McKesson Awarded $21.2M for Pharmacy Services to Indian Health Service in FY24

Contract Overview

Contract Amount: $21,200,000 ($21.2M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2024-08-09

End Date: 2025-04-30

Contract Duration: 264 days

Daily Burn Rate: $80.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: NNMC - MCKESSON VA FSS PV PHARMACY FY 24

Place of Performance

Location: IRVING, DALLAS County, TEXAS, 75039

State: Texas Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $21.2 million to MCKESSON CORPORATION for work described as: NNMC - MCKESSON VA FSS PV PHARMACY FY 24 Key points: 1. Significant contract value highlights the scale of pharmaceutical needs. 2. McKesson Corporation is a major player in the healthcare supply chain. 3. Potential risks include supply chain disruptions and price fluctuations. 4. The sector is critical for public health delivery.

Value Assessment

Rating: good

The $21.2 million award for FY24 appears reasonable given the scope of pharmaceutical preparation manufacturing and distribution. Benchmarking against similar large-scale federal pharmacy contracts would provide a more precise valuation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process that likely led to a fair price discovery. This method is generally preferred for maximizing value.

Taxpayer Impact: The competitive award aims to ensure taxpayer funds are used efficiently for essential pharmaceutical supplies.

Public Impact

Ensures access to vital medications for IHS beneficiaries. Supports the operational readiness of healthcare facilities within the IHS. Contributes to the overall public health infrastructure managed by HHS.

Waste & Efficiency Indicators

Waste Risk Score: 80 / 10

Positive Signals

Full and open competition utilized.
Clear contract duration and delivery period.
Firm fixed price contract type.

Sector Analysis

The pharmaceutical preparation manufacturing sector is essential for government healthcare providers like the Indian Health Service. Spending in this area is driven by patient needs and public health initiatives.

Small Business Impact

This contract does not appear to directly benefit small businesses, as McKesson Corporation is a large, established entity. Future contracts could explore opportunities for small business participation in the supply chain.

Oversight & Accountability

The Department of Health and Human Services, through the Indian Health Service, is responsible for oversight. Contract performance monitoring and adherence to terms are crucial for accountability.

Related Government Programs

Pharmaceutical Preparation Manufacturing
Department of Health and Human Services Contracting
Indian Health Service Programs

Risk Flags

Potential for supply chain disruptions.
Reliance on a single large supplier.
Price volatility in pharmaceutical markets.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $21.2 million to MCKESSON CORPORATION. NNMC - MCKESSON VA FSS PV PHARMACY FY 24

Who is the contractor on this award?

The obligated recipient is MCKESSON CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Indian Health Service).

What is the total obligated amount?

The obligated amount is $21.2 million.

What is the period of performance?

Start: 2024-08-09. End: 2025-04-30.

What is the historical pricing trend for similar pharmaceutical services awarded by IHS or other federal agencies?

Analyzing historical pricing data for comparable pharmaceutical services is crucial for validating the current award's value. Trends in raw material costs, manufacturing complexity, and market competition significantly influence pricing. A review of past contracts, adjusted for inflation and scope differences, would reveal if this $21.2 million award represents a fair market price or if there are opportunities for cost savings in future solicitations.

What are the primary risks associated with McKesson's ability to fulfill this contract, considering their market position?

While McKesson is a large, established supplier, risks include potential supply chain disruptions (e.g., manufacturing delays, transportation issues), drug shortages, or significant price volatility in pharmaceutical ingredients. Their dominant market position could also raise concerns about long-term price competitiveness if future competition is limited. Robust performance monitoring and contingency planning by IHS are essential to mitigate these risks.

How effectively does this contract support the IHS's mission to provide comprehensive healthcare to American Indians and Alaska Natives?

This contract is vital for ensuring the consistent availability of necessary pharmaceuticals, directly supporting the IHS's mission. Reliable access to medications is fundamental for treating acute and chronic conditions, managing public health crises, and improving health outcomes for beneficiaries. The contract's effectiveness hinges on timely delivery, quality of products, and the ability to meet the diverse pharmaceutical needs across IHS facilities.

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: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6555 STATE HIGHWAY 161, IRVING, TX, 75039

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

Financial Breakdown

Contract Ceiling: $28,700,000

Exercised Options: $21,200,000

Current Obligation: $21,200,000

Actual Outlays: $19,061,909

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36W79720D0001

IDV Type: IDC

Timeline