HHS's Indian Health Service awards $250K contract for pharmaceutical supplies to McKesson Corporation
Contract Overview
Contract Amount: $250,000 ($250.0K)
Contractor: Mckesson Corporation
Awarding Agency: Department of Health and Human Services
Start Date: 2026-03-27
End Date: 2027-08-23
Contract Duration: 514 days
Daily Burn Rate: $486/day
Competition Type: COMPETED UNDER SAP
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: PHARMACEUTICAL SUPPLIES, OPEN MARKET PURCHASES FOR NSSC CUSTOMERS.
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73114
State: Oklahoma Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $250,000 to MCKESSON CORPORATION for work described as: PHARMACEUTICAL SUPPLIES, OPEN MARKET PURCHASES FOR NSSC CUSTOMERS. Key points: 1. McKesson Corporation, a major player, holds a significant market share in pharmaceutical distribution. 2. The contract was competed under SAP, suggesting a structured procurement process. 3. Potential risks include price fluctuations in the pharmaceutical market and supply chain disruptions. 4. Spending in the healthcare sector, particularly for essential medicines, is consistently high.
Value Assessment
Rating: good
The award amount of $250,000 is relatively small for pharmaceutical supplies. Benchmarking against similar contracts for bulk drug purchases would be necessary for a more precise assessment, but this appears to be a routine operational purchase.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was competed under SAP (Standard Acquisition Procedures), indicating a competitive bidding process. This method generally leads to better price discovery and value for the government.
Taxpayer Impact: The competitive nature of this award is expected to yield fair pricing, minimizing unnecessary taxpayer expenditure for essential pharmaceutical supplies.
Public Impact
Ensures availability of essential pharmaceuticals for IHS customers. Supports healthcare services provided by the Indian Health Service. Contributes to the stability of the pharmaceutical supply chain for a specific customer base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price increases in pharmaceutical market.
- Dependence on a single supplier for specific needs.
- Supply chain vulnerabilities impacting delivery.
Positive Signals
- Competitive bidding process utilized.
- Contract duration provides supply stability.
- Established vendor with proven track record.
Sector Analysis
The pharmaceutical and drug wholesalers sector is characterized by large, established players and complex supply chains. Spending benchmarks for this category are typically high due to the essential nature of the products and ongoing demand.
Small Business Impact
While McKesson Corporation is a large business, the procurement method (SAP) allows for participation by various vendors. However, the specific nature of this contract may favor established distributors with existing supply agreements.
Oversight & Accountability
The contract falls under the Department of Health and Human Services, Indian Health Service. Standard procurement oversight applies, focusing on adherence to acquisition regulations and performance monitoring.
Related Government Programs
- Drugs and Druggists' Sundries Merchant Wholesalers
- Department of Health and Human Services Contracting
- Indian Health Service Programs
Risk Flags
- Market price volatility for pharmaceuticals.
- Potential supply chain disruptions.
- Dependence on a large, established supplier.
- Contract duration may not align with long-term strategic needs.
Tags
drugs-and-druggists-sundries-merchant-wh, department-of-health-and-human-services, ok, bpa-call, 100k-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $250,000 to MCKESSON CORPORATION. PHARMACEUTICAL SUPPLIES, OPEN MARKET PURCHASES FOR NSSC CUSTOMERS.
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 $250,000.
What is the period of performance?
Start: 2026-03-27. End: 2027-08-23.
What is the unit cost of key pharmaceuticals under this contract compared to market averages?
A detailed analysis of the unit costs for specific drugs procured under this contract against current market averages would be necessary. Given McKesson's scale, they may offer competitive pricing, but variations can occur based on volume, specific drug, and contract terms. Without itemized pricing, a definitive comparison is not possible.
What are the primary risks associated with relying on McKesson Corporation for these pharmaceutical supplies?
Key risks include potential supply chain disruptions due to McKesson's extensive network, price volatility in the pharmaceutical market that could impact the firm fixed price over time, and the general risk of over-reliance on a single large supplier. Ensuring robust contingency plans and monitoring market trends are crucial.
How effectively does this contract support the IHS's mission of providing healthcare to Native Americans?
This contract directly supports the IHS mission by ensuring the availability of necessary pharmaceutical supplies. By securing these items through a competed contract, the IHS can maintain the continuity of care for its patients, contributing to effective healthcare delivery and improved health outcomes.
Industry Classification
NAICS: Wholesale Trade › Drugs and Druggists' Sundries Merchant Wholesalers › Drugs and Druggists' Sundries Merchant Wholesalers
Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP
Competition & Pricing
Extent Competed: COMPETED UNDER SAP
Solicitation Procedures: SIMPLIFIED ACQUISITION
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 6535 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: $250,000
Exercised Options: $250,000
Current Obligation: $250,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: 75H71122A00161
IDV Type: BPA
Timeline
Start Date: 2026-03-27
Current End Date: 2027-08-23
Potential End Date: 2027-08-23 00:00:00
Last Modified: 2026-04-07
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