Cardinal Health to Pay $26.8 Million to Settle Allegations It Inflated Prices

Drug distributor says it settled to avoid legal costs, doesn’t believe it violated law

Cardinal Health Inc. agreed to pay $26.8 million to settle U.S. accusations that the drug distributor inflated the prices for radiopharmaceutical drugs used to diagnose illnesses such as heart disease.

Cardinal Health said that as part of the settlement, it didn’t admit or deny any wrongdoing and that it doesn’t believe it violated the law. According to the company, it voluntarily agreed to the settlement to avoid the costs and inherent unpredictability associated with litigation.

The company added that the settlement isn’t expected to have a material impact on its operations.

The Federal Trade Commission said the $26.8 million represents the disgorgement of funds the agency alleged Cardinal Health generated illegally from its trading practices. The money will be deposited into a fund for impacted customers, the FTC said.

According to the FTC’s complaint, Cardinal through separate acquisitions in 2003 and 2004 became the largest operator of radiopharmacies in the U.S. and the sole radiopharmacy operator in 25 metropolitan areas.

The FTC had alleged that from 2003 to 2008, Cardinal Health employed various tactics to coerce and induce both Bristol-Myers Squibb Co. and General Electric Co. to refuse to grant distribution rights for their respective heart perfusion agents used in heart stress tests to new competitors in those markets. Bristol and GE at the time were the sole U.S. producers of HPAs, according to the FTC.

The accord also includes measures to prevent Cardinal from entering simultaneous deals with manufacturers of the same radiopharmaceutical product or from using coercion or retaliation to obtain effective exclusivity. It also includes provisions to spur competition in six markets where Cardinal continues to operate the sole or dominant radiopharmacy and requires the company to establish an antitrust compliance program for the radiopharmacy unit.

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