HHS Awards $9M for Pharmaceutical Supplies to McKesson Corporation via Full and Open Competition

Contract Overview

Contract Amount: $9,000,000 ($9.0M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2025-12-23

End Date: 2026-08-09

Contract Duration: 229 days

Daily Burn Rate: $39.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PHARMACEUTICAL SUPPLIES, PHARMACY PRIME VENDOR 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 $9.0 million to MCKESSON CORPORATION for work described as: PHARMACEUTICAL SUPPLIES, PHARMACY PRIME VENDOR PURCHASES FOR NSSC CUSTOMERS. Key points: 1. The contract is for pharmaceutical supplies and pharmacy prime vendor purchases. 2. McKesson Corporation is the incumbent contractor. 3. The contract is awarded under full and open competition. 4. The estimated value is $9 million over a 229-day period.

Value Assessment

Rating: good

The contract value of $9 million for a 229-day period suggests a reasonable scale for prime vendor pharmaceutical services. Benchmarking against similar contracts for large-scale pharmacy prime vendor services would provide a more precise assessment of pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded using full and open competition, which typically fosters competitive pricing and ensures the government receives the best value. The specific price discovery mechanisms within this competitive process are not detailed but are presumed to be robust.

Taxpayer Impact: The use of full and open competition is expected to yield a fair price for taxpayers, maximizing value for the $9 million expenditure on essential pharmaceutical supplies.

Public Impact

Ensures continued access to essential pharmaceutical supplies for Indian Health Service customers. Supports the operational needs of healthcare facilities within the Indian Health Service. Potential for cost savings due to competitive bidding process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Full and open competition utilized.
Clear contract duration and delivery dates.
Incumbent contractor likely has established supply chain efficiencies.

Sector Analysis

This contract falls within the Pharmaceutical Preparation Manufacturing sector, specifically for the distribution and supply of pharmaceuticals. Spending in this sector is critical for public health services, and benchmarks often focus on cost per prescription or overall formulary management.

Small Business Impact

The data indicates this is a large contract awarded to a major corporation, McKesson. There is no specific information provided regarding set-asides for small businesses in this award, suggesting it was not specifically targeted towards them.

Oversight & Accountability

The contract is managed by the Department of Health and Human Services, Indian Health Service. Standard oversight mechanisms for federal contracts, including performance monitoring and payment verification, would apply.

Related Government Programs

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

Risk Flags

Potential for price increases in subsequent contract periods.
Reliance on a single large vendor could pose supply chain risks.
Limited visibility into specific cost breakdowns within the prime vendor model.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $9.0 million to MCKESSON CORPORATION. PHARMACEUTICAL SUPPLIES, PHARMACY PRIME VENDOR 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 $9.0 million.

What is the period of performance?

Start: 2025-12-23. End: 2026-08-09.

What is the historical pricing trend for McKesson Corporation's pharmaceutical prime vendor services to the IHS?

Analyzing historical pricing data for McKesson's services to the Indian Health Service (IHS) would reveal if current pricing reflects competitive trends or potential escalations. Understanding past performance and price adjustments can inform whether this $9 million award represents a fair market value compared to previous agreements and if cost-saving opportunities have been maximized over time.

How does the unit cost of pharmaceuticals under this contract compare to other federal healthcare providers?

Benchmarking the unit costs of pharmaceuticals procured through this prime vendor contract against those acquired by other federal healthcare entities (e.g., VA, DoD) is crucial. This comparison would highlight potential price disparities and identify if the IHS is receiving competitive pricing, thereby ensuring taxpayer funds are used efficiently and effectively for essential medical supplies.

What are the key performance indicators (KPIs) used to measure the effectiveness of this pharmaceutical supply contract?

Defining and tracking specific KPIs, such as on-time delivery rates, order accuracy, stockout frequency, and patient satisfaction related to medication availability, are vital for assessing contract effectiveness. Robust performance monitoring ensures that the $9 million expenditure translates into reliable and high-quality pharmaceutical services for IHS patients.

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: $9,000,000

Exercised Options: $9,000,000

Current Obligation: $9,000,000

Actual Outlays: $9,000,000

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