Cardinal Health and Industry Competition the Pharmaceutical Essay

Cardinal Health and Industry Competition

The pharmaceutical and generic drug industries are highly competitive and, simultaneously, tremendously risk oriented. Both of these characteristics are significantly present in the current outlook for Cardinal Health. The producer of generic drugs is a Fortune 500 company which, according to Leger (2012), pulls in roughly $103 billion in revenue on an annual basis. However, the company is also the target of fierce competition from fellow pharmaceutical giants such as the McKesson Corporation and Amerisource Bergen and is the target of troubling legal charges that threaten to impact both its reputation and its profitability. As the discussion here will demonstrate, the above-noted competitors have seized a relative competitive advantage over Cardinal Health. The discussion assesses the nature of the challenges thereby imposed upon Cardinal Health.

First and foremost among the challenges facing Cardinal Health is its own internal and legal crisis. At present, the company is facing a destructive indictment spearheaded by the Drug Enforcement Agency (DEA). According to charges against it, "the DEA accused Cardinal Health. . . Of endangering the public by selling excessive amounts of oxycodone to four Florida pharmacies. The charges came in an immediate suspension order served Feb. 3 when the agency suspended Cardinal's license to distribute controlled substances from its Lakeland, Fla., hub, which serves four states." (Leger, p. 1)

A litany of irregular procedures including accepting inordinate amounts of cash for prescriptions and logging exponentially greater sums of oxycodone sold than any other pharmacies in the nation demonstrate that Cardinal Health exploited lax Florida prescription drug laws in order to profit from the addictive properties of its generic pain-killer. In doing so, Cardinal Health has created a number of monumental obstacles to be overcome in facing the competition of McKesson and Amerisource. Particularly, while the injunction against the Lakeland hub is currently on hold while Cardinal attempts to deflect legal charges, any interruption in its operation would be a significant impediment to the company's immediate profitability.

Additionally, it is clear that ethical failures on a number of levels are responsible for Cardinal Health's behavior. The case demonstrates the importance of a clearly defined and well-maintained sense of ethical propriety in the distribution of such substances as prescription painkillers. Indeed, the article by Leger reports that in concurrence with a tenfold spike in prescription painkiller sales, there has been a 5% spike in deaths resulting there from. Indications that Cardinal Health may have capitalized on such trends will undermine its reputation in….....