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Cardinal Health Resolves Controlled Substance License Suspensions

Friday, October 3, 2008 General News J E 4
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DUBLIN, Ohio, Oct. 2 Cardinal Health, a globalprovider of products and services that improve the safety and productivity ofhealth care, today announced agreements with the U.S. Drug EnforcementAdministration (DEA) and seven U.S. Attorneys' Offices that will result inreinstated licenses to distribute controlled substances from the company'sAuburn, Wash., Lakeland, Fla. and Swedesboro, N.J. distribution centers.

The administrative and civil settlement agreements also resolve all DEAclaims related to the company's controls against the diversion of controlledsubstances. Without admitting any wrongdoing, Cardinal Health also agreed topay a $34 million settlement payment, an amount the company fully reservedduring fiscal 2008.

"Protecting the integrity of the pharmaceutical supply chain is aresponsibility we take very seriously, and preventing prescription drug abuseis a public policy goal that Cardinal Health fully supports," said R. KerryClark, chairman and CEO. "We settled this matter so that we could quicklyresume the distribution of these vital medicines to our valued customers, andwe will continue to work with the DEA and other supply chain partners to takeall necessary steps to keep these powerful drugs out of the wrong hands."

Since November 2007, Cardinal Health has invested more than $20 million tosignificantly enhance its controls across its network to prevent the diversionof controlled substances and has worked diligently with the DEA to resolve thesuspensions.

Specifically, the company has expanded its training, implemented newprocesses, introduced an electronic system that identifies and blockspotentially suspicious orders pending further investigation, and enhanced theexpertise and overall staffing of its pharmaceutical distribution complianceteam. In addition, to strengthen its overall compliance practices, the companyhired former Acting Deputy U.S. Attorney General Craig Morford to an expandedrole as its chief compliance officer, reporting directly to Clark and to theaudit committee of the company's board of directors. Morford is responsiblefor regulatory, environmental health and safety compliance, as well as ethicsand enterprise risk management.

Cardinal Health is currently replenishing its controlled substanceinventories in its Auburn, Lakeland and Swedesboro facilities and will take aphased approach to restoring controlled substance shipments from eachfacility. The company expects to fully resume shipments of controlledsubstances from all three facilities by the end of November. Customers servedby these distribution facilities will be notified by Cardinal Health when theycan begin ordering and receiving controlled substance shipments.

In addition, on Sept. 29, the company lifted a voluntary suspension forits Stafford, Texas facility and resumed shipping controlled products tocustomers from that location.

About Cardinal Health

Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is a $91billion, global company serving the health care industry with products andservices that help hospitals, physician offices and pharmacies reduce costs,improve safety, productivity and profitability, and deliver better care topatients. With a focus on making supply chains more efficient, reducinghospital-acquired infections and breaking the cycle of harmful medicationerrors, Cardinal Health develops market-leading technologies, includingAlaris(R) IV pumps, Pyxis(R) automated dispensing systems, MedMined(TM)electronic infection surveillance service, VIASYS(R) respiratory care productsand the CareFusion(TM) patient identification system. The company alsomanufactures medical and surgical products and is one of the largestdistributors of pharmaceuticals and medical supplies worldwide. Ranked No. 19on the Fortune 500, Cardinal Health employs more than 40,000 people on fivecontinents. More information about the company may be found athttp://www.cardinalhealth.com

Cautions Concerning Forward-Looking Statements

This news release contains forward-looking statements addressingexpectations, prospects, estimates and other matters that are dependent uponfuture events or developments. These matters are subject to risks anduncertainties that could cause actual results to differ materially from thoseprojected, anticipated or implied. The most significant of theseuncertainties are described in Cardinal Health's Form 10-K, Form 10-Q and Form8-K reports (including all amendments to those reports) and exhibits to thosereports, and include (but are not limited to) the following: uncertaintiesregarding the decision to spin off Cardinal Health's clinical and medicalproducts businesses and regarding the impacts of such decision if the spin-offis accomplished; competitive pressures in Cardinal Health's various lines ofbusiness; the loss of one or more key customer or supplier relationships orchanges to the terms of those relationships; uncertainties relating to timingof generic and branded pharmaceutical introductions and the frequency or rateof branded pharmaceutical price appreciation or generic pharmaceutical pricedeflation; changes in the distribution patterns or reimbursement rates forhealth-care products and/or services; the results, consequences, effects ortiming of any inquiry or investigation by any regulatory authority or anylegal or administrative proceedings; future actions of regulatory bodies orgovernment authorities relating to Cardinal Health's manufacturing or sale ofproducts and other costs or claims that could arise from its manufacturing,compounding or repackaging operations or from its other services; difficultiesand uncertainties related to the integration of acquired businesses; andconditions in the pharmaceutical market and general economic and marketconditions. This news release reflects management's views as of Oct. 2, 2008.Except to the extent required by applicable law, Cardinal Health undertakes noobligation to update or revise any forward-looking statement.

SOURCE Cardinal Health, Inc.
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