Cardinal Health (CAH) is taking necessary steps to maintain the supply of influenza vaccines during the forthcoming 2010-2011 flu season. For the first time, the Advisory Committee on Immunization Practices (ACIP) has been asking everyone over 6 months of age to get a flu vaccine. The company is of the opinion that the supplies are sufficient to meet the demand as a result of which everybody will have access to the vaccine. There is no need of prioritization.
The flu season of last year resulted in more than 270,000 hospitalizations and 12,000 deaths. However, the upcoming season should not be very severe due to the immunity developed from the last infection and availability of the flu vaccine. Moreover, the flu vaccine will target the H1N1 strain in addition to the seasonal influenza strain. According to Cardinal, hospital employees should be vaccinated early to protect patients hospitalized for other diseases.
Cardinal is one of the largest global healthcare companies that help pharmacies, hospitals and ambulatory care sites to focus on low-cost patient care. It is also a leading manufacturer of medical and surgical products. Cardinal has a diversified product portfolio – a natural hedge against the risk of revenue shortfall in a volatile economy.
The spin-off of CareFusion (CFN) has enabled Cardinal to increase focus on its core healthcare supply chain business. Moreover, Cardinal recently acquired privately-held specialty pharmaceutical services company Healthcare Solutions Holding for $667 million. The acquisition has expanded its foothold in the fast-growing specialty pharmaceutical services segment.
However, Cardinal is facing tough competition across all its business segments, which may pressure pricing. Its major competitors in the pharmaceutical supply chain segment are McKesson Corp. (MCK) and AmerisourceBergen Corp. (ABC). Cardinal is experiencing margin pressure in its pharmaceutical business, in part, due to competition. Moreover, a slowdown in certain sales channels (such as hospital and physician office channels) due to lower customer demand is also a concern.
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