Summary
Cardinal Health, Inc. (CAH) filed an 8-K on March 1, 2012, to disclose a significant legal development regarding its distribution of controlled substances. A federal district court denied the company's motion for a preliminary injunction against the DEA's immediate suspension of its license to ship controlled substances from its Lakeland, Florida distribution center. While Cardinal Health disagrees with this decision and has filed an appeal, it has activated contingency plans to minimize disruption to its customers. Importantly, despite this setback, Cardinal Health stated it is not adjusting its previously issued non-GAAP EPS guidance range of $3.10-$3.20 for the fiscal year. The company emphasized its commitment to fighting prescription drug abuse through significant investments in anti-diversion systems and collaboration with various stakeholders, including stopping distribution to pharmacies identified as high-risk for diversion. Cardinal Health expressed a desire to work collaboratively with regulators on a more effective solution to combat prescription drug abuse without hindering legitimate medical use.
Key Highlights
- 1Federal district court denied Cardinal Health's motion for a preliminary injunction against the DEA's suspension of its license to ship controlled substances from its Lakeland, FL distribution center.
- 2Cardinal Health disagrees with the court's decision and has filed an appeal with the U.S. Court of Appeals for the D.C. Circuit.
- 3The company has activated contingency plans to manage potential disruptions to customer needs.
- 4Despite the legal challenges, Cardinal Health is reiterating its previously issued non-GAAP EPS guidance of $3.10-$3.20.
- 5The company highlighted its extensive efforts and investments in combating prescription drug abuse and preventing drug diversion.
- 6Cardinal Health has ceased distribution to hundreds of pharmacies deemed to pose an unreasonable risk of diversion.