Cardinal Health, Prime Therapeutics renew primary distribution agreement

Cardinal Health announced that it has signed a renewed, three-year agreement with Prime Therapeutics, one of the nation's leading pharmacy benefit managers, to continue to serve as its primary pharmaceutical supply chain partner for its mail-service pharmacy, PrimeMail.

Prime Therapeutics managed more than $10.2 billion in prescription drug spend in 2010, and currently serves nearly 17 million members through Blue Cross and Blue Shield Plans, employer and union groups and third-party administrators.

“We look forward to continuing to deliver the kind of flexible and innovative pharmaceutical distribution services that help Prime Therapeutics to efficiently and effectively serve its patients' medication needs,” said Jon Giacomin, president of Cardinal Health's US Pharmaceutical Distribution business. “This renewed agreement is an excellent example of our commitment to building mutually beneficial customer relationships that enable us to grow our pharmaceutical distribution business while also improving the overall costs of healthcare.”

Cardinal Health will also continue to offer Prime Therapeutics additional supply chain optimization services to help improve its operational efficiency.

“Our strong and flexible partnership with Cardinal Health has enabled us to leverage their operational excellence and economic value to cost-effectively purchase medications, while we also continue to engage and maximize our own direct generic purchasing,” said Peter Wickersham, Prime Therapeutics senior vice president of Cost of Care. “Cardinal Health consistently delivers the experience and value-added services that we need to help us to continue delivering quality, cost-efficient prescription drug benefits to our customers.”

Prime Therapeutics is a pharmacy benefit management company dedicated to providing innovative, clinically-based, cost-effective pharmacy solutions for clients and members.

Cardinal Health, Inc. helps pharmacies, hospitals, ambulatory surgery centers and physician offices focus on patient care while reducing costs, enhancing efficiency and improving quality.

Cardinal Health Acquires Leading Pharmaceutical Distributor in China

Cardinal Health today announced the completion of a $470 million acquisition of privately held Zuellig Pharma China, a leading health care distribution business in China, known locally as Yong Yu, and the largest pharmaceutical importer in the country. The transaction extends Cardinal Health's distribution and services presence into one of the world's fastest growing health care markets and provides a platform to drive long-term growth.

With today's closing, Cardinal Health is well positioned in the pharmaceutical distribution market in China, which is expected to grow at a compound annual growth rate of 20 percent through 2014 and become the second largest pharmaceutical market in the world after the United States.

"This is an exciting day for Cardinal Health," said George Barrett, chairman and chief executive officer of Cardinal Health. "The acquisition of Yong Yu follows an extensive evaluation of opportunities to drive growth in targeted geographies outside of North America where we believe our core capabilities would add value. China is an extraordinary market of enormous potential. We are proud to be able to participate in the ongoing evolution of the country's health care system and we are confident that Yong Yu will provide the ideal platform from which to grow our portfolio in China."

Established in 1993 and with annual sales of more than $1 billion, Yong Yu's geographic footprint covers 31 of the 34 provincial-level administrative units in China through its direct-to-customer distribution center network and its comprehensive network of wholesalers. Yong Yu's offerings span the full distribution value chain from importation to national supply chain management to local direct distribution to approximately 49,000 hospitals and clinics, and more than 123,000 pharmacies. The company also has a growing business distributing medical-surgical products.

Cardinal Health reports fiscal 1Q profit

Cardinal Health Inc. reported a profit on Thursday for its first fiscal quarter as the health care products distributor got a boost from a strengthened generic pharmaceutical program and reductions in some operating expenses.

The company said it has become more confident of its ability to achieve the higher end of its adjusted earnings guidance of $2.38 to $2.48 per share for fiscal 2011. Analysts expect $2.44 per share.

Its shares rose 65 cents, or 2 percent, to $34.06 in morning trading.

The Dublin, Ohio, company earned $294.8 million, or 84 cents per share, in the July-September quarter, compared to a loss of $38.2 million, or 11 cents per share, a year ago. Adjusted earnings were 64 cents per share, which trumped Wall Street expectation of 53 cents a share.

Revenue fell 1 percent to $24.4 billion from $24.8 billion a year ago. Analysts polled by Thomson Reuters expected higher revenue of about $25.1 billion in revenue.

Charges tied to the spinoff of a former business, medical technology company CareFusion Corp., weighed down Cardinal Health's first-quarter performance last year.

In this year's quarter, pharmaceutical segment revenue fell 1 percent to $22.3 billion due to reduced sales to bulk customers and contract terminations of two large-revenue customers. But generic sales rose 19 percent, and the company also saw increased sales to retail independent pharmacies.

Medical segment revenue fell 3 percent to $2.2 billion, largely due to commodity price increases and the revenue recognition in last year's quarter of $51 million for international sales to CareFusion.

"Although medical procedures remained somewhat soft during the period, we continue to make great progress in our program to position our medical businesses to serve the needs of these evolving markets," Chairman and CEO George Barrett said in a statement.

Cardinal Health also saw large drops in restructuring and employee severance expenses and impairments and loss on the sale of assets in the first quarter of fiscal 2011 compared to last year.

Cardinal Health raises outlook as profit beats

Pharmaceutical wholesaler Cardinal Health Inc (CAH.N) said its quarterly profit fell 23 percent from a year ago, hurt by lower prices and supply disruptions, but raised its full-year forecast.

Cardinal posted a net profit of $194 million, or 54 cents per share, for its fiscal fourth quarter, compared with a profit of $273.2 million, or 75 cents per share, a year ago.

Excluding items, the Dublin, Ohio-based company earned 50 cents per share, just beating analysts' average forecast of 49 cents per share, according to Thomson Reuters I/B/E/S.

Cardinal said segment profit in its pharmaceutical business, which makes up the bulk of its revenue, was hit by "lower branded inflation income, the year-over-year impact from customer pricing changes and supply disruptions in nuclear pharmacy."

Revenue for the quarter rose 0.5 percent to $24.5 billion, slightly missing analysts' average forecast of $24.68 billion.

"We have gained additional clarity regarding key inputs to our planning process since offering our preliminary 2011 outlook in April," CEO George Barrett said in a statement. "Based on our current information, we are raising our fiscal 2011 guidance for non-GAAP diluted EPS from continuing operations to a range of $2.38 to $2.48."

The company had previously forecast earnings of $2.35 to $2.45 per share, excluding items, for the fiscal year that began in July.