Cardinal Health Adds to Warnings Over Drug Pricing

By Austen Hufford 

Cardinal Health Inc. became the latest drug distributor to warn that the slowing pace of drug-price increases would hurt results.

Chief Executive George Barrett said Monday that "short-term headwinds, particularly around pharmaceuticals, are quite challenging." Cardinal lowered its profit guidance for the year, citing generic pharmaceutical pricing and reduced levels of branded drug price increases.

The company now expects generic drug prices to fall in the mid-to-high single digits while expecting branded drugs to increase 7% to 9% in the year. It now forecasts annual earnings adjusted earnings per share of between $5.40 to $5.60, down from $5.48 to $5.73 previously.

Shares of many drugmakers, wholesale distributors and pharmacy-benefit managers were battered Friday as evidence emerged that drug companies aren't increasing prices as sharply as in previous years. Cardinal shares were inactive in premarket trading Monday after falling sharply on Friday along with the rest of the sector.

For the period ended Sept. 30, Cardinal Health reported a profit of $309 million, or 96 cents a share, down from $383 million, or $1.15 a share, a year prior. Excluding certain items, per-share earnings fell to $1.24 from $1.38.

Revenue increased 14% to $32.04 billion.

Analysts polled by Thomson Reuters expected per-share profit of $1.21 and revenue of $31.04 billion.

Pharmaceutical segment revenue climbed 15% to $28.80 billion, while medical segment revenue grew 14% to $3.3 billion.

Write to Austen Hufford at [e-mail]

(END) Dow Jones Newswires

October 31, 2016 08:14 ET (12:14 GMT)

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