VA awards $16.3M for pharmacy services, but limited competition raises cost concerns

Contract Overview

Contract Amount: $16,331 ($16.3K)

Contractor: Covermymeds Pharmacy LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-04-03

End Date: 2026-07-03

Contract Duration: 91 days

Daily Burn Rate: $179/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PHARMACY ORDER POMALYST 4MG CAPS

Place of Performance

Location: MEMPHIS, SHELBY County, TENNESSEE, 38141

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $16,331.35 to COVERMYMEDS PHARMACY LLC for work described as: PHARMACY ORDER POMALYST 4MG CAPS Key points: 1. Value for money is questionable due to a lack of competitive bidding. 2. Competition dynamics are limited, suggesting potential for higher prices. 3. Risk indicators include a sole-source award and a short performance period. 4. Performance context shows a firm fixed-price contract for pharmaceutical preparation. 5. Sector positioning is within the healthcare and pharmaceutical manufacturing industry.

Value Assessment

Rating: questionable

The contract value of $16.3 million for a 91-day period appears high, especially given the absence of a competitive bidding process. Without comparable contracts or market benchmarks for this specific pharmaceutical preparation, it is difficult to definitively assess value for money. The firm fixed-price structure offers some cost certainty, but the lack of competition prevents price discovery and may lead to inflated costs for taxpayers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the simplified acquisition procedures (SAP) and was awarded as a sole-source purchase order. This indicates that only one vendor, COVERMYMEDS PHARMACY LLC, was solicited for this requirement. The lack of competition limits the government's ability to explore alternative solutions or negotiate more favorable pricing.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no market pressure to drive down prices. This limits the opportunity for the government to secure the best possible value.

Public Impact

Veterans will benefit from access to pharmacy services, specifically POMALYST 4MG CAPS. The services delivered are pharmaceutical preparation and distribution. The geographic impact is concentrated in Tennessee (ST: TN, SN: TENNESSEE). Workforce implications are likely within the pharmaceutical supply chain and pharmacy operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher prices.
Short contract duration (91 days) could indicate urgency or a stop-gap measure, potentially impacting long-term planning.
Sole-source award limits transparency and potential for cost savings.

Positive Signals

Ensures continued access to a specific medication for beneficiaries.
Firm fixed-price contract provides cost certainty for the awarded amount.
Awarded to a specific pharmacy, potentially indicating a specialized capability.

Sector Analysis

The healthcare sector, particularly pharmaceutical preparation manufacturing, is a critical area of federal spending. This contract falls within the broader category of medical supplies and services. Comparable spending benchmarks are difficult to establish without more specific details on the drug and service, but the overall market for pharmaceuticals is substantial. The VA's reliance on such contracts highlights the importance of efficient procurement in maintaining healthcare delivery.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. The award was made directly to COVERMYMEDS PHARMACY LLC, and information regarding their size or small business participation is not provided. Further analysis would be needed to determine if small businesses could have participated in this procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' procurement and program management offices. As a purchase order, it is subject to standard government contracting regulations and oversight. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse. Transparency is limited due to the sole-source nature of the award.

Related Government Programs

Department of Veterans Affairs Pharmacy Benefits Management
Pharmaceutical Manufacturing Contracts
Medical Supplies Procurement

Risk Flags

Sole-source award
Lack of competition
High potential cost due to lack of bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $16,331.35 to COVERMYMEDS PHARMACY LLC. PHARMACY ORDER POMALYST 4MG CAPS

Who is the contractor on this award?

The obligated recipient is COVERMYMEDS PHARMACY LLC.

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 $16,331.35.

What is the period of performance?

Start: 2026-04-03. End: 2026-07-03.

What is the track record of COVERMYMEDS PHARMACY LLC with the federal government?

Information regarding the specific track record of COVERMYMEDS PHARMACY LLC with the federal government is not detailed in the provided data. A comprehensive review would require accessing federal procurement databases like SAM.gov or FPDS to identify past awards, performance history, and any reported issues. Without this data, it's difficult to assess their past performance, reliability, and experience in fulfilling government contracts, particularly for pharmaceutical preparation and distribution.

How does the per-unit cost of POMALYST 4MG CAPS compare to market rates or other government contracts?

The provided data does not include per-unit cost information, making a direct comparison to market rates or other government contracts impossible. The total award amount of $16.3 million is for a 91-day period, but the quantity of POMALYST 4MG CAPS is not specified. To perform a value-for-money assessment, the quantity of units procured would be essential. Without this, benchmarking the price per unit against commercial prices or other federal contracts (e.g., through the VA's Federal Supply Schedule or GSA) cannot be done.

What are the specific risks associated with a sole-source award for critical pharmaceutical supplies?

Sole-source awards for critical pharmaceutical supplies carry several risks. Primarily, the lack of competition can lead to inflated prices, as the government does not benefit from market-driven cost reductions. This can result in a lower value for taxpayer money. Additionally, sole-source awards may limit the government's access to innovative solutions or alternative suppliers that could offer better quality, faster delivery, or more specialized services. There's also a potential risk of vendor lock-in, where the government becomes dependent on a single provider, potentially reducing leverage in future negotiations. Finally, the absence of a competitive process can sometimes mask underlying issues with the procurement or the chosen vendor.

What is the historical spending pattern for POMALYST 4MG CAPS by the Department of Veterans Affairs?

Historical spending data for POMALYST 4MG CAPS by the Department of Veterans Affairs (VA) is not available in the provided contract details. To analyze historical spending patterns, one would need to query federal procurement databases for previous contracts awarded for this specific drug. This analysis would reveal the total amount spent over time, the number of contracts awarded, the types of competition used (e.g., competitive vs. sole-source), and the primary awardees. Such historical data is crucial for understanding trends, identifying potential cost increases or decreases, and assessing the long-term strategy for procuring this medication.

What is the justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED UNDER SAP' and is a 'SOLE SOURCE' award. However, the specific justification for this sole-source determination is not included. Typically, federal agencies must document a justification for sole-source procurements, citing reasons such as unique capabilities of the vendor, urgent and compelling needs where competition is not feasible, or when only one responsible source exists. Without this documentation, it is impossible to assess the validity of the sole-source decision and whether it was appropriate under federal acquisition regulations.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4971 SOUTHRIDGE BLVD STE 115, MEMPHIS, TN, 38141

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

Financial Breakdown

Contract Ceiling: $16,331

Exercised Options: $16,331

Current Obligation: $16,331

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline