Podcast | Healthcare (HC)

Healthcare Distribution and Lessons from Leading a Fortune 15 Healthcare Company

October 30, 2025

Every hospital, pharmacy, clinic, and home delivery relies on something we often take for granted: the quiet but essential machinery of healthcare distribution.

In this episode, Jon Lange speaks with Mike Kaufmann, former CEO of Cardinal Health, about what it takes to lead one of the largest and systemically important healthcare services companies in the world. From building resilient supply chains to navigating COVID-19, Mike shares leadership lessons, behind-the-scenes insights into the distribution sector, and the high-stakes responsibility of delivering life-saving products when every moment counts.

Key Takeaways:

Cardinal Health plays a critical role in delivering pharmaceuticals and medical supplies across the U.S. and globally.
The drug distribution market is dominated by three key players, with Cardinal and its peers evolving through strategic diversification and consolidation.
During COVID-19, Cardinal’s leadership team had to navigate the particularly difficult challenge of keeping the company’s 50,000+ employees safe while giving them the support they needed to continue providing essential products and services to providers and patients across the US.
Transparent communication, authenticity, and remaining calm under pressure were essential as Cardinal’s leadership navigated through COVID and other crises.
Mission-driven leadership is critical in healthcare companies, where daily operations can improve patient care and save lives.

[01:26:02] Mike It was really hard knowing that you couldn’t send most of your employees home, that they had to show up to work every day, and that you know you had the responsibility not only to them, which was obviously critically important, but if you weren’t able to do it in an effective way, you could affect the delivery of critical supplies into the hospitals.

[01:26:23] Josh That’s Mike Kaufman, former CEO of Cardinal Health, and I’m Josh Nelson, head of healthcare at THL Partners. And this is Healthcare in Action. It’s a podcast that explores the latest developments and innovations transforming the U.S. Healthcare sector, from cutting-edge technology to thoughtful approaches to patient care. I’m here with my colleague John Lang, who will lead us in a conversation with Mike about the drug distribution landscape in the United States, as well as the challenges and lessons learned from leading a Fortune 15 healthcare company. John, take it away.

[01:26:57] Jon Thanks, Josh. Today we’ll be looking at a critical part of the U.S. Healthcare system that all of us rely on, but is often taken for granted. Healthcare distribution. Behind every hospital, pharmacy, doctor’s office, and home delivery is a system ensuring that medicines and supplies arrive where and when they’re needed. It’s the backbone of modern care, and companies like Cardinal Health make it possible. In this episode, I spoke with Mike Kaufman, the former CEO of Cardinal Health and a 30-year veteran of the company. During his tenure, the company reimagined the business model of drug distribution, navigated global supply chain disruptions during COVID, and grew into one of the world’s largest healthcare services companies with more than 50,000 employees worldwide. Mike has been a real thought leader in modernizing healthcare distribution. And he was one of the key architects who created the current distribution business model as we know it today. I was so pleased to speak with Mike about the history of Cardinal, how consolidation, competition, and innovation have shaped the sector, and leadership lessons from navigating COVID and other crises while staying laser-focused on the vitally important job of getting life-saving products into the hands of providers and patients. So let’s get into it. Mike, thanks so much for joining me today.

[01:28:13] Mike Well, thanks for having me. Always enjoy talking to you and the team and hopefully some of the insights and stories I share today will be helpful.

[01:28:20] Jon Maybe to start, a lot of people will know of Cardinal Health and will know about drug distribution, but there is such a range of businesses and such an interesting history. Can you just set the stage a bit? What does Cardinal Health do and maybe give a little bit of background on the market landscape?

[01:28:38] Mike Sure, absolutely. So Cardinal’s healthcare services company, you know, really again focused totally on healthcare. The biggest businesses in terms of revenue are going to be the pharma distribution business and the medical distribution business. Those are the two biggest in terms of revenue. But Cardinal’s also number one in nuclear pharmacy, number one in medical products to the home, freight management for healthcare entities. So Cardinal has more than probably 20 different companies that roll up to make the company what it is today. Many of them market leaders and all of them at least leaders in their respective spaces.

[01:29:19] Jon Talk about the competitive dynamic as well. There are a couple of other big companies in the space. And so how did they come together? What’s the nature of competition among the big three?

[01:29:28] Mike Yeah, there’s really three large players. It would be McKesson would be the largest, and then Sencora and then Cardinal Health. They’re the big three. They’re controlling over ninety percent of the market share of drug distribution into the various providers, whether it be retail independent, regional chains, large chains, nursing homes, hospitals, et cetera. So there’s three very large players. McKesson’s been around the longest and was very large when I actually joined Cardinal in nineteen ninety. And over that time, Cardinal did a lot of consolidation, as did what was Amerisourceberg and is now Sincora, and you know, grew to be able to compete effectively with McKesson. But they’re all really three great companies that really deliver a lot of value to their customers and have done a nice job of not only in drug distribution, but all of them have diversified in some unique ways that really makes them interesting companies that have done really well.

[01:30:25] Jon And you of course were at the helm during COVID, which was disruptive not only for healthcare companies, but really the whole world economy. So can you talk a bit about that? How did Cardinal and how did the market evolve during COVID? What were the key challenges?

[01:30:39] Mike Well, I think the first key challenge of when you’re the CEO of a business or any leader of a business and you have something like that is the safety of your employees. Right. And so at the time there was, you have to remember it’s easy today, five years later to think about COVID in one way. But at the time, there was so much unknown. And the threat of the health of your employees was significant. And so figuring out a way quickly within days to immediately get people working remote, figure out where they couldn’t work remote, which would be in most of our locations, right? Because we’re distributing pharmaceuticals and med surge supplies and nuclear supplies that couldn’t be shut down. Those people couldn’t work from home. And so we had to find a way to keep them safe every day by helping them distance and mask and all the different things that were going on at the time. So there’s a lot of unknowns, you know, at the time. But the most important thing that I was thinking about as a CEO was how do I keep my employees safe so that they can continue to do the critical jobs that you know we provided. We’re one of the largest providers of PPE. And at the time, trying to find masks and gowns and gloves and getting them into particularly hospitals to treat the people that were ill was just an unbelievable task that took a lot of my time. I literally spoke to someone at the White House on a daily basis for months, understanding where the hot spots were, where we could get the product, but at the same time always remembering how do I keep my employees and their families safe? And that was a key.

[01:32:14] Jon Just put that in context for us. How many employees did you have? And what were some of the roles, you know, on the front lines that maybe were trickiest to keep safe and get them the equipment and the PPE they needed?

[01:32:25] Mike Yeah. So we had about 50,000 employees in total. So as you can imagine, there’s somewhere in a neighborhood of let’s say sixty to seventy distribution centers between pharma and med that are delivering, you know, getting orders by nine o’clock at night and delivering next day to your, you know, hospital or pharmacy, none of those could shut down. And you’re trying to figure out not only in the US, where you know, a little less than half were operating, but also trying to figure out how to keep your employees safe in distant countries like Thailand and Costa Rica and Dominican Republic and Malta and other places where you have plans, working with those governments and those employees to make sure that those employees are are safe. I think we did an excellent job of that, but I can tell you that it was very hard because there we had lots of employees that passed away due to COVID in many of our plants, like as everybody did. And hearing those stories of those employees and in the impact that many of them had on their, you know, teammates in their various plants, it was something every day that I personally took note of and wrote a personal note to every single family that lost someone that was a cardinal employee. But it was a very proud time, but a very gut wrenching time when you’re worried about your employees.

[01:33:46] Jon Yeah, absolutely. And on this point, you were a leader at Cardinal for many years, and I’m sure you’ve been through a number of crises. But when something like COVID comes along, you know, it’s business as usual up until one day, and then the whole world changes. What do you do? What is your first step in terms of digesting that crisis and reorienting your team toward taking quick action against that crisis?

[01:34:10] Mike Yeah. That’s a great question. And I I think the first thing is you have to, especially as the CEO or any C-suite leader, right? People look to you. And if you look confused or nervous or distraught or whatever, that that’s not going to send a good message. So it was really important on my short drive to work every morning to make sure that, you know, I took a breath and went in with the attitude that we’re going to take care of you. We know how to do this. Trust us. We’re learning as fast as we can on every piece of data that comes in around what to do that’s your, you know, for your safety. And so I think showing that level of both authenticity, concern, confidence, it’s really important as a leader to make sure that people see that. But then they also need to hear you communicate a lot, you know, especially during times of great distress and and you know, challenges is people want to hear from you. They don’t want you to hide. And so getting on every day and having some type of communication with employees in a periodic fashion that was as open and transparent as you could possibly be, but also being authentic and honest around what you did and didn’t know. I think that was an important part of leading through, you know, the crisis. Of course, you need to surround yourself with people that are smarter than you, that understand a lot of different things. Obviously, that’s incredibly critical to get a team together and really talk about all the different avenues. But I think as the leader, it’s about exuding confidence that you and the team can make sure they take care of everybody, be an authentic, communicating. And I think those are really important things to keep in mind.

[01:35:51] Jon It’s really interesting to hear you describe that because I imagine it’s quite a difficult balance where on one hand, you want to project calm and that you’ve got it under control and you know you’re taking care of the situation. At the same time, I’m sure you also have some self-doubt and you haven’t dealt with exactly the situation before. And as you said, you sort of have to take the time to center yourself to make sure that you can project that to your team. You have to continue to be authentic. I’m sure that’s something that every leader deals with to some extent. But particularly for the leader of such, you know, an enormous and important healthcare organization, I imagine it was just really hard.

[01:36:25] Mike Yeah, it was really hard knowing that you couldn’t send most of your employees home, that they had to show up to work every day, and that, you know, you had the responsibility not only to them, which was obviously critically important, but if you weren’t able to do it in an effective way, you could affect the delivery of critical supplies into the hospitals, which again at the time not only had your normal patients, but just all of the COVID patients that are there and the challenges that they had for getting supplies and everything. So being part of a healthcare organization, it’s why I stayed at Cardinal for 32 years, is that I really truly felt that what Cardinal Health does, what McKesson does and core does, these are all companies that matter. That on a day-to-day basis, there are people’s lives that are dependent on the success of these companies to deliver what they say they can deliver, whether it’s drug distribution or nuclear test or a product to your home to help make your life better at home. It matters. And so for me, doing something that mattered always motivated me and kept me excited about being there for so long.

[01:57:05] Jon As we wrap this episode, I’m joined by my colleague Vicente Piedraita, Managing Director in the Strategic Resource Group at THL. Vicente, one thing that really came through in my conversation with Mike, and it might seem really obvious, but it’s so important, is just that effective leadership really matters and can really make a difference. You’ve spent so much time with CEOs of healthcare companies. What are some of the key qualities that you found are really important in making a great leader at a healthcare organization?

[01:57:36] Speaker 4 It’s a good question, John. I look, I think a lot of the factors that make a great leader make a great leader regardless of the type of organization. And then I’ll talk a little bit about some of the healthcare specific pieces I’ve seen. But just being a great leader of people, being relentless about getting the right talent under them, top grading, being able to set a strategy and vision for the organization, being sufficiently on top of the details. A lot of things that I think you’ll find everywhere. When I think about a healthcare context specifically, I’d probably highlight two related pieces. One, being mission aligned from the top is really critical, particularly with provider businesses, but everywhere in healthcare, the work that we do in healthcare makes people’s lives better, makes their health better, can save lives in some situations. So that is one piece. A great healthcare leader will have that from the top. I think related to that is a pretty relentless focus on quality. I think the best leaders in healthcare blend the focus on quality with an emphasis on how do we do this better so that we can do it more efficiently and do more of it.

[01:58:43] Jon Vicente, one other thing that I thought was really interesting from the conversation with Mike was how he laid out just some of the key challenges of being a leader of a healthcare company during a crisis, like COVID. And I’ve always found the concept fascinating of a wartime versus a peacetime CEO. I know Ben Horowitz has spoken about that and written about that. What are some of the key ways that you’ve seen a CEO of a healthcare company can step up in really difficult situations?

[01:59:11] Speaker 4 I thought Mike highlighted some really good observations. Staying calm and projecting confidence even with uncertainty. People are going to be looking to you. And so I think that is critical. At the same time, being authentic and admitting what you don’t know, it’s confidence, it’s not hubris. Very transparent and consistent communication. And then I thought that the humility of trying to surround yourself with as many good sources of expertise as you can because you’re trying to make decisions in a in a challenging and uncertain environment. I thought those were all really good, really good points. I’d I’d highlight a couple of others that I think we’ve lived through. It’s a bit of a cliche, but hope is not a strategy. And you know, when when you when you talk about the peacetime and wartime, I think one key differentiation is do you just kind of hope that it gets better, or do you proactively seek to act? And then the last piece related to that, or trying to inform those, I think is is about getting really sharp on the metrics of the business and and trying to shine a light as much as possible on what’s going on. Some of the companies that we’ve had that have the best operating metrics and the best visibility into everything that’s going on in the business have been through a crisis. And in those situations, we’ve worked with the management team to build really, really good visibility so that you can manage through that. I think that’s a huge advantage when you’re trying to manage through a crisis.

[02:00:40] Jon And finally, Vicente, one thing I’ve found interacting with great CEOs and great leaders is that they are always looking to get better themselves and they’re always looking for partnerships for teams that make them better. At THL, you and the SRG group partner with CEOs all the time. How are we able to partner with them to allow them to work at the top of their game?

[02:01:04] Speaker 4 Thanks for the question, John. I I think it starts first and foremost with alignment. We believe alignment is absolutely critical. We start before we make any investment, we work to align with the leadership team on how do we see the value creation opportunities in this next phase of growth. Is that aligned with how you think about it? Where do we have capabilities that can be complementary to what you have? And we seek to always maintain that alignment, even as as circumstances change. We roll up our sleeves and help. So the leadership teams will be facing challenges over the time that we’re, you know, that we’re partnered. We wanna ensure that we help you remove the barriers and we help you work through the challenges, build the scalable organizations that are gonna enable you to drive the mission that we were talking about earlier, bring it to more people. You know, we’re pretty focused. We have specific areas of of functional expertise that we’re deep in and that we’ve geared towards the types of companies that we invest behind to bring kind of repeatable support that we can help with because ultimately the the leadership teams are the ones who really know that the industry in tremendous depth and are are building the business and and growing the business. Because of that, I I learn a ton every time I I get to work with a new team. It is just as you say, the the the best folks are are looking to learn and improve themselves. We’re we’re we’re in the same book. We we don’t have everything figured out. We want to learn from the teams that we partner with as much as we want to bring specific capabilities to the table and help them.

[02:02:36] Jon Vicente, thank you so much for joining me today. Really appreciate your thoughts as always, and I look forward to continuing the conversation very soon.

[02:02:44] Josh Thanks for having me on, John. Thank you for listening to Healthcare in Action, brought to you by THL. To help Healthcare in Action reach more listeners like you, either share this episode with a colleague, subscribe to the show, or rate or review us on Apple Podcasts. And for more background on THL’s healthcare vertical, visit thl.com/slash verticals slash healthcare.