CARDINAL HEALTH, Inc. GLOBAL OPERATIONS By Cornel Daniel Gherman GB 540:02 Economics for Global Decision Makers Dr.: Barbara-Leigh Tonelli October 10 th, 2011

The Company Fortune 19, $103 billion company Better, safer healthcare delivery Pharmaceutical segment Medical segment Employs more than 30,000 people worldwide

Global Operations Doing business in 29 countries across 6 continents It helps customers focus on patients while reducing costs Provides pharmaceuticals and medical products to more than 60,000 locations each day

The past Founded in 1971 as a food distributor In 1979 branched out into the pharmaceutical distribution 69 total companies acquired since its inception

The past From 2010 to 2011 there was a revenue increase Fiscal 2011 first-quarter revenue of $24.4 billion and non- GAAP diluted earnings per share (EPS) from continuing operations of $0.64, up 19 percent versus last year, driven by 42 percent segment profit growth within its Pharmaceutical Segment.

Current state According to PRNewswire dated 8/4/2011 Cardinal Health reported increases for the 4 th QT Fourth-quarter revenue increases 9 percent to $27 billion; Full-year revenue increases 4 percent to $103 billion

Current state Fiscal 2011 diluted earnings per share from continuing operations increase by 69 percent to $2.74, or 20 percent to $2.67 on a non-GAAP basis Fourth-quarter diluted earnings per share from continuing operations increase by 7 percent to $0.58, or 18 percent to $0.59 on a non-GAAP basis(1)

The future Cardinal Health is planning an expansion in more countries It recently purchased a pharmaceutical company in China The China Cardinal Health segment is expanding

The future Cardinal's size and diversity partly insulate it from economic cycles, and its generics business continues to grow at a healthy pace. The company continues to nurture its specialty platforms and engage in periodic tuck-in acquisitions.

Room for improving Client and supplier concentration and reliance on group purchasing organizations remain areas of concern.

Room for improving It needs to continue to build its suite of technology systems and services. Build relationships with other countries and try expanding in emerging economies.

New revenues Yong Yu, a company of Cardinal Health China, is a leading distributor of multinational pharmaceuticals in China.

New revenues The company acquired privately held Zuellig Pharma China, a health-care distributor and China's largest pharmaceuticals importer. Known locally as Yong Yu, with annual sales of more than $1 billion, marks the first major drug-distribution investment in Asia.

Old revenues In 2003 it purchased The Intercare Group, plc. A leading European pharmaceutical products and services company. Already operating in these countries: Germany, France, Spain, Italy, New Zeeland, Canada, Belgium, Australia, Netherlands, Puerto Rico, South Africa, Switzerland, United Kingdom, and others.

Old revenues The company's acquisitions of New York-area drug distributor Kinray and China-based distributor Yong Yu were in part responsible for the drop in profit. Also contributing to the earnings decline was a gain in the second quarter of 2009 from the sale of stock of CareFusion.

Forecast Fiscal 2012 outlook for non-GAAP diluted earnings per share of $3.04 to $3.19 based on new non-GAAP definition that excludes amortization of acquisition- related intangible assets(2); fiscal 2011 diluted EPS under new non-GAAP definition is $2.80 Cardinal Health is inquiring on purchasing more companies worldwide and expanding their services.

Strategic audit The company’s strategy is to increase the financial return on research investments for their clients by designing and implementing scientific regulatory strategies that decrease development time and increase market years for health care products.

Strategic audit Worldwide scientific regulatory strategy is characterized by attention to detail in the preparation of regulatory documents, while considering the current guidance documents of the FDA and the International Conference on Harmonization (ICH). This strategy has reduced development time and accelerated the movement of new products to worldwide commercialization.

Recommendations Improve technology and services operations Expand to more emerging countries Improve and expand to more locations around the United States

References Brin, D, W. (2010, November 30 th ). Cardinal Health buys chines distributor. The Wall Street Journal. Retrieved from revenues-provides-fiscal-2012-outlook htmlhttp:// revenues-provides-fiscal-2012-outlook html Cardinal Health Reports Strong Fiscal 2011 Growth on Record Revenues; Provides Fiscal 2012 Outlook. (2011, August 4 th ). PRNewswire. Retrieved from strong-fiscal-2011-growth-on-record-revenues-provides-fiscal-2012-outlook htmlhttp:// strong-fiscal-2011-growth-on-record-revenues-provides-fiscal-2012-outlook html Cardinal Health China. Cardinal Health to Expand Global Reach With Proposed Acquisition of Intercare. (October 29 th ). PRNewswire. Retrieved from acquisition-of-intercare htmlhttp:// acquisition-of-intercare html Glenn, B. (2010, November 30 th ). Has Cardinal Health started era of the global drug distributor? MedCity. Retrieved from distributor/ distributor/