Cardinal Health 2010 Annual Report Download - page 34

The FDA and other domestic and foreign governmental agencies administer requirements covering the
design, testing, safety, effectiveness, manufacture, labeling, promotion and advertising, distribution and post
-
market surveillance of certain of our manufactured
p
roducts. We need s
p
ecific a
pp
roval or clearance fro
m
r
egulatory authorities before we can market and sell many of our products in particular countries. Even after w
e
o
btain approval or clearance to market a product, the product and our manufacturing processes are subject t
o
continued regulatory review.
To assess and facilitate compliance with federal, state and foreign regulatory requirements, we routinel
y
r
eview our quality and compliance systems to evaluate their effectiveness and to identify areas for improvement
o
r remediation. As part of our quality review, we assess the suppliers of raw materials, components and finished
goods that are incorporated into the medical devices we manufacture. In addition, we conduct quality
management reviews designed to highlight key issues that may affect the quality of our products and services.
From time to time, we may determine that products we manufacture or market do not meet our specifications,
r
egulatory requirements, or published standards. When we identify a quality or regulatory issue, we investigate
and take appropriate corrective action, such as withdrawing the product from the market, correcting the produc
t
at the customer location, revising product labeling, and notifying customers.
N
uclear pharmacies and related businesses. Our nuclear pharmacies and cyclotron facilities require licenses
o
r permits from the NRC, the radiologic health agency or department of health of each state in which we operate,
and the state board of pharmacy. In addition, the FDA regulates cyclotron facilities. The FDA issued regulations,
effective December 11, 2011, establishing current Good Manufacturing Practices for positron emissio
n
tomography (“PET”) drugs.
Prescri
p
tion Drug Pe
d
igree Trac
k
ing
S
tate and federal agencies are concerned about preventing the introduction of counterfeit, diverted
,
adulterated or mislabeled pharmaceuticals into the pharmaceutical supply chain. Some states have adopted or are
considering laws and regulations intended to protect the integrity of the pharmaceutical distribution system while
o
ther government agencies are currently evaluating their options. The FDA Amendments Act of 2007 requires
the FDA to establish standards to identify and validate technologies for securing the pharmaceutical supply chai
n
against counterfeit drugs. These standards may include track-and-trace or authentication technologies, such as
r
adio frequency identification devices and other similar technologies. In March 2010, the FDA issued guidanc
e
establishing standardized numerical identifiers (“SNI”) for prescription pharmaceutical packages.
I
n December 200
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, we entered into a settlement to resolve a civil investigation by the New York Attorney
G
eneral’s Office focusing on sales and purchases of prescription pharmaceuticals in the secondary market.
Pursuant to the settlement, we im
p
lemented a number of reforms within the
p
harmaceutical distribution business,
including requirements that customers who are wholesalers certify their compliance with our wholesaler saf
e
p
roduct
p
ractices
.
Hea
l
t
h
care Frau
d
an
d
A
b
use Laws
We are subject to extensive and frequently changing laws and regulations relating to healthcare fraud and
abuse. Laws and regulations generally prohibit us (and others in our industry) from soliciting, offering, receivin
g
o
r paying any compensation in order to induce someone to order or purchase items or services that are in any
way paid for by Medicare, Medicaid or other government-sponsored healthcare programs. We also cannot submit
o
r cause to be submitted any fraudulent claim for payment by the federal government. Certain of our subsidiarie
s
also maintain contracts with the federal government and are subject to regulatory requirements relating t
o
governmen
t
con
t
rac
t
ors.
Hea
l
t
h
In
f
ormation Practices
S
ervices and products provided by some of our businesses involve access to patient identifiable healthcar
e
information. In the past few years, federal and state officials have focused on the questions of how patient
8