Despite pressure from generic drug prices, Cardinal Health will continue to grow and is well-positioned for healthy long-term performance. Management highlighted three factors affecting its approach to crafting guidance for fiscal year 2018. image sourceFirst, the medical segment will immediately feel the impact from the Medtronic portfolio acquisition. It included the patient care, deep vein thrombosis, and nutritional insufficiency products and businesses. If the deal closes in the first quarter, then Cardinal Health should realize a non-GAAP EPS lift of $0.21. That includes $100 million in inventory expenses following the acquisition, which hints that the new offerings will prove even more beneficial in years to come. Second, Cardinal Health expects company-specific discrete items will have a negative impact on non-GAAP EPS of $0.50 in fiscal year 2018. Half of that is expected to come from the pharmaceutical segment, which demonstrates that pricing headwinds will persist at least another year. Third, management expects drug pricing headwinds to become less fierce over time. When combined with the company-specific items mentioned above, the pharmaceutical segment could see profits fall next year compared to fiscal year 2017.
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