VA's Pharmaceutical Prime Vendor Contract with McKesson Corporation Reaches $828M in March 2023

Contract Overview

Contract Amount: $828,399,145 ($828.4M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-03-01

End Date: 2023-03-31

Contract Duration: 30 days

Daily Burn Rate: $27.6M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: PHARMACEUTICAL PRIME VENDOR (PPV)FY2023 MARCH

Place of Performance

Location: IRVING, DALLAS County, TEXAS, 75039

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $828.4 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT: PHARMACEUTICAL PRIME VENDOR (PPV)FY2023 MARCH Key points: 1. The VA awarded a significant contract to McKesson Corporation for pharmaceutical supplies. 2. This contract falls under the Pharmaceutical Preparation Manufacturing sector. 3. The contract was awarded through full and open competition, suggesting a competitive bidding process. 4. The spending for March 2023 was substantial, highlighting the ongoing need for these services.

Value Assessment

Rating: good

The contract's firm fixed price structure provides cost certainty. Benchmarking against similar pharmaceutical prime vendor contracts would be necessary for a comprehensive value assessment, but the scale suggests significant volume.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded via full and open competition, which typically drives competitive pricing. The specific price discovery mechanisms within this process are not detailed but are expected to be robust.

Taxpayer Impact: Taxpayer funds are being utilized for essential pharmaceutical supplies to support veterans' healthcare needs.

Public Impact

Ensures timely access to critical medications for veterans. Supports the operational readiness of VA healthcare facilities nationwide. Contributes to the stability of the pharmaceutical supply chain for a key federal agency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract periods.
Dependence on a single vendor for a critical supply chain.

Positive Signals

Awarded through full and open competition.
Firm fixed price contract provides cost predictability.

Sector Analysis

The Pharmaceutical Preparation Manufacturing sector is vital for healthcare delivery. Spending benchmarks for similar prime vendor contracts can vary widely based on agency size and specific drug formularies.

Small Business Impact

This contract appears to be awarded to a large corporation, McKesson. Analysis of subcontracting opportunities for small businesses within this prime contract would be beneficial.

Oversight & Accountability

The Department of Veterans Affairs is responsible for oversight. Regular performance reviews and audits are crucial to ensure contract compliance and value for taxpayer money.

Related Government Programs

Pharmaceutical Preparation Manufacturing
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

High contract value
Single awardee for critical supplies
Potential for price escalation
Dependence on pharmaceutical supply chain

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $828.4 million to MCKESSON CORPORATION. EXPRESS REPORT: PHARMACEUTICAL PRIME VENDOR (PPV)FY2023 MARCH

Who is the contractor on this award?

The obligated recipient is MCKESSON CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $828.4 million.

What is the period of performance?

Start: 2023-03-01. End: 2023-03-31.

What is the year-over-year spending trend for this Pharmaceutical Prime Vendor contract?

Analyzing the year-over-year spending trend is crucial to understand if the VA's expenditure on pharmaceutical supplies is increasing, decreasing, or remaining stable. This trend can indicate changes in demand, pricing strategies, or contract scope, providing insights into the long-term value and efficiency of the contract.

How does McKesson's pricing compare to other federal pharmaceutical contracts?

Benchmarking McKesson's pricing against similar contracts awarded by other federal agencies or for comparable pharmaceutical products is essential for assessing value. Significant deviations could signal potential overpricing or exceptional negotiation, warranting further investigation into the contract's terms and market conditions.

What mechanisms are in place to ensure the quality and efficacy of pharmaceuticals supplied under this contract?

Ensuring the quality and efficacy of pharmaceuticals is paramount. The VA likely has stringent quality assurance protocols, including vendor audits, product testing, and adherence to FDA regulations. Understanding these mechanisms provides confidence in the safety and effectiveness of the medications being procured.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation Manufacturing

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6555 STATE HIGHWAY 161, IRVING, TX, 75039

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $828,399,145

Exercised Options: $828,399,145

Current Obligation: $828,399,145

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36W79720D0001

IDV Type: IDC

Timeline