Bindley Western Industries, Inc. Reports CourtApproval of Previously Announced...

Business Editors, Health/Medical Writers

INDIANAPOLIS--(BW HealthWire)--Aug. 29, 2000

Bindley Western Industries, Inc. (NYSE:BDY) reported today that it entered into a plea agreement with the government to conclude an investigation that the company first disclosed to the public

In the settlement, the company agreed to accept vicarious liability for the acts of two former vice presidents of Bindley Western Drug Company, a division of the company. Both former employees have entered into plea agreements with the government regarding their conduct, which occurred between 1995 and 1997. Under the doctrine of vicarious liability, an employer may be held liable for the criminal conduct of its officers even when that conduct is detrimental to the employer and contrary to its internal policies and procedures. The government has agreed that all of the alleged criminal conduct was attributable to these two former employees located in the San Dimas, CA division and that the employees' improper activities occurred without the knowledge of corporate officers in Bindley Western's Indianapolis headquarters. One of these employees was terminated in January 1998 and the other resigned in October 1999. The Court has not yet sentenced either of the former employees.

The settlement required the company to plead guilty to one charge of conspiracy to commit interstate transportation of property obtained by fraud, and agreed to pay a fine of $20 million. The agreement imposes no probation on the company. The government agreed that no further criminal charges will be brought against the company, including its subsidiaries or affiliates, or any current or former director, officer, or employee arising out of any matters associated with the government's investigation. The agreement specifies that the alleged conduct did not involve harm to public health or safety; that there were no allegations of fraud against the United States or federal or state healthcare systems; and, that the offense occurred despite the company's effective program to prevent violations of the law. The government also confirmed that the company committed no violations of the Prescription Drug Marketing Act, a federal law applying to sales and purchases of pharmaceutical products.

William E. Bindley, the Company's Chairman and CEO stated: "We were shocked to learn of the crimes committed by our former employees and deeply regret the embarrassment brought to the hundreds of other law abiding and honest employees at the company. Nonetheless, we accept responsibility for their acts and have strengthened our programs to avoid or expose this kind of conduct in the future."

As previously reported by the company, the Board of Directors approved the settlement to avoid the significant costs and uncertainties associated with litigation. The settlement will permit the officers and employees to devote 100% of their energies to running the business and to pursue strategic initiatives that are in the shareholders' best interests. In conformance with generally accepted accounting principles, the company initially booked an estimated settlement amount of $25.0 million, plus the estimated fees and expenses associated with its internal investigation, and recorded an unusual charge of $26.3 million ($25.8 million net of tax) for the March 31, 2000 quarter. Because the final settlement amount was $5.0 million less than initially estimated, the company will record an unusual credit in that amount in the September 30, 2000 quarter.

Indianapolis-based Bindley Western, with annualized revenues of $10 billion, is a Fortune 500 company that provides a synergistic array of cost effective pharmaceutical and supply channel management products and services from 17 distribution facilities located in 14 states and from 32 specialty pharmacies located in 15 states. Customers include chain drug stores, independent drug stores, supermarkets and mass retailers with their own pharmacies, hospitals, clinics, HMOs, and managed care organizations, all of which are dedicated to lowering the cost of healthcare and improving the quality of patient care. Information on Bindley Western is available on-line at www.bindley.com.

Certain information in this press release contains forward-looking statements as defined in Section 27A of the Securities Act and 21E of the Exchange Act. Certain factors could cause actual results to differ materially from those in the forward-looking statements. The most significant of such uncertainties are described in the company's Forms 10-K, 10-Q and 8-K and in exhibits to those reports.

For further information, please contact Paul Blair, Director of Investor Relations, at (317) 704-4305 or pblair@bindley.com. The government, however, has requested that the company not comment on the investigation beyond what has been publicly disclosed by the government or the company.