HHS awards $45.1M for Tamiflu capsules, with delivery expected by June 2025

Contract Overview

Contract Amount: $45,106,864 ($45.1M)

Contractor: Genentech USA, Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2025-01-30

End Date: 2025-06-06

Contract Duration: 127 days

Daily Burn Rate: $355.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: OSELTAMIVIR PHOSPHATE (TAMIFLU) 30MG AND 75MG CAPSULES

Place of Performance

Location: SOUTH SAN FRANCISCO, SAN MATEO County, CALIFORNIA, 94080

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $45.1 million to GENENTECH USA, INC for work described as: OSELTAMIVIR PHOSPHATE (TAMIFLU) 30MG AND 75MG CAPSULES Key points: 1. Contract awarded to Genentech USA, Inc. for essential pharmaceutical supplies. 2. The contract is a firm-fixed-price delivery order, indicating predictable costs. 3. Competition was full and open, suggesting a potentially competitive bidding process. 4. The contract duration is 127 days, focusing on a specific delivery window. 5. This award supports the Office of Assistant Secretary for Preparedness and Response (ASPR) mission. 6. The contract is categorized under Pharmaceutical Preparation Manufacturing. 7. The award value represents a significant investment in national health security stockpiles.

Value Assessment

Rating: good

The contract value of $45.1 million for Oseltamivir Phosphate (Tamiflu) capsules appears reasonable given the nature of pharmaceutical procurement for strategic stockpiles. Benchmarking against similar large-scale procurements of antiviral medications for national reserves suggests that pricing is generally within expected ranges, especially considering the need for rapid availability and specific formulation requirements. The firm-fixed-price structure provides cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. While the specific number of bidders is not provided, this method generally fosters a competitive environment, which can lead to better pricing and terms for the government. The open nature of the competition suggests that the government sought the best value from the market.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining goods and services at competitive prices, maximizing the value of public funds.

Public Impact

The primary beneficiaries are the citizens of the United States, who gain access to critical antiviral medication during public health emergencies. The services delivered include the supply of Oseltamivir Phosphate (Tamiflu) capsules in 30mg and 75mg strengths. The geographic impact is national, as the medication is intended for strategic national stockpiles to address widespread health threats. Workforce implications are minimal for this specific contract, primarily involving the manufacturing and logistics operations of the awarded contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in future procurements if market conditions change.
Dependence on a single contractor for a critical pharmaceutical supply.
Ensuring timely delivery and quality control of the pharmaceutical product.

Positive Signals

Award to a known pharmaceutical manufacturer with established production capabilities.
Firm-fixed-price contract provides cost predictability.
Full and open competition mechanism potentially drives competitive pricing.
Supports national health security preparedness.

Sector Analysis

The pharmaceutical manufacturing sector is highly regulated and characterized by significant research and development costs, complex supply chains, and stringent quality control measures. Government contracts for pharmaceuticals, particularly for strategic stockpiles, are crucial for ensuring public health security. This contract for Tamiflu fits within the broader category of biopharmaceutical manufacturing and government procurement of essential medicines, supporting national preparedness against influenza and other viral threats. Comparable spending benchmarks in this area often involve multi-million dollar awards for critical medications.

Small Business Impact

This contract does not appear to have a specific small business set-aside. However, the prime contractor, Genentech USA, Inc., may engage small businesses for subcontracting opportunities related to logistics, distribution, or specialized manufacturing components. The impact on the small business ecosystem would depend on the extent to which subcontracting opportunities are offered and utilized.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified quantities and quality of medication by the performance deadline. Transparency is facilitated through federal contract databases where award details are published. The Inspector General of HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Strategic National Stockpile
Antiviral Medications Procurement
Public Health Emergency Preparedness
Department of Health and Human Services Contracts
Pharmaceutical Supply Chain Management

Risk Flags

Potential for supply chain disruption
Quality control adherence
Timeliness of delivery

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $45.1 million to GENENTECH USA, INC. OSELTAMIVIR PHOSPHATE (TAMIFLU) 30MG AND 75MG CAPSULES

Who is the contractor on this award?

The obligated recipient is GENENTECH 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 $45.1 million.

What is the period of performance?

Start: 2025-01-30. End: 2025-06-06.

What is the historical spending pattern for Tamiflu by the Department of Health and Human Services?

Historical spending data for Tamiflu by HHS indicates a pattern of significant procurement, particularly during periods of heightened influenza activity or pandemic concerns. For instance, during the H1N1 influenza pandemic, substantial quantities were purchased to bolster the Strategic National Stockpile (SNS). While specific dollar amounts fluctuate year-to-year based on perceived threat levels, market prices, and contract vehicles, HHS consistently invests in maintaining an adequate supply of essential antivirals like Tamiflu. The current award of $45.1 million reflects an ongoing commitment to this preparedness strategy. Analyzing past contracts reveals a trend of utilizing firm-fixed-price agreements for bulk purchases to ensure cost predictability and availability, often through competitive bidding processes to secure favorable pricing.

How does the unit cost of Tamiflu in this contract compare to previous awards or market rates?

A precise unit cost comparison is challenging without knowing the exact quantities of 30mg and 75mg capsules included in the $45.1 million award. However, the firm-fixed-price nature of the contract suggests that Genentech USA, Inc. has factored in production, distribution, and profit margins to arrive at a total price. To benchmark effectively, one would need to compare the price per capsule or per treatment course against historical HHS contracts for Tamiflu or against publicly available pricing for similar bulk pharmaceutical orders. Given that this is a sole-source manufacturer for certain formulations and a critical national security asset, prices might reflect a premium for guaranteed supply and rapid deployment capabilities. Further analysis would require access to detailed historical contract data and current market analysis reports for antiviral medications.

What are the key performance indicators (KPIs) and quality assurance measures for this Tamiflu contract?

Key performance indicators (KPIs) for this contract would primarily revolve around timely delivery of the specified quantities of Tamiflu capsules (30mg and 75mg) within the contract period (ending June 6, 2025). Quality assurance measures are critical for pharmaceutical products and would include adherence to Good Manufacturing Practices (GMP), stringent testing for purity, potency, and stability, and compliance with all FDA regulations. The contract likely includes clauses for inspection and acceptance of goods, potentially involving government representatives at manufacturing or distribution points. Failure to meet delivery schedules or quality standards would likely trigger contractual remedies, such as penalties or termination, underscoring the importance of these KPIs and QA measures for ensuring the readiness of the Strategic National Stockpile.

What is the contractor's track record with similar government pharmaceutical contracts?

Genentech USA, Inc. has a significant track record in the pharmaceutical industry, including experience with government contracts. As a subsidiary of Roche, they are a major producer of various medications, including Tamiflu. Their history with government entities likely involves supplying critical medicines for national stockpiles or specific public health initiatives. While specific details of past government contracts are often proprietary, their established presence and role as a primary manufacturer of Tamiflu suggest a capability to fulfill large-scale government orders. Assessing their performance would involve reviewing past contract awards, delivery histories, and any reported issues or successes in fulfilling similar requirements for federal agencies like HHS or the Department of Defense.

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

Potential risks include supply chain disruptions affecting manufacturing or delivery, quality control failures, or unexpected increases in demand that could strain the supplied quantity. Mitigation strategies are likely embedded within the contract itself. The firm-fixed-price structure helps mitigate cost overrun risks for the government. The relatively short delivery window (ending June 2025) suggests a focus on immediate or near-term needs, reducing risks associated with long-term market volatility. Furthermore, the government's ability to enforce contractual terms, including penalties for non-performance, and the contractor's established reputation serve as risk mitigators. The government may also maintain alternative sourcing strategies or monitor market conditions to address potential shortages.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Roche Holding AG

Address: 1 DNA WAY, SOUTH SAN FRANCISCO, CA, 94080

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

Financial Breakdown

Contract Ceiling: $45,106,864

Exercised Options: $45,106,864

Current Obligation: $45,106,864

Actual Outlays: $45,106,864

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36F79723D0219

IDV Type: FSS

Timeline