Cardinal Health CEO: Company Well-Positioned To Meet Changing Market Needs
Cardinal Health continues to build momentum to offset challenging industry trends and reports double-digit growth in its Medical segment for the first quarter of 2017. According to CEO George Barrett, the company is “well aligned” to suit the changing needs of a market moving towards value-based healthcare and holistic health solutions.
Profits for Cardinal’s pharmaceutical segment took a 19 percent dip, due to generic pricing and reduced levels of branded inflation, but these figures were offset by a 26 percent increase year-over-year in the company’s Medical segment profits, which include infection control, skin and wound management, cardiovascular devices, and patient monitoring solutions. Revenues for Medical were up 12 percent, to a total of $3.3 billion.
Barrett commented in a press release that first-quarter 2017 results were largely as expected, and short-term headwinds surrounding pharmaceuticals were “quite challenging.” However, he added that “metrics were strong in both reporting segments and our strategic positioning is well-aligned with the changing needs of the market,” especially as the population ages and the healthcare system evolves.
“The historically siloed or departmentally driven operating model is evolving to one that places a premium on operating coordination across the system,” said Barrett during an earnings call with analysts. “This is who we are. Our customers look to us for our integrated solutions to help them reduce costs, increase efficiency and improve quality.
Barrett mentioned an exclusive distribution deal Cardinal Health signed with Biosensors in May, which will expand its portfolio of cardiovascular offerings by allowing Cordis to distribute a line of drug-eluting stents in certain markets. The integration of Cordis — acquired From J&J in 2015 —has continued to move smoothly, and Cordis continues to offer additional partnership opportunities, said Barrett.
Last year, Barrett spoke about the “modernization” of Cardinal Health’s portfolio, looking to at-home care and value-based payments as the future of the healthcare model, a strategy that the company continued to build upon in 2016 with solutions that help providers and payers manage the complex process of hospital discharge.
“Every day, we serve customers focusing more on the total care of the patient and they recognize the growing shift to value-based reimbursement models,” said Barrett, talking to analysts. “While we are operating today in a tough and unique environment, we believe we are well-prepared to lead and quick to adapt by working with our customers holistically.”
Mike Kaufmann, Cardinal Health CFO, commented during the call that M&A activity will “remain disciplined,” and that the company’s pipeline is in good shape, particularly recent expansions in the Medical segment. “Broad portfolio and balanced capital deployment will allow us to drive long-term sustainable growth,” said Kaufmann.