Leading distributor of pharmaceuticals and medical supplies Cardinal Health (CAH) recently revealed that in order to strengthen its support for environmental sustainability, it is taking part in Practice Greenhealth.
Practice Greenhealth is the country’s premier membership body for health care providers who are committed to environmental preservation. It provides a wide array of services to its enrollees, such as continued education, consultation, business solutions, training, networking and awards. Over 1,000 health care providers have enlisted in Practice Greenhealth over the last 3 years or so.
Cardinal Health’s latest move extends its role with Practice Greenhealth’s operating room initiative, whose goal is to cut down on the environmental impact of operating rooms in hospitals. In particular, Cardinal Health is assisting health care providers cut down on the volume of packaging used in surgeries by disseminating its Presource procedure packs. These packs convert individual supplies into procedure-based kits. These specially structured kits assist in cutting down trash by lowering the number of items not utilized in a procedure.
Cardinal Health is ranked on the Fortune 500. With $103 billion in sales, Cardinal Health remains one of the largest distributors of pharmaceuticals and medical supplies in the U.S., with a diversified product portfolio, which may partly insulate it from the current economic uncertainty. The company stands to gain from the gradual shift in mix from the bulk to the higher-margin non-bulk sector of the Pharmaceutical segment. It is also riding the generic wave. Overall, Cardinal is benefiting from a spate of tuck-in acquisitions and capital deployment strategies.
However, the company faces tough competition across all its business segments, which may continue to pressure pricing and margins. Its major competitors in the pharmaceutical supply chain segment include McKesson Corp. (MCK) and AmerisourceBergen Corp. (ABC). We currently have an Outperform long-term rating on Cardinal supported by a short-term Zacks #2 Rank (Buy).
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