HHS awards $154M for Colony Stimulating Factors to Amgen USA Inc. to mitigate radiation exposure risks

Contract Overview

Contract Amount: $154,444,070 ($154.4M)

Contractor: Amgen USA Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2018-09-13

End Date: 2024-03-12

Contract Duration: 2,007 days

Daily Burn Rate: $77.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::OT::IGF RTOR NUMBER: RTOR-CSF-0005 ACQUISITION OF COLONY STIMULATING FACTOR(S) (G-CSF OR GM-CSF) FOR MITIGATION OF NEUTROPENIA ARISING FROM EXPOSURE TO IONIZING RADIATION

Place of Performance

Location: NEWBURY PARK, VENTURA County, CALIFORNIA, 91320

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $154.4 million to AMGEN USA INC for work described as: IGF::OT::IGF RTOR NUMBER: RTOR-CSF-0005 ACQUISITION OF COLONY STIMULATING FACTOR(S) (G-CSF OR GM-CSF) FOR MITIGATION OF NEUTROPENIA ARISING FROM EXPOSURE TO IONIZING RADIATION Key points: 1. Contract value of $154.4 million over six years indicates a significant investment in strategic medical countermeasures. 2. The acquisition of G-CSF or GM-CSF addresses a critical need for mitigating neutropenia from radiation exposure. 3. Sole supplier Amgen USA Inc. raises questions about long-term pricing and availability without competitive pressure. 4. The firm fixed-price contract structure aims to control costs, but market dynamics for specialized biologics can be volatile. 5. Performance is tied to delivery orders, suggesting a phased approach to fulfilling the government's needs. 6. The contract's duration and scope suggest a long-term commitment to national biodefense preparedness.

Value Assessment

Rating: fair

The contract value of $154.4 million for Colony Stimulating Factors (G-CSF or GM-CSF) over approximately six years appears substantial. Benchmarking this against similar government procurements for biodefense countermeasures is challenging due to the specialized nature of the product and its specific application for radiation mitigation. Without more data on the quantity and specific formulations procured, a precise value-for-money assessment is difficult. However, the sole-source nature of the award (as indicated by the single bidder in the provided data, though the competition type is listed as 'FULL AND OPEN COMPETITION') warrants scrutiny regarding potential price inflation compared to a more competitive market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract is listed as 'FULL AND OPEN COMPETITION,' yet the data indicates only two bids were received, and the awardee is Amgen USA Inc. This suggests that while the opportunity was broadly advertised, the actual competitive landscape was limited. The low number of bidders for such a critical and high-value contract may indicate high barriers to entry for other manufacturers, such as specialized manufacturing capabilities, regulatory hurdles, or existing long-term relationships. This limited competition could impact price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: A limited number of bidders in a full and open competition means taxpayers may not be benefiting from the most competitive pricing achievable. This could translate to a higher overall expenditure for the same quantity and quality of medical countermeasures.

Public Impact

The primary beneficiaries are individuals potentially exposed to ionizing radiation, including military personnel, first responders, and the general public in the event of a radiological incident. The services delivered involve the procurement and stockpiling of critical biological products (G-CSF or GM-CSF) essential for treating radiation-induced neutropenia. The geographic impact is national, focusing on maintaining a strategic medical reserve for public health emergencies. Workforce implications are indirect, primarily supporting the pharmaceutical manufacturing sector and the government's public health preparedness workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price escalation due to limited competition in a specialized market.
Dependence on a single supplier for a critical biodefense countermeasure could pose supply chain risks.
The long-term nature of the contract requires ongoing monitoring to ensure continued value and performance.

Positive Signals

Addresses a critical national security and public health need for radiation countermeasure.
Firm fixed-price contract provides cost certainty for the government.
Long contract duration (2007 total duration, ending 2024) suggests a stable supply chain for a vital product.

Sector Analysis

The acquisition of Colony Stimulating Factors falls within the broader pharmaceutical and biotechnology sector, specifically focusing on biologics manufacturing and biodefense countermeasures. This market is characterized by high research and development costs, stringent regulatory requirements (FDA), and often involves specialized production facilities. Government procurements in this area are crucial for maintaining national stockpiles of medical supplies for public health emergencies. Comparable spending benchmarks are difficult to establish without detailed product specifications and quantities, but significant government investments are typical for such strategic assets.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract. Given the specialized nature of manufacturing biological products like G-CSF or GM-CSF, it is likely that large, established pharmaceutical companies are the primary participants. There is no explicit information on subcontracting plans with small businesses, suggesting that the direct impact on the small business ecosystem may be minimal for this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). Mechanisms likely include regular performance reviews, delivery tracking, and financial audits. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Strategic National Stockpile (SNS)
Biodefense Medical Countermeasures
National Disaster Medical System (NDMS)
Department of Health and Human Services (HHS) Preparedness Programs

Risk Flags

Limited competition despite 'full and open' designation.
Potential for price increases due to sole-source nature of supply.
Supply chain vulnerability if the single manufacturer faces disruptions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $154.4 million to AMGEN USA INC. IGF::OT::IGF RTOR NUMBER: RTOR-CSF-0005 ACQUISITION OF COLONY STIMULATING FACTOR(S) (G-CSF OR GM-CSF) FOR MITIGATION OF NEUTROPENIA ARISING FROM EXPOSURE TO IONIZING RADIATION

Who is the contractor on this award?

The obligated recipient is AMGEN USA INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of Assistant Secretary for Preparedness and Response).

What is the total obligated amount?

The obligated amount is $154.4 million.

What is the period of performance?

Start: 2018-09-13. End: 2024-03-12.

What is the historical spending pattern for Colony Stimulating Factors by the Department of Health and Human Services?

Historical spending data for Colony Stimulating Factors (G-CSF or GM-CSF) by HHS, particularly for radiation mitigation purposes, is not readily available in a consolidated public format. However, the provided contract (RTOR-CSF-0005) represents a significant single award of $154.4 million from 2018 to 2024. This suggests a substantial and ongoing commitment to acquiring these critical medical countermeasures. Prior to this award, HHS may have utilized other contracts, potentially with different awardees or for different quantities and formulations, to build its stockpile. Analyzing historical spending would require a deep dive into contract databases for similar product codes and agencies involved in biodefense, looking for trends in procurement volume, pricing, and supplier diversity over time. The current contract's duration and value indicate a strategic, long-term investment rather than sporadic purchases.

How does the unit cost of G-CSF or GM-CSF in this contract compare to market rates or other government contracts?

Determining the precise unit cost for G-CSF or GM-CSF within this $154.4 million contract is challenging without access to the specific quantities and formulations procured under each delivery order. The contract is for 'Biological Product (except Diagnostic) Manufacturing' and is a 'FIRM FIXED PRICE' type. While Amgen USA Inc. is a known manufacturer of G-CSF (Neupogen/Neulasta) and GM-CSF (Neulasta), the government may be procuring specific formulations or quantities tailored for emergency use, which might differ from standard commercial products. Benchmarking against other government contracts is difficult without knowing the exact product specifications and volumes. However, given the specialized nature and the limited competition indicated (despite 'full and open' listing), the price could be at a premium compared to a highly competitive market. A thorough analysis would require comparing the negotiated price per dose or vial against publicly available pricing for similar products, adjusted for bulk purchasing and specific government requirements.

What are the key performance indicators (KPIs) and delivery schedules associated with this contract?

The contract details indicate a 'DELIVERY ORDER' award type, suggesting that specific quantities and delivery timelines are established through individual orders placed against the contract. The contract duration is from September 13, 2018, to March 12, 2024, spanning approximately 2007 days (or about 5.5 years). Key performance indicators (KPIs) would likely focus on the timely delivery of the specified biological products, adherence to quality standards (e.g., sterility, potency), and proper storage and handling conditions to maintain product integrity. The government, through ASPR, would monitor these aspects to ensure the readiness of the medical countermeasures for deployment during a radiation emergency. Specific delivery schedules would be detailed within each delivery order, likely prioritizing the maintenance and replenishment of the Strategic National Stockpile.

What is Amgen USA Inc.'s track record with the government for similar biodefense contracts?

Amgen USA Inc. has a significant track record as a provider of Colony Stimulating Factors (G-CSF and GM-CSF) and has engaged with government agencies, including the Department of Health and Human Services (HHS), for these products. Their commercial products like Neupogen (filgrastim) and Neulasta (pegfilgrastim) are well-established treatments for chemotherapy-induced neutropenia, and their utility in mitigating radiation-induced neutropenia is recognized. Government contracts for biodefense stockpiling often involve large pharmaceutical manufacturers with proven production capabilities and regulatory compliance. While specific details of past contracts may vary, Amgen's consistent presence as a supplier for critical biologics suggests a recognized capacity to meet government requirements for quality, quantity, and delivery, particularly in areas related to immune support and blood cell production.

What are the potential risks associated with relying on a single supplier for this critical countermeasure?

Relying on a single supplier, even if the competition was initially 'full and open,' presents several risks for a critical countermeasure like Colony Stimulating Factors. Firstly, there's the risk of supply chain disruption. If the sole supplier faces manufacturing issues, quality control problems, or natural disasters affecting their facilities, the government's supply could be jeopardized. Secondly, the lack of ongoing competition can lead to price escalation over time, as the supplier may have less incentive to offer competitive pricing. Thirdly, it limits the government's flexibility to adopt newer or improved formulations if they become available from alternative manufacturers. Finally, dependence on one entity can create leverage for the supplier in negotiations, potentially impacting contract terms and conditions beyond just price.

How does this contract align with the broader goals of the Strategic National Stockpile (SNS)?

This contract is directly aligned with the core mission of the Strategic National Stockpile (SNS), which is to maintain a national repository of essential medicines and medical supplies to prepare for and respond to public health emergencies, including those involving chemical, biological, radiological, and nuclear (CBRN) threats. Colony Stimulating Factors are crucial for treating acute radiation syndrome (ARS), specifically the neutropenia component, which significantly increases the risk of life-threatening infections. By procuring these agents, HHS, through ASPR, ensures that the SNS has a readily available supply to mitigate the health consequences of radiation exposure incidents, thereby protecting the public and supporting the nation's response capabilities.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Biological Product (except Diagnostic) 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

Solicitation ID: 12100SOL00016

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Amgen Inc.

Address: 1 AMGEN CTR DR, THOUSAND OAKS, CA, 91320

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

Financial Breakdown

Contract Ceiling: $154,445,489

Exercised Options: $154,444,070

Current Obligation: $154,444,070

Actual Outlays: $251,411

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: PRODUCTS OR SERVICES PURSUANT TO FAR 12.102(F)

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSO100201300006I

IDV Type: IDC

Timeline