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04/13/2021

Cardinal Health (NYSE: CAH) was awarded a $57.8 million contract, including options that if exercised by the U.S. Department of Health and Human Services (HHS) could reach $91.6 million, for the...

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Pivoting in a Pandemic
04/28/2021
We’re enabling technology solutions as never before, constantly innovating to better serve our customers and partners.

The COVID-19 pandemic has driven fast-paced, significant changes in the healthcare industry around the world. Cardinal Health has embraced these changes and ­– thanks to a deep commitment to its employees and its customers, a resilient business model and a constant focus on innovation and technology – is poised to be stronger than ever in a post-pandemic world, said CEO Mike Kaufmann at FORTUNE Brainstorm Health.

“We have learned so much during the pandemic, as a company and as an industry, about how to best serve our healthcare customers during a crisis,” Kaufmann said to FORTUNE Editor-in-Chief Clifton Leaf.

The initial challenge for Cardinal Health as the pandemic hit was two-fold: Being pushed into a work-from-home model for those who could work remotely and developing safety protocols overnight for its many essential workers.

Employees were able to pivot quickly – and learn new ways of doing business to continue to serve customers around the world, Kaufmann said. He focused on the following highlights during a virtual panel.

Re-thinking the supply chain: “In the early days of the pandemic, it was hard to even imagine the magnitude of need,” Kaufmann said. “The demand for gowns, masks and other personal protective equipment (PPE) that helps protect healthcare givers and their patients was two to 12 times that of what was available.

“Once products were in the United States, we were able to get them to customers very quickly,” he said, but the challenge was getting products through a disrupted global supply chain. At the start of the pandemic, for example, most medical gowns were made in China. The unprecedented need and the pandemic’s impact on China’s workforce meant that there simply were not enough gowns.

“We re-evaluated our entire supply chain to meet surging customer demand,” Kaufmann said. “We changed our sourcing practices to limit geographic concentration of products coming from a single country.” The company also expanded self-manufacturing capabilities to increase production capacity in isolation gowns, surgical and procedural masks, and face shields – all in North America. Those efforts will expand surgical and procedure mask capacity by 150 million masks annually, and increase safety needle capacity by 15 million units in our U.S. manufacturing facility.  

Video courtesy of Fortune

Using technology to meet needs: Prior to the pandemic, customers’ ordering demands determined where inventory flowed. But customer demand spiked with the pandemic, in part because customers, wanting to avoid any potential shortages, began buying speculatively.

In order to better match products with need, Kaufmann said, “We began using external data, including COVID-19 patient hospitalization tracking from the Centers for Disease Control and Prevention (CDC), to identify COVID-19 hotspots, and allocate products to those areas.”

Technology also allowed Cardinal Health to identify where hot spots were impacting product manufacturing, and quickly move procurement to other facilities.

Stockpiling critical products: Since the pandemic began, the company has increased inventory of certain products, so that it can quickly meet spikes in demand. Its “Stockpile as a Service” offering enables customers to store pandemic-related supplies at a Cardinal Health facility. Products from this stockpile are delivered within 72 hours of customer request.

In addition, Cardinal Health was recently awarded a $58 million contract to store and distribute 80,000 pallets of personal protective equipment (PPE) to support the Strategic National Stockpile (SNS), the country’s national repository of critical medical supplies, used to supplement state and local supplies in public health emergencies.

Increasing access to vaccines: Kaufmann highlighted the critical role that retail independent pharmacists play in the vaccine effort. For 60 percent of the rural communities and 52 percent of medically-underserved communities in the U.S., retail independent pharmacists serve as key healthcare providers. As a trusted local presence to their patients, pharmacists are essential in helping to overcome vaccine hesitancy.

Once the vaccines were available and patients rushed to get vaccinated, Kaufmann said, “We saw pharmacists struggle with the administrative logistics of scheduling so many vaccines. They needed to group patients into predictable visit times, and schedule as many people as possible given current (and at times unpredictable) vaccine availability.

“So we developed a COVID-specific digital solution called MyScheduling that allows independent pharmacists to schedule both vaccine doses (and enables patients to schedule their own appointments), creates waiting lists for patients not yet eligible for the vaccines, gathers patient information, and generates reports on daily appointments.” To date the MyScheduling tool has been rolled out to hundreds of pharmacies across the country.

Moving toward a post-pandemic future: Through the pandemic and beyond, Kaufmann said, Cardinal Health remains focused on both short- and long-term successes. After 50 years in business, the company has deep expertise as well as strong relationships with customers and partners. Just as significantly, “we know how to respond to disruption with innovation.

“Throughout the pandemic, we’ve been able to make positive changes. We’re enabling technology solutions as never before, and constantly innovating to make business processes better and more efficient, and better serve our customers and partners. We are in a position of strength, and well-prepared for the future.”

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