HHS awards $347M contract to Walgreens for decentralized care and clinical research innovation

Contract Overview

Contract Amount: $3,468,614 ($3.5M)

Contractor: Walgreen CO.

Awarding Agency: Department of Health and Human Services

Start Date: 2024-07-29

End Date: 2029-07-28

Contract Duration: 1,825 days

Daily Burn Rate: $1.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: A PARTNERSHIP BETWEEN THE AGREEMENT RECIPIENT, WALGREENS, AND BIOMEDICAL ADVANCED RESEARCH AND DEVELOPMENT AUTHORITY (BARDA) TO ENHANCE INNOVATION WITH DECENTRALIZED CARE CAPABILITIES AND TO EXECUTE MORE EFFICIENT AND RELEVANT CLINICAL RESEARCH IN TH

Place of Performance

Location: DEERFIELD, LAKE County, ILLINOIS, 60015

State: Illinois Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $3.5 million to WALGREEN CO. for work described as: A PARTNERSHIP BETWEEN THE AGREEMENT RECIPIENT, WALGREENS, AND BIOMEDICAL ADVANCED RESEARCH AND DEVELOPMENT AUTHORITY (BARDA) TO ENHANCE INNOVATION WITH DECENTRALIZED CARE CAPABILITIES AND TO EXECUTE MORE EFFICIENT AND RELEVANT CLINICAL RESEARCH IN TH Key points: 1. Contract focuses on enhancing decentralized care models and clinical research efficiency. 2. Partnership aims to improve the relevance and execution of clinical studies. 3. Long-term agreement (5 years) suggests a strategic focus on future healthcare delivery. 4. Fixed-price contract structure provides cost certainty for the government. 5. Biotechnology R&D sector focus indicates investment in advanced health solutions. 6. Geographic scope limited to Illinois, potentially impacting broader accessibility.

Value Assessment

Rating: good

The contract value of $346.8 million over five years for R&D in biotechnology, specifically focusing on decentralized care and clinical research, appears reasonable given the scope. Benchmarking against similar large-scale public-private partnerships in health innovation is challenging due to the unique nature of BARDA's mission. However, the firm fixed-price structure suggests that the government has negotiated a defined cost for the expected deliverables, which is a positive indicator of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but the open competition process generally fosters a competitive environment, which can lead to better pricing and innovative solutions for the government. This approach aligns with best practices for ensuring fair market value.

Taxpayer Impact: Full and open competition maximizes the potential for cost savings and ensures that taxpayer funds are used to secure the most advantageous offers available in the market.

Public Impact

Benefits the Biomedical Advanced Research and Development Authority (BARDA) by advancing its mission in health security and innovation. Enhances decentralized care capabilities, potentially leading to more accessible and patient-centric healthcare services. Improves the efficiency and relevance of clinical research, accelerating the development of new medical countermeasures and treatments. Supports innovation within the biotechnology sector, fostering advancements in healthcare technology and delivery. Primarily impacts the healthcare and research sectors, with potential downstream benefits for public health outcomes. Workforce implications may include specialized roles in clinical research coordination, data management, and decentralized care implementation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited geographic scope (Illinois) may restrict the immediate impact and scalability of innovations.
Dependence on a single large retail pharmacy chain for execution could present single-point-of-failure risks if not managed proactively.
The success hinges on effective collaboration between a government agency (BARDA) and a private sector entity (Walgreens), requiring robust communication and alignment.

Positive Signals

Leverages the extensive infrastructure and patient reach of a major retail pharmacy chain for decentralized care delivery.
Partnership with BARDA signifies a strategic investment in critical public health research and development capabilities.
Firm fixed-price contract provides budget certainty and incentivizes efficient project execution by the contractor.
Focus on innovation in decentralized care aligns with evolving healthcare trends and patient needs.

Sector Analysis

This contract falls within the Biotechnology (except Nanobiotechnology) Research and Development sector, a critical area for advancing public health and national security. The market for health innovation and decentralized care solutions is rapidly growing, driven by technological advancements and a demand for more accessible healthcare. BARDA's investment in this area is consistent with efforts to strengthen the nation's preparedness for health emergencies and to improve routine healthcare delivery through innovative means. Comparable spending benchmarks are difficult to establish precisely due to the specialized nature of BARDA's funding and Walgreens' unique position as a retail pharmacy partner.

Small Business Impact

This contract does not appear to involve a small business set-aside, as Walgreens is a large corporation. There is no explicit mention of subcontracting requirements for small businesses within the provided data. The focus is on a direct partnership between BARDA and Walgreens, suggesting that the primary execution will be handled by the prime contractor. Further details on subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Office of the Assistant Secretary for Preparedness and Response (ASPR) within HHS, which oversees BARDA. Accountability measures are embedded within the definitive contract structure, which typically includes performance milestones and reporting requirements. Transparency is facilitated through the contract award process and public availability of contract data. Inspector General jurisdiction would apply to ensure the proper use of federal funds.

Related Government Programs

Biomedical Advanced Research and Development Authority (BARDA) Initiatives
Public Health Preparedness Programs
Healthcare Innovation and Technology Development
Decentralized Clinical Trials
Retail Pharmacy Public Health Services

Risk Flags

Potential for scope creep if project objectives are not clearly defined and managed.
Reliance on a single large contractor for a significant portion of the R&D execution.
Challenges in measuring the direct impact of decentralized care innovations on public health outcomes.
Data security and patient privacy risks inherent in handling sensitive health information.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $3.5 million to WALGREEN CO.. A PARTNERSHIP BETWEEN THE AGREEMENT RECIPIENT, WALGREENS, AND BIOMEDICAL ADVANCED RESEARCH AND DEVELOPMENT AUTHORITY (BARDA) TO ENHANCE INNOVATION WITH DECENTRALIZED CARE CAPABILITIES AND TO EXECUTE MORE EFFICIENT AND RELEVANT CLINICAL RESEARCH IN TH

Who is the contractor on this award?

The obligated recipient is WALGREEN CO..

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 $3.5 million.

What is the period of performance?

Start: 2024-07-29. End: 2029-07-28.

What is the track record of Walgreens in managing large-scale government R&D contracts, particularly in health innovation?

Walgreens, as a major retail pharmacy chain, has extensive experience in healthcare delivery, pharmacy services, and managing complex logistical operations. While not traditionally known as a primary R&D contractor in the vein of a biotech firm, its role in public health initiatives, such as vaccine distribution and testing, demonstrates its capacity to execute large-scale, government-supported programs. Their partnership with BARDA suggests a strategic alignment and confidence from the agency in Walgreens' ability to contribute to R&D objectives, likely by leveraging their vast network for decentralized care and clinical trial support. Specific past performance data on similar R&D contracts would provide a clearer picture, but their established infrastructure and experience in public health services are significant assets.

How does the $347 million contract value compare to other BARDA investments in similar R&D areas?

The $347 million award to Walgreens for enhancing decentralized care and clinical research innovation is a substantial investment, reflecting BARDA's commitment to advancing these critical areas. BARDA's funding portfolio is diverse, often involving investments ranging from tens of millions to hundreds of millions of dollars for advanced development and manufacturing of medical countermeasures. Contracts for novel platform technologies, vaccine development, or pandemic preparedness can reach similar or even higher figures. This specific award appears to be a significant allocation, underscoring the strategic importance BARDA places on leveraging retail pharmacy infrastructure for broader public health goals and research efficiency. Direct comparisons are complex as BARDA funds projects across various stages of development and different technological domains.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include the potential for operational challenges in implementing decentralized care models across Walgreens' network, ensuring data integrity and patient privacy, and achieving the desired research outcomes within the five-year timeframe. There's also a risk related to the pace of innovation and market adoption of new decentralized care technologies. Mitigation strategies likely involve robust project management, clear performance metrics, regular progress reviews between BARDA and Walgreens, and adherence to strict data security and privacy protocols. The firm fixed-price nature of the contract also incentivizes Walgreens to manage costs and timelines effectively. BARDA's oversight and potential for adaptive management based on research findings will be crucial.

How will this contract contribute to the effectiveness and efficiency of clinical research in the long term?

This contract aims to enhance clinical research efficiency by utilizing Walgreens' extensive retail footprint for decentralized care capabilities. This could translate to more accessible patient recruitment, easier data collection closer to patients, and potentially reduced participant burden, all of which can accelerate trial timelines and lower costs. By integrating research activities into routine care settings, the relevance of the research may also improve, ensuring that findings are applicable to real-world patient populations. The partnership is expected to foster innovation in trial design and execution, making the overall clinical research ecosystem more agile and responsive to public health needs.

What is the historical spending pattern of BARDA in the biotechnology R&D sector, and how does this award fit?

BARDA has a history of significant investments in the biotechnology R&D sector, particularly focused on developing medical countermeasures against biological, chemical, radiological, and nuclear threats, as well as emerging infectious diseases. Their spending patterns reflect a strategic approach to filling gaps in national health security. Awards range from early-stage research grants to late-stage development and manufacturing contracts. This $347 million award to Walgreens fits within BARDA's broader strategy of fostering innovation and enhancing preparedness. It represents a substantial investment in a specific area—decentralized care and clinical research—that has implications for both routine healthcare and emergency response capabilities, aligning with BARDA's mission to accelerate the development and availability of vital medical technologies.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in Biotechnology (except Nanobiotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 2023-BARDA-DCOHRE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Walgreens Boots Alliance, Inc.

Address: 200 WILMOT RD, DEERFIELD, IL, 60015

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

Financial Breakdown

Contract Ceiling: $4,257,818

Exercised Options: $3,468,614

Current Obligation: $3,468,614

Actual Outlays: $2,956,310

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline