Cardinal Health, Inc., an Ohio corporation formed in 1979, is a holding company
encompassing a number of operating subsidiaries that do business as Cardinal Health.
The Company is a leading provider of products and services supporting the health
care industry, and helping health care providers and manufacturers improve the
efficiency and quality of health care.
The Company has four reporting segments. They are: Pharmaceutical Distribution
and Provider Services, Medical Products and Services, Pharmaceutical Technologies
and Services and Automation and Information
Services.
PHARMACEUTICAL DISTRIBUTION AND PROVIDER SERVICES
Through its Pharmaceutical Distribution and Provider Services segment, the
Company distributes a broad line of pharmaceutical and other health care products
and provides pharmacy management and related consulting services to hospital,
retail and alternate-site pharmacies. The Companys Pharmaceutical Distribution
business is one of the countrys leading wholesale distributors of pharmaceutical
and related health care products to independent and chain drug stores, hospitals,
alternate care centers and the pharmacy departments of supermarkets and mass
merchandisers located throughout the United States.
MEDICAL PRODUCTS AND SERVICES
Through its Medical Products and Services segment, the Company provides medical
products and services and cost-saving services to hospitals and other health
care providers. For example, the Company offers a broad range of medical and
laboratory products, representing approximately 2,000 suppliers in addition
to its own line of surgical and respiratory therapy products to hospitals and
other health care providers.
PHARMACEUTICAL TECHNOLOGIES AND SERVICES
Through its Pharmaceutical Technologies and Services segment, the Company provides
a broad range of technologies and services to the pharmaceutical, life sciences
and consumer health industry. This segments Oral Technologies business provides
proprietary drug delivery technologies, including softgel capsules, controlled
release forms and Zydis(R) fast dissolving wafers, and manufacturing for nearly
all traditional oral dosage forms.
AUTOMATION AND INFORMATION SERVICES
The Company, through its Automation and Information Services segment, operates
businesses focusing on meeting customer needs through unique and proprietary
automation and information products and services. For example, this segment
develops, manufactures, leases, sells and services bedside clinical and patient
entertainment systems as well as point-of-use systems that automate the distribution
and management of medications and supplies in hospitals and other health care
facilities.
CUSTOMERS AND SUPPLIERS
The Companys largest retail distribution customer in its Pharmaceutical Distribution
and Provider Services segment, CVS Meridian, Inc. ("CVS"). The Company
could be adversely affected if the business of this customer were lost. The
two largest retail bulk distribution customers in the Pharmaceutical Distribution
and Provider Services segment are CVS and Walgreens Co.
COMPETITION
The markets in which the Company operates generally are highly competitive.
In the Pharmaceutical Distribution and Provider Services segment, the Companys
pharmaceutical wholesale distribution business competes directly with two other
national wholesale distributors (McKesson Corporation and AmerisourceBergen
Corporation) and smaller regional wholesale distributors, direct selling manufacturers,
self-warehousing chains and specialty distributors on the basis of a value proposition
that includes breadth of product lines, marketing programs, support services
and pricing.
In the Pharmaceutical Technologies and Services segment, the Company competes
on several fronts including competition with other companies providing outsourcing
services to pharmaceutical manufacturers as well as those manufacturers who
choose to handle these services in-house. Specifically, in this segment, the
Company competes as follows: the Oral Technologies business competes with providers
of both new drug delivery technologies and existing delivery technologies; the
Biotechnology and Sterile Life Sciences business competes with other providers
of sterile fill/finish manufacturing and lyophilization services; the Pharmaceutical
Development business competes with providers of contract discovery, development
and analytical laboratory services and manufacture and packaging of clinical
supplies; the Packaging Services business competes with companies that provide
packaging components and packaging services; and the Healthcare Marketing Services
business competes with other providers of medical education, marketing/product
launch services, contract sales and product logistics services.