Cardinal Health (NYSE:CAH)
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5 Years : From Apr 2012 to Apr 2017
A U.S. appeals court ruled Friday that a Cardinal Health Inc. (CAH) distribution hub in Florida can't ship prescription painkillers while the company battles a Drug Enforcement Administration move to suspend that facility's license.
While the appeals court recently issued a stay of the DEA's enforcement efforts against Cardinal's Lakeland, Fla., facility, the court on Friday said Cardinal hasn't met the "stringent requirements for an injunction." The decision means the Lakeland facility can't ship any controlled substances until the appeal is sorted out.
Cardinal, in a statement, said it activated contingency plans earlier this month "and will continue to endeavor to meet our customers' needs with minimal disruption from our other distribution centers."
Those contingency plans involve shipping controlled drugs to customers in the southeast U.S. from alternative facilities in Mississippi or North Carolina. Analysts have said the plans could add transportation costs to Cardinal and delay deliveries.
The suspension of the DEA license means the Lakeland facility is blocked from shipping controlled medications like the pain drug oxycodone to thousands of pharmacies, hospitals and other health care providers. Cardinal, the nation's No. 2 drug distributor by sales after McKesson Corp. (MCK), can still ship noncontrolled medications, whichi includes most prescription drugs, and certain supplies,such as surgical packs.
The DEA, which has tangled with Cardinal before amid efforts to battle prescription drug abuse, took action against the Lakeland facility last month while accusing Cardinal of not doing enough to stop oxycodone abuse. Cardinal has said that it supports the DEA's efforts, but also disagreed that it wasn't doing enough.
The DEA suspended licenses for three Cardinal centers in 2007 after narcotic painkillers were diverted to rogue pharmacies. The Dublin, Ohio, company has said it took responsibility back then, but has also invested heavily to improve its systems.
A U.S. District Court Judge ruled in late February that the government acted properly in trying to cut off shipments of oxycodone from the Lakeland site. Cardinal appealed that ruling in the U.S. Court of Appeals for the District of Columbia Circuit.
Cardinal shares traded down 10 cents to $41.60 late Friday.
-By Jon Kamp and Timothy W. Martin, Dow Jones Newswires; 617-654-6728; firstname.lastname@example.org