No, CVS does not own Cardinal Health. These are two distinct and independent healthcare companies.
Understanding Their Relationship
While CVS Health (formerly CVS Caremark) does not own Cardinal Health, the two companies have engaged in a significant strategic partnership. This collaboration is structured as a joint venture, not an acquisition or an ownership stake of one in the other.
The Joint Venture Explained
In December 2013, CVS Caremark (now CVS Health) entered into a 10-year agreement with Cardinal Health to form a 50/50 joint venture. This partnership was specifically established to create the largest generic drug sourcing entity in the United States. Given that the U.S. represents the largest market for generic drugs globally, this venture was a major strategic move for both companies.
Key aspects of their collaborative arrangement include:
- Independent Entities: Both CVS Health and Cardinal Health remain separate, publicly traded corporations with their own distinct operations, management, and shareholders.
- Shared Control: The joint venture operates under shared control and equal partnership (50/50 ownership) between CVS Health and Cardinal Health for the specific purpose of generic drug sourcing.
- Strategic Sourcing: The primary goal of this collaboration was to leverage the combined scale of both companies to achieve more favorable pricing and ensure a robust supply chain for generic pharmaceuticals.
Why a Joint Venture, Not Ownership?
Joint ventures are a common strategy for companies to achieve specific business objectives without one company acquiring the other. For CVS Health and Cardinal Health, this structure allowed them to:
- Pool resources and expertise.
- Share risks and rewards.
- Gain significant market leverage in generic drug procurement.
- Maintain their individual core businesses and corporate identities.
This model enables them to collaborate on a particular aspect of their operations that benefits both, while still maintaining their independence and potentially competing in other areas of the healthcare market.
| Aspect | CVS Health (formerly CVS Caremark) | Cardinal Health |
|---|---|---|
| Ownership Status | Independent Public Company | Independent Public Company |
| Relationship | Joint Venture Partner (since 2013) | Joint Venture Partner (since 2013) |
| Direct Ownership | None over Cardinal Health | None over CVS Health |
| Purpose of JV | Generic Drug Sourcing | Generic Drug Sourcing |
