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Commitments, Contingent Liabilities and Litigation | 12 Months Ended
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Jun. 30, 2017
Commitments and Contingencies Disclosure [Abstract] |
Commitments, Contingent Liabilities and Litigation | 8. Commitments, Contingent Liabilities and Litigation Commitments Operating Leases The future minimum rental payments for operating leases having initial or remaining non-cancelable lease terms in excess of one year at June 30, 2017 for fiscal 2018 through 2022 and thereafter are as follows: $110 million, $94 million, $77 million, $59 million, $41 million and $107 million. Rental expense relating to operating leases was $159 million, $126 million and $104 million in fiscal 2017, 2016 and 2015, respectively. Sublease rental income was immaterial for all periods presented. Generic Sourcing Venture With CVS Health Corporation In July 2014, we established Red Oak Sourcing, LLC ("Red Oak Sourcing"), a U.S.-based generic pharmaceutical sourcing venture with CVS for an initial term of 10 years. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of both companies. Due to the achievement of predetermined milestones, we are required to make quarterly payments of $45.6 million to CVS for the remainder of the initial term. Legal Proceedings We become involved from time to time in disputes, litigation and regulatory matters. We may be named from time to time in qui tam actions initiated by private third parties. In such actions, the private parties purport to act on behalf of federal or state governments, allege that false claims have been submitted for payment by the government and may receive an award if their claims are successful. After a private party has filed a qui tam action, the government must investigate the private party's claim and determine whether to intervene in and take control over the litigation. These actions may remain under seal while the government makes this determination. If the government declines to intervene, the private party may nonetheless continue to pursue the litigation on his or her own purporting to act on behalf of the government. From time to time, we become aware through employees, internal audits or other parties of possible compliance matters that we investigate internally, such as complaints or concerns relating to accounting, internal accounting controls, financial reporting, auditing, or other ethical matters or relating to compliance with laws such as healthcare fraud and abuse, anti-corruption or anti-bribery laws. In addition, from time to time, we receive subpoenas or requests for information from various government agencies relating to our business or to the business of a customer, supplier or other industry participants. Internal investigations, subpoenas or requests for information could lead to the assertion of claims or the commencement of legal proceedings against us or result in sanctions. From time to time, we may determine that products we manufacture or market do not meet our specifications, regulatory requirements, or published standards. When we or a regulatory agency identify a quality or regulatory issue, we investigate and take appropriate corrective action. Such actions can lead to product recalls, costs to repair or replace affected products, temporary interruptions in product sales, action by regulators and product liability claims and lawsuits, including class actions. Even absent an identified regulatory or quality issue or product recall, we can become subject to product liability claims and lawsuits. We accrue for contingencies related to disputes, litigation and regulatory matters if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies is highly subjective and requires judgments about future events. We regularly review contingencies to determine whether our accruals and related disclosures are adequate. The amount of ultimate loss may differ from these estimates. We recognize income from the favorable outcome of litigation when we receive the associated cash or assets. We recognize estimated loss contingencies for certain litigation and regulatory matters, including mass tort product liability claims, and income from favorable resolution of litigation in litigation (recoveries)/charges, net in our consolidated statements of earnings. State of West Virginia vs. Cardinal Health, Inc. In January 2017, we agreed, without admitting liability, to pay $20 million to the State of West Virginia to settle a lawsuit filed against us by the West Virginia Attorney General in June 2012. As previously disclosed, the West Virginia Attorney General had filed complaints in the Circuit Court of Boone County, West Virginia against a number of pharmaceutical wholesale distributors, including us, alleging, among other things, that, between 2007 and 2012, the distributors had failed to maintain effective controls to guard against diversion of controlled substances in West Virginia and had failed to report suspicious orders of controlled substances in accordance with the West Virginia Uniform Controlled Substances Act. Opioid Lawsuits As of August 8, 2017, 26 counties and municipalities in New York, Ohio, Oregon and West Virginia, as well as the Cherokee Nation, have filed lawsuits against pharmaceutical wholesale distributors (including us), pharmaceutical manufacturers and retail chains relating to the distribution of prescription opioid pain medications. The lawsuits, which have been filed in various federal, state and other courts, allege violations of controlled substance laws and various other statutes as well as common law claims, including negligence, public nuisance and unjust enrichment, and seek equitable relief and monetary damages. We are vigorously defending ourselves in these lawsuits. Since these lawsuits are at early stages, we are unable to predict the outcome of these lawsuits or estimate a range of reasonably possible losses. Product Liability Lawsuits As of August 8, 2017, we are named as a defendant in 68 product liability lawsuits filed in Alameda County Superior Court in California involving claims by approximately 750 plaintiffs that allege personal injuries associated with the use of Cordis OptEase and TrapEase inferior vena cava (IVC) filter products. Another 8 similar lawsuits involving claims by approximately 10 plaintiffs are pending in other jurisdictions. These lawsuits seek a variety of remedies, including unspecified monetary damages. We are vigorously defending ourselves in these lawsuits. In fiscal 2017, we recorded an accrual of $79 million ($53 million, net of tax) for estimated losses and legal defense costs as an adjustment to pre-acquisition liabilities assumed in the Cordis acquisition. We record additional accruals for losses and legal defense costs as litigation (recoveries)/charges, net in our consolidated statements of earnings. At June 30, 2017, we had a total of $98 million, net of expected insurance recoveries, accrued for losses and legal defense costs related to the Cordis IVC filter lawsuits, which includes the $79 million accrual referenced above. While we have recorded accruals based on our assessment of these matters, because these lawsuits are at early stages, we are unable to estimate a range of reasonably possible losses in excess of this accrued amount. Antitrust Litigation Proceeds We received and recognized income resulting from settlements of class action antitrust lawsuits, in which we were a class member, of $1 million, $80 million and $71 million during fiscal 2017, 2016 and 2015, respectively.

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- Definition The entire disclosure for commitments and contingencies. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 450 -URI http://asc.fasb.org/topic&trid=2127136 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -URI http://asc.fasb.org/topic&trid=2144648 + Details
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