Pfizer's $668M pediatric vaccine contract awarded by HHS CDC for pharmaceutical preparation manufacturing

Contract Overview

Contract Amount: $668,231,891 ($668.2M)

Contractor: Pfizer Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2009-04-01

End Date: 2010-03-31

Contract Duration: 364 days

Daily Burn Rate: $1.8M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 00HCVGBC-2009-68755 - WYETH VFC PEDIATRIC VACCINE CONTRACT

Place of Performance

Location: MALVERN, CHESTER County, PENNSYLVANIA, 19355, UNITED STATES OF AMERICA

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $668.2 million to PFIZER INC. for work described as: 00HCVGBC-2009-68755 - WYETH VFC PEDIATRIC VACCINE CONTRACT Key points: 1. Contract value represents a significant investment in public health infrastructure. 2. Full and open competition suggests a potentially competitive bidding process. 3. Firm Fixed Price contract type offers cost certainty for the government. 4. The contract duration of 364 days indicates a short-term supply need. 5. Awarded by the Centers for Disease Control and Prevention, highlighting a focus on disease prevention. 6. The North American Industry Classification System code 325412 points to pharmaceutical preparation manufacturing.

Value Assessment

Rating: good

The contract value of approximately $668 million for a one-year period for pediatric vaccines appears to be within a reasonable range for large-scale public health procurements. Benchmarking against similar large vaccine contracts would provide more precise value-for-money assessment. The firm fixed-price structure helps manage cost fluctuations. However, without specific per-unit pricing or comparison to commercial market prices for the same vaccines, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This suggests a robust bidding environment, which typically leads to better price discovery and potentially more favorable terms for the government. The presence of 5 bidders (no) further supports the notion of a competitive landscape, reducing the risk of inflated pricing due to limited options.

Taxpayer Impact: A competitive award process like this generally benefits taxpayers by driving down costs through market forces, ensuring the government secures vaccines at a price reflective of market conditions rather than a sole-source premium.

Public Impact

Children across the nation benefit from access to essential pediatric vaccines, contributing to herd immunity and disease prevention. The contract ensures the supply of critical pharmaceutical preparations, specifically vaccines, for public health programs. Geographic impact is national, as vaccines procured are intended for distribution and administration throughout the United States. The contract supports the pharmaceutical manufacturing sector and associated supply chains, potentially impacting jobs in manufacturing and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in subsequent contract periods if competition diminishes.
Dependence on a single contractor for a critical public health supply chain.

Positive Signals

Awarded through full and open competition, indicating a healthy market.
Firm Fixed Price contract provides budget certainty.
CDC's involvement suggests alignment with national public health priorities.

Sector Analysis

This contract falls within the pharmaceutical preparation manufacturing sector, a critical component of the healthcare industry. The market for vaccines is substantial, driven by public health initiatives, disease prevention programs, and regulatory requirements. This procurement by the CDC represents a significant portion of federal spending on vaccines, aiming to ensure adequate supply for national immunization programs. Comparable spending benchmarks would involve analyzing other large-scale vaccine procurements by government agencies.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions or subcontracting goals for this contract. As a large-value pharmaceutical procurement, it is likely that prime contractors are large corporations. Further analysis would be needed to determine if small businesses are involved in the supply chain or as subcontractors, and what impact this contract has on the broader small business ecosystem within the pharmaceutical sector.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. The Centers for Disease Control and Prevention (CDC) would oversee contract performance and compliance. As a firm fixed-price contract, financial oversight focuses on adherence to the agreed-upon price. Transparency is generally maintained through contract databases like FPDS-NG. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

HHS Vaccine Injury Compensation Program
CDC National Immunization Program
Department of Defense Pharmaceutical Contracts
Veterans Affairs Pharmaceutical Contracts

Risk Flags

Potential for price increases in future contract renewals.
Dependence on a single supplier for critical vaccines.
Ensuring consistent vaccine quality and efficacy throughout the contract period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $668.2 million to PFIZER INC.. 00HCVGBC-2009-68755 - WYETH VFC PEDIATRIC VACCINE CONTRACT

Who is the contractor on this award?

The obligated recipient is PFIZER INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $668.2 million.

What is the period of performance?

Start: 2009-04-01. End: 2010-03-31.

What is the historical spending pattern for pediatric vaccines by the CDC over the last five years?

Analyzing historical spending by the CDC on pediatric vaccines over the past five years would reveal trends in procurement volume, average contract values, and the primary contractors. This contract, valued at approximately $668 million for a one-year period in 2009-2010, represents a significant single award. Understanding if this value is consistent with, higher than, or lower than previous years' spending on similar vaccine types would provide context. It would also highlight any shifts in contracting strategies, such as changes in competition levels or contract types. For instance, if previous years saw smaller, more frequent awards or different pricing structures, this contract's scale and terms would stand out. Such historical data is crucial for assessing whether current spending aligns with long-term public health needs and budget allocations, and for identifying potential cost efficiencies or inflationary pressures in the vaccine market.

How does the per-unit cost of vaccines under this contract compare to commercial market prices or other government contracts?

A direct comparison of the per-unit cost of vaccines under this $668 million contract to commercial market prices or other government contracts is essential for a thorough value assessment. While the contract is firm fixed-price, the specific unit price for each vaccine type procured is not detailed in the summary data. If this information were available, it could be benchmarked against publicly available commercial pricing or against prices paid by other federal agencies (e.g., Department of Defense, VA) or state health departments for the same or comparable vaccines. Significant deviations could indicate either exceptional value secured through competition or potential overpayment. Factors such as volume discounts, specific vaccine formulations, and delivery timelines can influence per-unit costs, necessitating careful apples-to-apples comparisons. Without this granular data, assessing the true cost-effectiveness of this procurement remains incomplete.

What specific pediatric vaccines were procured under this contract and what is their public health significance?

This contract, valued at approximately $668 million, was for the procurement of pediatric vaccines by the CDC. While the specific vaccine types are not itemized in the provided data, common pediatric vaccines procured by the CDC include those protecting against diseases such as diphtheria, tetanus, pertussis (DTaP), polio, measles, mumps, rubella (MMR), varicella (chickenpox), hepatitis B, and influenza. These vaccines are critical components of national immunization schedules, designed to prevent widespread outbreaks of serious and potentially life-threatening infectious diseases in children. Ensuring a robust supply of these vaccines is paramount for maintaining high vaccination rates, achieving herd immunity, and protecting vulnerable populations, thereby significantly reducing the burden of preventable diseases on individuals and the healthcare system.

What was the track record of Pfizer Inc. as a contractor with the federal government prior to this award?

Prior to the award of this $668 million pediatric vaccine contract in 2009, Pfizer Inc. had a substantial history as a federal contractor. As a major global pharmaceutical company, Pfizer has consistently engaged in numerous contracts across various federal agencies, including the Department of Health and Human Services (HHS), Department of Defense (DoD), and others, for a wide range of pharmaceutical products, including vaccines and therapeutics. Its track record would typically involve a history of delivering products, managing large-scale supply chains, and adhering to stringent regulatory and quality standards required by agencies like the FDA and CDC. Assessing Pfizer's past performance, including any history of contract disputes, quality issues, or exceptional delivery, would provide important context for evaluating the risk and reliability associated with this specific pediatric vaccine award.

How did the number of bidders (5) influence the final contract price and terms compared to a sole-source or limited competition scenario?

The fact that this contract was awarded under full and open competition with five bidders (5) is a strong indicator that the final price and terms were likely favorable to the government. A higher number of bidders generally intensifies competition, pressuring companies to offer their best pricing and most advantageous terms to win the contract. In contrast, a sole-source or limited competition scenario, where fewer or only one bidder is involved, often results in higher prices due to the lack of competitive pressure. The presence of five bidders suggests that the market for these pediatric vaccines was sufficiently robust and accessible, allowing multiple qualified companies to compete. This competitive environment helps ensure that the government is not overpaying and is receiving good value for taxpayer dollars, as the chosen contractor had to be significantly competitive to secure the award.

What are the potential risks associated with a firm fixed-price contract for vaccine procurement?

While a firm fixed-price (FFP) contract, like the one awarded to Pfizer for $668 million, offers cost certainty for the government by locking in the price, it carries certain risks. The primary risk is that the contractor may face unforeseen cost increases in production (e.g., raw materials, labor) that erode their profit margin, potentially leading to quality compromises or pressure to cut corners if not managed closely. Conversely, if the contractor's costs decrease significantly, the government might be paying a premium if the initial price was set too high. For vaccines, which can have complex manufacturing processes and storage requirements, ensuring consistent quality and supply chain integrity under an FFP structure requires diligent government oversight. There's also a risk that if market prices for the vaccines rise substantially during the contract period, the contractor might be less motivated to fulfill the contract efficiently, or future contract renewals could see significant price hikes.

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

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Pfizer Inc (UEI: 001326495)

Address: 33 MOREHALL RD, MALVERN, PA, 19355

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

Financial Breakdown

Contract Ceiling: $15,297,409,927

Exercised Options: $15,297,409,927

Current Obligation: $668,231,891

Timeline