HHS awards $227.7M for Oseltamivir Phosphate capsules, with Alvogen, Inc. as the primary contractor

Contract Overview

Contract Amount: $227,679,090 ($227.7M)

Contractor: Alvogen, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2025-06-30

End Date: 2027-06-29

Contract Duration: 729 days

Daily Burn Rate: $312.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: OSELTAMIVIR PHOSPHATE 75MG CAPSULES (NDC: 47781-470-13); 10 CT. BLISTERS PACKS AND OSELTAMIVIR PHOSPHATE 30MG CAPSULES (NDC: 47781-468-13); 10 CT. BLISTERS PACKS.

Place of Performance

Location: PINE BROOK, MORRIS County, NEW JERSEY, 07058

State: New Jersey Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $227.7 million to ALVOGEN, INC. for work described as: OSELTAMIVIR PHOSPHATE 75MG CAPSULES (NDC: 47781-470-13); 10 CT. BLISTERS PACKS AND OSELTAMIVIR PHOSPHATE 30MG CAPSULES (NDC: 47781-468-13); 10 CT. BLISTERS PACKS. Key points: 1. Contract value represents a significant investment in pharmaceutical preparedness. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The duration of the contract (729 days) indicates a long-term supply need. 4. The fixed-price nature of the contract provides cost certainty for the government. 5. The contract is for a specific pharmaceutical product, highlighting a targeted procurement strategy. 6. The award to Alvogen, Inc. suggests a reliance on established pharmaceutical manufacturers.

Value Assessment

Rating: good

The contract value of $227.7 million for Oseltamivir Phosphate capsules over two years appears to be within a reasonable range for large-scale pharmaceutical procurement, especially considering national stockpile requirements. Benchmarking against similar large-volume antiviral drug contracts would provide a more precise value-for-money assessment. The firm fixed-price structure helps manage cost fluctuations, but the ultimate value depends on the unit price negotiated relative to market rates and competitor bids.

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 were solicited and considered. The presence of three bidders suggests a healthy level of competition for this significant pharmaceutical supply contract. This competitive environment is expected to drive more favorable pricing and ensure the government secures a reliable supply of Oseltamivir Phosphate.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price for essential medications, reducing the risk of overpayment and ensuring funds are used efficiently.

Public Impact

The primary beneficiaries are the public, who will have access to Oseltamivir Phosphate for influenza treatment and prophylaxis during public health emergencies. The services delivered include the manufacturing and supply of Oseltamivir Phosphate capsules in specific dosages and packaging. The geographic impact is national, ensuring availability across the United States through the Department of Health and Human Services. Workforce implications are primarily within the pharmaceutical manufacturing sector, supporting jobs at Alvogen, Inc. and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition diminishes.
Reliance on a single primary contractor could pose supply chain risks if unforeseen issues arise with Alvogen, Inc.
The specific therapeutic area (antivirals) might be subject to rapid market changes due to new drug development.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Firm fixed-price contract provides cost predictability for the government.
Long contract duration suggests a stable, long-term supply agreement for a critical medication.
The procurement supports national health security by ensuring availability of essential medicines.

Sector Analysis

The pharmaceutical manufacturing sector is characterized by high R&D costs, stringent regulatory requirements, and significant economies of scale. This contract falls within the broader pharmaceutical preparation manufacturing industry, which is crucial for national health security and emergency preparedness. Comparable spending benchmarks would involve analyzing other large-volume procurements of antiviral medications or essential drugs by government agencies like HHS or the Department of Defense.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. This suggests that the primary award went to a larger entity, and the direct impact on the small business ecosystem may be limited unless Alvogen, Inc. actively engages small businesses in its supply chain. Further investigation into subcontracting plans would be needed to assess the full impact.

Oversight & Accountability

Oversight for this contract will likely be managed by the Office of Assistant Secretary for Preparedness and Response (ASPR) within HHS. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified pharmaceutical products by the agreed-upon deadlines. Transparency is facilitated through public contract databases, though detailed performance metrics and specific pricing breakdowns may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

National Biodefense Strategy
Strategic National Stockpile
Influenza Preparedness Programs
Antiviral Drug Procurement
Public Health Emergency Response

Risk Flags

Potential supply chain vulnerability
Long-term reliance on specific drug formulation
Contractor performance risk
Market price volatility for raw materials

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $227.7 million to ALVOGEN, INC.. OSELTAMIVIR PHOSPHATE 75MG CAPSULES (NDC: 47781-470-13); 10 CT. BLISTERS PACKS AND OSELTAMIVIR PHOSPHATE 30MG CAPSULES (NDC: 47781-468-13); 10 CT. BLISTERS PACKS.

Who is the contractor on this award?

The obligated recipient is ALVOGEN, 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 $227.7 million.

What is the period of performance?

Start: 2025-06-30. End: 2027-06-29.

What is Alvogen, Inc.'s track record with government pharmaceutical contracts, particularly for antivirals?

Alvogen, Inc. has a history of supplying pharmaceutical products, including generics. While specific details on their track record with large-scale government antiviral contracts like this one require deeper analysis of federal procurement databases, their ability to secure this significant award suggests they meet the necessary qualifications and performance standards. Examining past performance evaluations and any contract disputes or awards related to similar products would provide a clearer picture of their reliability and experience in fulfilling government requirements for critical medications.

How does the unit price of Oseltamivir Phosphate in this contract compare to market rates or previous government purchases?

Determining the precise unit price requires access to the detailed contract line items, which are not fully provided in the summary data. However, the total award of $227.7 million over approximately two years for Oseltamivir Phosphate capsules suggests a substantial volume. To benchmark the value, one would compare the implied per-unit cost against prices paid by other government agencies (e.g., VA, DoD) for the same or comparable formulations, as well as against prices available in the commercial market for bulk purchases. Fluctuations in raw material costs, manufacturing efficiencies, and competitive bidding outcomes significantly influence unit pricing.

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

Key risks include potential supply chain disruptions (e.g., manufacturing issues, raw material shortages), quality control failures, and the possibility of the contracted drug becoming less effective against evolving viral strains. Mitigation strategies likely involve stringent quality assurance clauses in the contract, requirements for Alvogen, Inc. to maintain adequate inventory and production capacity, and potentially backup suppliers or alternative drug options being considered by HHS. The firm fixed-price nature also mitigates the risk of cost overruns for the government, provided the contractor meets delivery obligations.

How effective is the Strategic National Stockpile (SNS) in ensuring the availability of Oseltamivir Phosphate during a pandemic?

The SNS plays a critical role in ensuring the availability of Oseltamivir Phosphate and other essential medical countermeasures during public health emergencies. Contracts like this one are specifically designed to replenish and maintain the SNS inventory. The effectiveness of the SNS relies on accurate demand forecasting, timely procurement, proper storage and maintenance of supplies, and efficient distribution protocols. This contract directly contributes to the SNS's readiness by securing a large supply of a key antiviral medication, thereby enhancing national preparedness against influenza pandemics.

What has been the historical spending trend for Oseltamivir Phosphate by the Department of Health and Human Services?

Historical spending data for Oseltamivir Phosphate by HHS would reveal patterns of procurement driven by factors such as perceived pandemic risk, inventory levels, and the expiration of existing supplies. Analyzing past contracts, including their values, durations, and awarded vendors, would indicate whether this $227.7 million award represents a significant increase or decrease in spending. Such analysis could also highlight shifts in contracting strategies, such as changes in competition levels or the types of contract vehicles used over time.

What are the implications of this contract for the broader pharmaceutical market and competition among antiviral drug manufacturers?

This large-value contract awarded under full and open competition signals a significant demand for Oseltamivir Phosphate, potentially influencing market dynamics for other antiviral manufacturers. It demonstrates that established players like Alvogen, Inc. can successfully compete for substantial government orders. The competitive process itself encourages other manufacturers to maintain high standards and competitive pricing to vie for future contracts. However, the concentration of such a large award to one entity could also indicate market consolidation or specific manufacturing capabilities that are difficult for smaller firms to match.

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

Solicitation ID: 75A50325Q00001

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Stroz Friedberg, LLC

Address: 10 BLOOMFIELD AVE STE 3, PINE BROOK, NJ, 07058

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

Financial Breakdown

Contract Ceiling: $227,679,090

Exercised Options: $227,679,090

Current Obligation: $227,679,090

Actual Outlays: $52,700,832

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: V797D70134

IDV Type: FSS

Timeline