Cardinal Health 2009 Annual Report Download - page 7

Before we review the year and look ahead to the future, I’d
like to recognize our retired chairman, Kerry Clark. The spino
underscores the work Kerry has done to strengthen and
re ne our portfolio of businesses, enabling a renewed focus
on the core strengths of both the ‘new’ Cardinal Health and
CareFusion. His leadership and support have been critical
to the successful launch of both companies. And we extend
our best wishes to our former colleagues at CareFusion, as
they embark on an exciting new journey of their own.
I also want to acknowledge the steadfast commitment of
Cardinal Health employees. The past few years have brought
enormous change to our company. Through it all, our people
stood  rm in their desire to help our customers deliver the
care that is so critical to the communities they serve.
Fiscal 2009
The Healthcare Supply Chain Services segment, which
includes the majority of businesses that comprise the ‘new’
Cardinal Health, made good progress in  scal 2009. While
we still have work to do, I’m encouraged by our results.
Despite challenging economic conditions in  scal 2009, the
Healthcare Supply Chain Services segment increased revenue
by 10% to $95.7 billion. Segment pro t increased slightly by
0.4% to $1.3 billion, with the pro t contribution from revenue
gains, solid generics performance and medical supply chain
growth being o set by pharmaceutical contract repricings, the
impact from anti-diversion activities and bad-debt expense.
Within our pharmaceutical supply chain, we enhanced our
anti-diversion systems and processes to ensure they are
e ective at detecting the diversion of controlled substances,
while minimizing the burden on legitimate customers. Without
question, we will continue to focus on providing the safest and
most secure supply chain and making ongoing improvements
in this area, but I feel that the most signi cant challenges
of the past 18 months are largely behind us.
As we sought to balance our business mix, we increased
our focus on retail independent pharmacies, improved our
service levels and enhanced customer contract compliance,
particularly in generics, which resulted in us ending the year
with three consecutive quarters of growth in our non-bulk
business. We also saw 14% growth in our generics business
in the fourth quarter of  scal 2009, outpacing the market.
We achieved exceptional results in Nuclear Pharmacy Services
during  scal 2009. Our team skillfully managed through
supply issues and generic launches, while increasing pro t
by more than 20% for the full year. In July, we also expanded
our leading national network of nuclear pharmacies and
further enhanced our capabilities to manufacture positron
emission tomography (PET) agents for use in clinical
trials and commercial applications, which is an area of
strong growth within the nuclear pharmacy industry.
The medical supply chain businesses that serve hospitals,
ambulatory care sites and clinical laboratories ended
 scal 2009 with solid top- and bottom-line growth,
creating a strong foundation for  scal 2010.
This is an extraordinary time for healthcare providers, with
ever increasing pressure on both costs and reimbursements,
and we are well positioned to help our customers be
more cost-e ective. For example, we established alliances
with leading healthcare technology providers to better
serve our customers with the addition of data cleansing
services to help hospitals manage spend and electronic
health record software for physician practices.