Cardinal Health: Success Despite Challenge

In 2006 Cardinal Health Inc. generated a revenue of $81 billion, making it “the most valuable company in the US healthcare industry and the world’s largest distributer of health care products”, (Teagarden, 2010). By 2011, they were listed within the top 20 of Forbes Fortune 500, (Teagarden, 2010). A leader in healthcare manufacturing and distribution, Cardinal Health continues to serve quality services, pharmaceuticals, and devices. Much of their success is attributed to business acquisition and new developments in information technology. This has helped Cardinal Health to become a worldwide dominating force in healthcare.

As the chief competitor in the healthcare, Cardinal Health Inc. wants to fulfill social responsibilities to the consumer. The company mission statement is, “to help customers across the healthcare industry – from manufacturers to patient care – find answers to the challenges they face”, (Teagarden, 2010). This motto was established in 1979 when their business began. Throughout the eras they took advantage of technology to meet the challenges faced by consumers. Cardinal Health developed distribution technologies, used online marketing and ecommerce to improve services, ease to access, and cost. This made things easy for the company and the consumer. It also adds value for the Cardinal customers and remains an influencing factor. They do this by focusing on customer satisfaction. It is seen in their, “a relentless pursuit of growth”, “push towards operational excellence”, and “leadership development”. To meet manufacture and supplier needs Cardinal Health conducts business in four health care segments. Doing this Cardinal Health established a competitive advantage over other leading distributors in the country. Slowly but surely, Cardinal Health has become significant figure in the healthcare industry.

Despite their success Cardinal Health faces many challenges in the pharmaceutical distribution of drugs. Common drugs like oxycodone, codeine, and Xanax have grown in use and popularity. These drugs are highly prescribed by doctors but also highly addictive. The addictiveness of the drug has spawned a drug epidemic. There is an increase of misuse, abuse, illegal redistribution, and criminal behavior as a result of these drugs. This has caused an increase of attention and government monitoring. In 2007, the DEA “suspended licenses for three Cardinal centers”, (Kamp, 2012). The backlash was millions lost and spent in court cost and fees. These problems have increased. The Wall Street Journal announced that the Cardinal Health distribution center in Florida may lose their licensing. According to the Columbus Dispatch, “two Florida CVS pharmacies have been blocked from selling controlled substances”, (Pavuk, 2012).  The article claims this happened after the pharmacy received an increase in pharmaceutical sales by 800%. Most recently in 2016, U.S Attorney, General Loretta Lynch, declared pharmaceutical drugs as a gateway drug. Lynch has petitioned the FDA for heightened awareness and regulation of pharmaceutical distribution. This is a problem along with a long list of others is just a string of events for Cardinal Health. Regardless, the business continues to strive for excellence against federal pressures.

To combat the problems Cardinal Health developed “vigorous and robust anti-diversion system” (Kamp, 2012). This system is to help monitor sales and distribution. It allows Cardinal Health to investigate prescriptions and sales of their drugs. However the system appears flawed as seen in continued allegations from the DEA. To stop the federal government from encroaching on the business, Cardinal Health applied for a restraining order and won. This allows Cardinal Health to continue manufacturing from their Florida facility to distribute pharmaceuticals across Florida, Georgia, and South Carolina. The challenges in pharmaceuticals have not stalled progression in other segments. Today’s Medical Development Journal announced that Cardinal Health has developed a new diagnostic procedure tray. In addition to new medical devices, CNN Money reported that Cardinal acquired two more pharmaceutical industries. These include “Kinray” and  “Zuellig Pharama China”, the country’s largest pharmaceutical importer”,  (“Fortune 500,” 2011).

A leader in the industry by acquisition, their ability to buy out both small and large companies is phenomenal. Teagarden determined that the company “absorbed 50 plus companies beginning in 1980”, (2010). By acquiring a large company like Witmire Distribution in 1994, Cardinal Health instantly became the third largest in pharmaceutical distribution. Other absorbed companies boosted Cardinal Health revenue to the largest in healthcare industry. This includes Medicine Shoppe International, “the largest manufacture of independent retail pharmacies” and Baxter’s Allegiance Division, “the largest manufacturer and distributor of medical, surgical, and lab supplies” (Teagarden, 2010). It is large absorptions such as these that make Cardinal Health the number one pharmaceutical manufacturer and distributor in the country.

 

 

References

(2012). Cardinal health introduces diagnostic procedure trays. TMD- Todays Medical Developments, Retrieved from http://www.onlinetmd.com/cardinal-health-trays-020612.aspx

Fortune 500. (2011, March 23). CNN Money. Retrieved from http://money.cnn.com/magazines/fortune/fortune500/2011/snapshots/3052.html

Kamp, J. (2012, Feburary 3). 3rd update: Cardinal health protest dea suspension for florida facility. Wallstreet Journal. Retrieved from http://online.wsj.com/article/BT-CO-20120203-715353.html

Pavuk, A. (2012, Feb 7). Dea raids cvs stores tied to cardinal health. Columbus Dispatch. Retrieved from http://www.dispatch.com/content/stories/business/2012/02/07/dea-raids-cvs-stores-tied-to-cardinal-health.html

Teagarden, M. (2010). Cardinal health inc. (a). In J. Pearce & R. Robinson (Eds.), Strategic            Management (pp. 18-2 – 18-16). NY, New York: McGraw-Hill/Irwin Publishing.

 

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About Russia Robinson

I am an independent freelance writer and free thinker. I strive to use my writing talents to benefit the greater good of society, one word, one sentence, one page at a time. Originally from Richmond, California I attended San Francisco State University receiving a BA in English Creative Writing and American Literature in 2004. After this I attended post graduate studies in 2008 at Georgia’s Kennesaw State University in Technical Writing. With an academic background in English, I have spent more than 10 years’ helping young people succeed. This can be seen in my career background in education and mental health. I am a certifiable Language Arts teacher for the state of Georgia. I also worked in social services including juvenile mental health treatment services and counseling. As a result, I understand the diversity of problems people face in their everyday lives. With words put together like so, I promote equality and a healthy society for all people regardless of individual differences. Conducting research, writing articles, essays, and blogging, I push to educate others about various issues that affect people. I also do this creatively through short stories, poems, pictures, and a novel in progress. My hobbies and interest are reading and learning. I enjoy all things art and all things nature. From camping and astronomy to photography and cooking, I enjoy sighting seeing and socializing just as much as I enjoy curling in bed with a good book or binge watching TV.
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