Cardinal Health 2011 Annual Report Download - page 28

PART I
I
tem
1
:Bu
s
in
ess
G
eneral
Car
di
na
l
Hea
l
t
h
, Inc.
i
sanO
hi
o corporat
i
on
f
orme
di
n 1979. As use
di
nt
hi
s report, “we,” “our,” “us” an
d
s
i
m
il
ar pronouns re
f
er to Car
di
na
l
Hea
l
t
h
, Inc. an
di
ts su
b
s
idi
ar
i
es, un
l
ess t
h
e context requ
i
res ot
h
erw
i
se. We are
a
healthcare services compan
y
providin
g
products and services that help pharmacies, hospitals, sur
g
er
y
centers,
p
h
ys
i
c
i
an o
ffi
ces an
d
ot
h
er
h
ea
l
t
h
care prov
id
ers
f
ocus on pat
i
ent care w
hil
ere
d
uc
i
ng costs, en
h
anc
i
ng e
ffi
c
i
ency
a
n
di
mprov
i
ng qua
li
ty.
O
ur
fi
sca
l
year en
d
s on June 30. Re
f
erences to
fi
sca
l
2011, 2010 an
d
2009 are to t
h
e
fi
sca
l
years en
d
e
d
J
une 30, 2011, 2010 an
d
2009, respect
i
ve
ly
. Except as ot
h
erw
i
se spec
ifi
e
d
,
i
n
f
ormat
i
on
i
nt
hi
s Form 10-K
i
s
p
rovided as of June 30, 2011.
Business
S
egments
Th
e
f
o
ll
ow
i
n
gb
us
i
ness
di
scuss
i
on
i
s
b
ase
d
on our two se
g
ments as t
h
e
y
were structure
df
or
fi
sca
l
2011.
Ph
armaceutica
l
Segmen
t
I
nt
h
eUn
i
te
d
States, t
h
eP
h
armaceut
i
ca
l
segment:
• distributes branded and
g
eneric pharmaceutical, over-the-counter healthcare, and consumer product
s
t
hrou
g
h its pharmaceutical distribution business to retailers (includin
g
chain and independent dru
g
s
tores an
d
p
h
armacy
d
epartments o
f
supermar
k
ets an
d
mass merc
h
an
di
sers),
h
osp
i
ta
l
s, an
d
a
l
ternat
e
c
are providers (includin
g
mail order pharmacies). This business:
•
maintains prime vendor relationships that streamline the purchasin
g
process resultin
g
in
g
reate
r
e
ffi
c
i
ency an
dl
ower costs
f
or our customers
.
•h
e
l
ps p
h
armaceut
i
ca
l
manu
f
acturers w
i
t
h
serv
i
ces
i
nc
l
u
di
ng
di
str
ib
ut
i
on,
i
nventory management,
data/reportin
g
, new product launch support, and contract and char
g
eback administration.
• operates nuclear pharmacies and c
y
clotron facilities that manufacture, prepare and deliver
r
a
di
op
h
armaceut
i
ca
l
s
f
or use
i
n nuc
l
ear
i
mag
i
ng an
d
ot
h
er proce
d
ures
i
n
h
osp
i
ta
l
san
d
c
li
n
i
cs;
•
di
str
ib
utes spec
i
a
l
ty p
h
armaceut
i
ca
l
pro
d
ucts an
d
prov
id
es serv
i
ces to p
h
armaceut
i
ca
l
manu
f
acturers
,
t
hird-part
y
pa
y
ors and healthcare service providers supportin
g
the marketin
g
, distribution, and pa
y
ment
f
or spec
i
a
l
ty p
h
armaceut
i
ca
l
pro
d
ucts
;
•
f
ranc
hi
ses reta
il
p
h
armac
i
es un
d
er t
h
eMe
di
c
i
ne S
h
opp
e
®
a
n
d
Me
di
ca
p
®
b
ran
d
s
;
an
d
• prov
id
es p
h
armac
y
serv
i
ces to
h
osp
i
ta
l
san
d
ot
h
er
h
ea
l
t
h
care
f
ac
ili
t
i
es
.
I
nC
hi
na, t
h
eP
h
armaceut
i
ca
l
segment
di
str
ib
utes
b
ran
d
e
d
, gener
i
can
d
spec
i
a
l
ty p
h
armaceut
i
ca
l
saswe
ll
as
medical, sur
g
ical, over-the-counter and consumer products throu
g
h our Yon
g
Yu subsidiar
y
. Yon
g
Yu is one o
f
the lar
g
est importers of pharmaceuticals into China and reaches a wide ran
g
e of customers includin
g
more tha
n
49,000
h
osp
i
ta
l
san
d
c
li
n
i
cs an
d
more t
h
an 123,000 reta
il
out
l
ets
.
T
he pharmaceutical distribution business
g
enerates
g
ross mar
g
in primaril
y
when the a
gg
re
g
ate sellin
g
price
to our customers excee
d
st
h
e aggregate cost o
f
pro
d
ucts so
ld
, net o
f
manu
f
acturer cas
hdi
scount,
b
ran
d
e
d
manufacturer mar
g
in, and
g
eneric manufacturer mar
g
in
.
Manu
f
acturer cas
hdi
scounts are pr
i
ce re
d
uct
i
ons t
h
at manu
f
acturers may o
ff
er to us
f
or prompt payment o
f
purc
h
ase
d
pro
d
ucts.
2