry. The company updated its consolidated financial reports for fiscal 2004 and earlier periods accordingly. Market analysts regarded these restatements as limited in scope but indicative of difficulties in the company’s financial reporting controls during those years.
FDA Enforcement
In August 2006, Cardinal Health halted production of its Alaris SE infusion pump following the seizure of roughly 1,300 units by the U.S. Food and Drug Administration (FDA). By February 2007, the company entered into a consent decree with the FDA to enhance safety protocols for the Alaris SE device. Subsequent FDA inspections led Cardinal Health to agree to an additional consent order in 2009.
DEA Probe into Oxycodone Diversion
In 2008, Cardinal Health agreed to pay $34 million in civil fines to resolve allegations from the DEA regarding failure to report suspicious orders of hydrocodone. This settlement followed a ten-month suspension imposed by the DEA on distribution centers located in Lakeland, Florida; New Jersey; and Washington state. On February 2, 2012, the DEA once again suspended the Lakeland facility’s license due to excessive oxycodone shipments to four pharmacies in Florida.
Despite obtaining a restraining order against this suspension, a federal court upheld it on February 29, citing an "imminent danger to the public." Cardinal Health reported having blocked two pharmacies and informed corporate owners of two CVS locations involved in these transactions.
In February 2012, Joseph Rannazzisi, head of the DEA’s Office of Diversion Control, issued immediate suspension orders targeting Cardinal’s oxycodone distribution to suspected pill mills. Following discussions between Deputy Attorney General James M. Cole and Rannazzisi about the investigation, Cardinal and the DEA agreed on a settlement that included a two-year suspension of painkiller sales from the Lakeland facility. The investigation culminated in a $44 million fine against Cardinal Health in 2016.
By January 2022, Cardinal Health joined Johnson & Johnson, McKesson, and AmerisourceBergen in consenting to pay $26 billion to resolve opioid-related lawsuits filed by most U.S. states. Should these cases have proceeded to trial, potential penalties might have reached $95 billion.
Finances
Presented below is a summary of key annual financial data:
| Year | Revenue (million USD$) |
Net income (million USD$) |
Total Assets (million USD$) |
Employees |
|---|---|---|---|---|
| 2005 | 72,666 | 4,460 | 21,838 | |
| 2006 | 79,664 | 4,814 | 23,433 | |
| 2007 | 86,755 | 5,197 | 23,154 | |
| 2008 | 87,408 | 3,777 | 23,448 | |
| 2009 | 95,992 | 3,748 | 25,119 | 29,600 |
| 2010 | 98,503 | 3,781 | 19,990 | 31,200 |
| 2011 | 102,644 | 4,162 | 22,846 | 31,900 |
| 2012 | 107,552 | 4,541 | 24,260 | 32,500 |
| 2013 | 101,093 | 4,921 | 25,819 | 33,600 |
| 2014 | 91,084 | 5,161 | 26,033 | 34,000 |
| 2015 | 102,531 | 5,712 | 30,142 | 34,500 |
| 2016 | 121,546 | 6,543 | 34,122 | 37,300 |
| 2017 | 129,976 | 6,544 | 40,112 | 40,400 |
| 2018 | 136,809 | 7,181 | 39,951 | 50,200 |
| 2019 | 145,534 | 1,363 | 40,963 | 31,000 |
| 2020 | 152,922 | |||
| 40,766 | 30,000 | |||
| 2021 | 162,467 | 611 | 44,453 | 47,300 |
| 2022 | 181,326 | |||
| "43,878" | "46,"500" | |||
| "2023" | "204,"979" | "330" | "43,"349" | "48,"000" |
| "2024" | "226,"827" | "852" | "45,"121" | }
Cardinal Health FoundationThe philanthropic division of the company is represented by the Cardinal Health Foundation. Annually donating over $9 million worth of products through international relief efforts and matching charitable donations from employees up to $1,000 per individual exemplify its commitment. Founded in 2008 with the launch of the E3 Grant Program aimed at assisting healthcare providers in enhancing patient safety and operational efficiency,<ref> the foundation has allocated upwards of $7.15 million to 241 hospitals and health-related organizations over a seven-year span. Moreover, Cardinal Health collaborates with entities such as Ronald McDonald House Charities and earned the Benefactor of the Year distinction at the 2011 Corporate Caring Awards. In 2015 alone, the foundation contributed $3 million towards the Solutions for Patient Safety initiative—a nationwide effort that has secured over $11 million to improve safety standards in pediatric hospitals. External links |
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