Cardinal names Barrett CEO

DUBLIN, Ohio Culminating a three-year reorganization that split the company in two, drug wholesaler and health services giant Cardinal Health has promoted George Barrett to chairman and CEO.

Barrett, 54, replaced R. Kerry Clark, who previously announced that he would retire upon completion of the company’s planned spin-off of its CareFusion division. The change was effective Aug. 31.

Since joining Cardinal early last year, Barrett has been vice chairman and CEO of the company’s Healthcare Supply Chain Services segment. In addition to his promotion to the top management spot, Barrett also joined Cardinal’s board of directors.

The change in top management was anticipated, and may signal continuity in the way Cardinal supplies and services its independent and chain-pharmacy customers. For more than a year, Barrett has been in charge of the company’s flagship Healthcare Supply Chain Services division, by far the largest of the two core components to emerge from Cardinal’s sweeping restructuring and consolidation program.

Before joining Cardinal in January 2008, the company’s new chief executive garnered more than 25 years of experience in the healthcare industry, most recently as president and CEO of North America for Teva Pharmaceuticals, and as a member of Teva's Office of the CEO. In addition to his responsibility for North American operations, he led Teva's global pharmaceutical strategy.

Besides Barrett, another new board member will be Glenn Britt, the 60-year-old chairman, president and CEO of Time Warner Cable, whose appointment is effective Oct. 1. Cardinal also named John Finn the board’s presiding director and chairman of its audit committee.

Under the consolidation plan, which first was announced in July 2008, Cardinal retained its $80-billion-plus core business — its network of pharmaceutical and medical product distribution centers and nuclear pharmacies. The plan also included a tax-free spin-off of Cardinal’s clinical and medical product businesses as a separate public company.

The spin-off created a new, global company called CareFusion, under former Cardinal vice chairman and med-tech industry veteran David Schlotterbeck. Based in San Diego, CareFusion provides infusion, medication and supply dispensing, respiratory care, infection prevention, medical diagnostics and surgical procedures.

Among its product offerings: the Alaris IV infusion and Pyxis dispensing systems, AVEA and LTV series ventilators, V. Mueller surgical instruments, and products to reduce hospital-acquired infections through MedMined services and ChloraPrep preoperative skin preparation.

Clark, Cardinal’s outgoing top manager, drew praise from company director Richard Notebaert “for his clear vision and leadership during his tenure,” including “the repositioning of Cardinal Health to better serve our hospital and pharmacy customers.” The former chairman and CEO spearheaded the change in strategy that led to the spin-off of CareFusion and a sharper focus on the company’s core distribution and health services business, but also had to shepherd Cardinal through a major legal challenge after the company was charged with violating federal reporting requirements in its handling of controlled substances.

Those charges led to the temporary shutdown of controlled substance handling and distribution at several Cardinal distribution centers. Without admitting any wrongdoing, Cardinal agreed to pay $34 million in fines and alter its practices to prevent any possibility of diverted products.

Under Clark’s management, those changes left the company in a stronger position, with a greater ability to monitor and control its distribution practices. Among the changes: expanded training at its 27 DEA-registered distribution facilities, an electronic system that identifies and blocks potentially suspicious orders pending further investigation, and the hiring of former acting deputy U.S. attorney general Craig Morford as chief compliance officer.