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About POGO's Federal Contractor Misconduct Database (FCMD)
The government awards contracts to companies with histories of misconduct such as contract fraud and environmental, ethics, and labor violations. In the absence of a centralized federal database listing instances of misconduct, the Project On Government Oversight (POGO) is providing such data. We believe that it will lead to improved contracting decisions and public access to information about how the government spends hundreds of billions of taxpayer money each year on goods and services. Report an instance of misconduct »
Ranking: 74
Cardinal Health, Inc.
Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is a $75 billion, global company serving the health-care industry. It manufactures, packages and distributes pharmaceuticals and medical supplies, provides clinical services, and develops products that improve the management and delivery of supplies and medication for hospitals, physician offices and pharmacies. Cardinal Health employs more than 55,000 people on six continents.
Federal Contract $: $1074.3m
Total Number of Instances: 4
Total Misconduct dollar amount: $ 643.0m
- Annual Report
- Ethics Page
- Hoovers Profile
- Lobbying Information
- Political Activity
- Press Page
- SEC 10K
- Contracting Information
- Website
Instances of Misconduct
1. In re Cardinal Health, Inc. Securities Litigation (Securities Fraud)
Plaintiffs, investors in Cardinal Health, Inc., filed a securities fraud action against Cardinal Health, its individual executives and Cardinal’s independent auditor, accounting firm Ernst & Young, alleging that from 1998 through 2002 the company, aided by Ernst & Young, engaged in a scheme to artificially inflate its earnings and conceal its debt. In October 2007, the court approved a settlement establishing a $600 million fund to be distributed to investors who purchased Cardinal Health stock between October 2000 and July 2004.... more»
2. Inadequate Accounting Practices
In October 2003, the Securities and Exchange Commission (SEC) began investigating how Cardinal Health accounted for expected settlements of lawsuits against vitamin manufacturers. The following year, the probe expanded to include Cardinal’s method of classifying its drug-distribution business revenue. As the result of an internal investigation, Cardinal restated its annual and quarterly financial statements for three years. The SEC alleged that, from September 2000 through March 2004, Cardinal engaged in a fraudulent revenue and earnings management scheme, as well as other improper accounting and disclosure practices. In January 2006, Cardinal reached a settlement with the SEC and agreed to pay a $35 million penalty.... more»
3. Medicine Shoppe Pharmacy Kickbacks
Cardinal Health agreed to pay the United States $8 million to resolve claims that it violated the False Claims Act by paying $440,000 to induce the owner of a chain of pharmacies to purchase Cardinal’s prescription drugs. Pharmacy consultant Kevin Rinne and pharmacy owner R. Daniel Saleaumua alleged that Cardinal offered them $300,000 in cash and $140,000 in discounts to get Saleaumua’s seven Kansas City-area pharmacies to switch to Cardinal as a supplier, an arrangement that, according to federal prosecutors, constituted an illegal kickback.... more»
4. Failure to Conform to Current Good Manufacturing Practices
In 2001, an inspection of Cardinal Health’s drug manufacturing facility in Winchester, Kentucky showed deviations from "Current Good Manufacturing Practices Regulations" (21 CFR 210, 211), causing certain drug products to be adulterated. The deviations included “batch records [that did not] accurately reflect the actual manufacturing process,” "no documentation that manufacturing employees are trained/instructed following significant changes in procedures" and “failure to have appropriate controls over computerized laboratory systems to assure that changes in or deletions of records are instituted only by authorized personnel.” Cardinal Health was given fifteen working days to complete corrective actions.... more»
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