Mike Kaufmann, who assumed leadership of Dublin, Ohio-based Cardinal Health earlier this month, said the company's medical supply business will not become easily "commoditized" when brought toe-to-toe with other wholesale distributors, like Amazon, that aim to disrupt the business, according to Columbus Business First.
Some analysts suggest Amazon's fine-tuned distribution and bare-bones costs will undercut healthcare distributors in terms of affordable pricing. However, during the 36th annual J.P. Morgan Healthcare Conference taking place Jan. 8 through Jan. 11 in San Francisco, Mr. Kaufmann said Cardinal Health's medical supply business will be largely insulated from potential pricing discrepancies. However, the products that may become commoditized, such as surgical gloves, will still prove to be among the more affordable options.
"When we ship gloves, we tend to ship a pallet of gloves," Mr. Kaufmann said. "It is semi-trucks and pallets, not … boxes, which is a very different type of delivery. If you look at the scale of all that we do and how much we buy, the price we're selling at today is significantly — I mean, significantly — lower than anything else out there. It would be hard for someone to ever come close to the pricing we would otherwise have."
Analysts also suggest Cardinal Health's $13.5 billion medical segment will largely remain insulated from price fluctuations because the company can still count sales in countries where Amazon hasn't begun medical distribution and it retails "commodities" that aren't necessarily commodities, such as surgical gloves. Surgeons require specific hospital gloves built for durability and comfort, which may differ from the types of gloves sold on retail sites like Amazon, the report states.