A Slap on the Corporate Wrist
Distributing Vicodin to people who don't have a prescription for it is conduct that typically results in the kind of harshly punitive criminal sentence that has become the trademark of the war on drugs. Unless the drug distributor is a business like Cardinal Health Inc. The DEA "is suspending its license to distribute controlled substances from its Auburn, Wash. facility" because it sold Vicodin to a "pharmacy that allegedly dispensed excessive amounts based on illegitimate prescriptions from Internet pharmacy web sites."
A license suspension sounds serious, doesn't it? Not to Wall Street analysts.
Shares of Cardinal Health Inc. edged higher Friday as analysts said the Drug Enforcement Administration's action to suspend the company's controlled substances license at its Washington facility won't materially affect its bottom line.
And why is that? (more ...)
JPMorgan analyst Lisa C. Gill said she spoke with a DEA representative, who stated the Auburn facility will be allowed to remain operational until Monday to serve legitimate customers, after which Cardinal will have to make other arrangements to serve customers until the suspension on controlled substances is lifted. ...In a note to clients, Gill said Cardinal Health's situation appears similar to that of AmerisourceBergen, which in April had its Orlando distribution center's license suspended but reinstated a few months later, with no visible material impact to earnings. ... Gill wrote[:] "We expect no material impact to earnings as a result of today's DEA action."
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