In the end, maybe they both blinked.
Just days after announcing that they couldn't come to an agreement and sending out alerts to health-care providers and pharmacies nationwide, drug distributor Cardinal Health
At stake was some $800 million in sales of Eisai's drugs Aricept, a treatment for Alzheimer's that is marketed with Pfizer
As Fool contributor Brian Gorman reported, Cardinal has been trying to adopt a fee-for-service drug distribution arrangement with pharmaceutical manufacturers. Notoriously reluctant to change, the pharmaceuticals instead prefer the current system of distributors like Cardinal, McKesson
For Eisai, coming to an agreement was important because it would have caused a disruption in getting its drugs to pharmacies and health-care providers. While it does have other distributors, sales to Cardinal represent a large portion of Eisai's $2.5 billion in annual revenues.
Aricept is the No. 1 prescribed treatment for the 1.7 million people diagnosed with Alzheimer's. Worldwide revenues from the sale of the drug, which improves the cognitive function of patients, amounted to $254 million last year. Because of its wide acceptance, other avenues of distribution for it would have been readily found. It might not be the same case for Aricept, the heartburn treatment, which already faces tough competition from AstraZeneca's
Both sides made nice in the new announcement, though terms were not disclosed. Ultimately, both the manufacturer and the distributor win under the agreement and the patient benefits.
Fool contributor Rich Duprey believes a few less Krispy Kreme doughnuts would resolve his own heartburn issues. He owns shares in Eisai but does not own any of the other stocks mentioned in this article.
