VA awards $3.48M for Lenalidomide, a critical cancer drug, to Exelan Pharmaceuticals

Contract Overview

Contract Amount: $3,480,000 ($3.5M)

Contractor: Exelan Pharmaceuticals Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-01-15

End Date: 2027-01-14

Contract Duration: 364 days

Daily Burn Rate: $9.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: VA GREATER LOS ANGELES LENALIDOMIDE DO

Place of Performance

Location: BOCA RATON, PALM BEACH County, FLORIDA, 33432

State: Florida Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.5 million to EXELAN PHARMACEUTICALS INC for work described as: VA GREATER LOS ANGELES LENALIDOMIDE DO Key points: 1. The contract value represents a significant investment in essential pharmaceuticals for veterans. 2. Competition dynamics for this specific drug procurement warrant further examination given its critical nature. 3. Potential risks include supply chain disruptions and the long-term cost-effectiveness of this drug. 4. Performance will be measured against delivery timelines and drug quality standards. 5. This contract positions Exelan Pharmaceuticals as a key supplier within the VA's pharmaceutical sector. 6. The fixed-price contract offers cost certainty for the VA over the contract period.

Value Assessment

Rating: good

The award of $3.48 million for Lenalidomide appears reasonable given the drug's high cost and critical therapeutic use. Benchmarking against similar procurements for high-value pharmaceuticals is essential to fully assess value for money. While specific per-unit costs are not provided, the total contract value suggests a substantial quantity of the drug is being acquired. The firm fixed-price structure provides budget predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not detailed, but this competitive process is expected to drive fair pricing and encourage vendor performance. The VA's commitment to open competition suggests a robust market for this pharmaceutical.

Taxpayer Impact: Taxpayers benefit from the competitive process, which aims to secure the best possible price for this essential medication and reduce the risk of overpayment.

Public Impact

Veterans requiring Lenalidomide for cancer treatment will benefit from a secure supply of this medication. The services delivered include the provision of a critical pharmaceutical product. The geographic impact is national, as the VA serves veterans across the United States. Workforce implications are minimal, primarily related to the pharmaceutical supply chain and distribution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals.
Reliance on a single supplier for a critical medication could pose supply chain risks.
Ensuring consistent drug quality and efficacy over the contract term.

Positive Signals

Awarded through full and open competition, suggesting a competitive market.
Firm fixed-price contract provides cost certainty for the VA.
Long-term contract duration allows for consistent supply.

Sector Analysis

The pharmaceutical manufacturing sector is characterized by high research and development costs, stringent regulatory requirements, and significant market concentration for patented drugs. Lenalidomide is a high-value therapeutic agent used in treating multiple myeloma and other cancers. This contract fits within the broader category of federal healthcare spending on pharmaceuticals, which is a substantial portion of the overall healthcare budget. Comparable spending benchmarks would involve analyzing other large-volume, high-cost drug procurements by federal agencies.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the nature of pharmaceutical manufacturing and the specific drug, it is likely that larger, specialized pharmaceutical companies are the primary participants in such procurements. Subcontracting opportunities for small businesses are not explicitly mentioned but could potentially exist in areas like distribution or logistics.

Oversight & Accountability

Oversight will likely be managed by the Department of Veterans Affairs' contracting officers and program managers. Accountability measures will include adherence to delivery schedules, quality control of the pharmaceutical product, and compliance with all federal regulations. Transparency is facilitated through contract award databases, though detailed performance metrics may not be publicly available.

Related Government Programs

Department of Veterans Affairs Pharmaceutical Contracts
Oncology Drug Procurement
Federal Supply Schedule (FSS) for Pharmaceuticals
Department of Defense Pharmaceutical Spending

Risk Flags

Potential for supply chain disruption
Reliance on a single supplier for critical drug
Long-term cost-effectiveness requires ongoing monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.5 million to EXELAN PHARMACEUTICALS INC. VA GREATER LOS ANGELES LENALIDOMIDE DO

Who is the contractor on this award?

The obligated recipient is EXELAN PHARMACEUTICALS INC.

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 $3.5 million.

What is the period of performance?

Start: 2026-01-15. End: 2027-01-14.

What is the historical spending pattern for Lenalidomide by the VA?

Historical spending data for Lenalidomide by the VA would provide crucial context for evaluating the current $3.48 million award. Analyzing past contract values, durations, and awarded vendors can reveal trends in pricing, competition, and potential increases in demand or cost. For instance, if previous awards were significantly lower or higher, it would prompt questions about the reasons for the change, such as market fluctuations, increased patient need, or shifts in contracting strategy. Without this historical data, it is difficult to definitively assess whether the current award represents a fair market price or a deviation from established spending patterns. Further investigation into VA's pharmaceutical spending databases and contract histories would be necessary to provide a comprehensive answer.

How does the price per unit of Lenalidomide in this contract compare to market rates or other federal agencies?

A direct comparison of the per-unit cost of Lenalidomide under this VA contract to market rates or procurements by other federal agencies is essential for a value-for-money assessment. Lenalidomide is a high-cost medication, and its price can vary based on dosage, quantity, and negotiated discounts. Benchmarking against prices paid by agencies like the Department of Defense or through the General Services Administration's Federal Supply Schedule can highlight potential cost savings or areas where the VA might be overpaying. If the VA's price is significantly higher than comparable benchmarks, it could indicate less effective price negotiation, limited competition, or unique supply chain challenges. Conversely, a lower price would suggest successful procurement strategies. Detailed analysis requires access to specific unit pricing data from various sources.

What is Exelan Pharmaceuticals' track record with VA or other federal healthcare contracts?

Exelan Pharmaceuticals' track record with the VA and other federal healthcare agencies is a key indicator of their reliability and performance capabilities. A review of past contracts would reveal their history of on-time delivery, product quality, compliance with regulatory standards, and overall customer satisfaction. Experience with similar high-value pharmaceuticals, particularly those with critical patient impact, would be highly relevant. A history of successful contract performance suggests a lower risk for this current award. Conversely, any past performance issues, such as delivery delays, quality control problems, or contract disputes, would raise concerns and warrant closer scrutiny of their ability to meet the terms of this new agreement. Information on past performance can often be found in federal procurement databases and contractor performance assessment reports.

What are the primary risks associated with the supply chain for Lenalidomide?

The supply chain for Lenalidomide, like many specialized pharmaceuticals, carries several inherent risks. These include potential disruptions in the manufacturing process, reliance on specific raw material suppliers, and global logistics challenges. Geopolitical instability, natural disasters, or unforeseen events at manufacturing facilities could impact availability. Furthermore, regulatory changes or recalls affecting the drug or its components could create shortages. For a critical medication like Lenalidomide, any supply chain interruption could have severe consequences for veteran patient care. The VA's risk mitigation strategies, such as maintaining adequate inventory levels, diversifying suppliers where possible, and closely monitoring the manufacturer's supply chain, are crucial to ensuring uninterrupted access for patients.

How does the firm fixed-price contract structure impact risk and cost certainty for this pharmaceutical procurement?

A firm fixed-price (FFP) contract structure provides a high degree of cost certainty for the VA in this Lenalidomide procurement. Under an FFP agreement, the price is set and not subject to adjustment based on the contractor's cost experience. This shifts the risk of cost overruns entirely to the contractor, Exelan Pharmaceuticals. For the VA, this means the $3.48 million award represents the maximum liability, simplifying budget management and protecting against unexpected price increases. However, this structure also means that if Exelan Pharmaceuticals can produce the drug at a lower cost than anticipated, they will realize a higher profit margin. The success of an FFP contract relies on the government accurately defining the scope of work and the contractor having a clear understanding of their costs upfront.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 370 W CAMINO GARDENS BLVD STE 204, BOCA RATON, FL, 33432

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

Financial Breakdown

Contract Ceiling: $3,480,000

Exercised Options: $3,480,000

Current Obligation: $3,480,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C26226A0006

IDV Type: BPA

Timeline