Key Takeaways
- Cardinal Health said its contracts with the pharmacy benefits provider of UnitedHealth Group, OptumRX, won’t be renewed, and shares fell in intraday trading Monday.
- The health insurer noted that sales to OptumRX provided 16% of Cardinal Health’s 2023 revenue.
- Cardinal Health explained that even with losing the contracts, it was affirming its outlook for this year and beyond.
Cardinal Health ( CAH ) shares fell in intraday trading Monday after the health insurer provider reported that its contracts with UnitedHealth Group’s ( UNH ) pharmacy benefits subsidiary won’t be renewed.
The company explained that the agreements with OptumRX will expire at the end of June. It noted sales to OptumRX provided 16% of its revenue in 2023.
Cardinal Health noted that it anticipates partially offsetting the impact “through a combination of new customer wins, specialty growth and other actions.”
In addition, the company affirmed its 2024 adjusted earnings per share (EPS ) guidance of $7.20 to $7.35, as well as both its Pharmaceutical and Specialty Solutions long-term segment profit compound annual growth rate (CAGR) of 4% to 6% and its consolidated adjusted EPS CAGR target of 12% to 14% for fiscal years 2024 to 2026.
Chief Executive Officer (CEO ) Jason Hollar said Cardinal Health remains “confident in the resiliency and strong value proposition of our business.”
Shares of Cardinal Health were down 5% to $102.78 as of 1:31 p.m. ET Monday.