HHS awarded Pfizer $1.22B for pediatric vaccines, a significant investment in public health preparedness

Contract Overview

Contract Amount: $1,216,905,023 ($1.2B)

Contractor: Pfizer Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2010-04-01

End Date: 2011-03-31

Contract Duration: 364 days

Daily Burn Rate: $3.3M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: TAS::75 0512::TAS 00HCVGBC-2010-82344 - WYETH 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 $1.22 billion to PFIZER INC. for work described as: TAS::75 0512::TAS 00HCVGBC-2010-82344 - WYETH PEDIATRIC VACCINE CONTRACT Key points: 1. The contract value represents a substantial commitment to ensuring vaccine availability for children. 2. Pfizer, a major pharmaceutical player, secured this contract through full and open competition. 3. The firm-fixed-price structure suggests a defined cost for the government, aiding budget predictability. 4. This award aligns with the CDC's mission to prevent and control disease. 5. The duration of the contract indicates a medium-term supply agreement. 6. The relatively low number of bids (6) warrants attention regarding the breadth of competition.

Value Assessment

Rating: good

The contract value of over $1.2 billion for pediatric vaccines is substantial. Benchmarking this against similar large-scale vaccine procurements is challenging without more specific product details. However, the firm-fixed-price nature suggests the government aimed to lock in costs. The award to a single, established provider like Pfizer indicates a focus on reliability and existing manufacturing capacity for critical public health needs. Further analysis would require comparing the per-unit price of the vaccines to market rates or other government contracts for comparable products.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. Six bids were received, which suggests a reasonable level of interest from the market. While not an exceptionally high number of bidders for a contract of this magnitude, it indicates that the opportunity was broadly advertised and that multiple companies had the capability and interest to compete. The competitive process likely contributed to price discovery and ensured the government received offers from qualified vendors.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it encourages multiple companies to bid, potentially driving down prices and ensuring the government obtains the best value. It also promotes a more equitable playing field for potential suppliers.

Public Impact

Children across the United States benefit from access to essential pediatric vaccines. The contract ensures the supply of critical pharmaceutical products for public health. The geographic impact is national, covering all regions requiring these vaccines. This contract supports jobs within the pharmaceutical manufacturing and distribution sectors. It contributes to the nation's preparedness against vaccine-preventable diseases.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (6) could indicate potential barriers to entry or market concentration.
Reliance on a single contractor for a critical supply chain poses a risk if production is disrupted.

Positive Signals

Award to a major, established pharmaceutical company like Pfizer suggests reliability and proven manufacturing capabilities.
Firm-fixed-price contract provides cost certainty for the government.
Full and open competition process generally leads to better value for taxpayers.

Sector Analysis

The pharmaceutical preparation manufacturing sector is characterized by high R&D costs, stringent regulatory requirements, and significant economies of scale. Large government contracts, like this one for pediatric vaccines, are crucial for ensuring public health and national security. The market is dominated by a few major global players, including Pfizer, due to the complexity and capital intensity of drug development and manufacturing. This contract fits within the broader landscape of federal health spending aimed at disease prevention and treatment.

Small Business Impact

There is no explicit indication of small business set-asides for this contract, and the prime contractor, Pfizer Inc., is a large corporation. However, large federal contracts often have subcontracting requirements. It is possible that smaller businesses within the pharmaceutical supply chain or related services could be involved as subcontractors. Further investigation into subcontracting plans would be needed to assess the direct impact on the small business ecosystem.

Oversight & Accountability

The contract is managed by the Centers for Disease Control and Prevention (CDC), an agency within HHS. Oversight would typically involve contract officers, program managers, and potentially quality assurance specialists to ensure compliance with terms, delivery schedules, and product specifications. Transparency is generally maintained through contract databases like FPDS-NG. Inspector General oversight from HHS would apply to ensure the integrity of the procurement process and prevent fraud, waste, and abuse.

Related Government Programs

HHS Pediatric Vaccine Procurement
CDC Disease Prevention Programs
National Vaccine Stockpile
Pharmaceutical Supply Chain Management

Risk Flags

Supply Chain Concentration Risk
Potential for Market Dominance
Dependence on Single Manufacturer

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $1.22 billion to PFIZER INC.. TAS::75 0512::TAS 00HCVGBC-2010-82344 - WYETH 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 $1.22 billion.

What is the period of performance?

Start: 2010-04-01. End: 2011-03-31.

What is the specific type of pediatric vaccine being procured under this contract?

The provided data does not specify the exact type of pediatric vaccine. The contract, identified by TAS 00HCVGBC-2010-82344, is broadly categorized under 'WYETH PEDIATRIC VACCINE CONTRACT'. Wyeth was a pharmaceutical company acquired by Pfizer in 2009. This suggests the contract may have originated with Wyeth and was subsequently managed or fulfilled by Pfizer post-acquisition. Without further details, it's impossible to determine if it covers routine childhood immunizations, specific seasonal vaccines, or vaccines for particular diseases. Understanding the specific vaccine is crucial for assessing its public health impact and comparing its value.

How does the $1.22 billion contract value compare to historical federal spending on pediatric vaccines?

Comparing the $1.22 billion contract value to historical federal spending requires a broader dataset of vaccine procurements over time. This single contract represents a significant investment, likely reflecting the scale of demand for pediatric vaccines and potentially the cost of specific formulations or manufacturing processes. Federal spending on vaccines fluctuates based on public health needs, the introduction of new vaccines, and the expiration of existing patents. To provide a comparative analysis, one would need to aggregate spending data for similar pediatric vaccine contracts over several fiscal years and analyze trends in volume and price per dose.

What are the key performance indicators (KPIs) and quality standards associated with this vaccine contract?

While the data indicates a firm-fixed-price contract, specific Key Performance Indicators (KPIs) and quality standards are not detailed. Typically, vaccine contracts with the CDC would include stringent requirements related to vaccine efficacy, safety, purity, potency, and proper storage and handling (cold chain integrity). Performance would be measured against delivery schedules, adherence to Good Manufacturing Practices (GMP), and successful completion of quality control testing. The government would likely have mechanisms for inspecting manufacturing facilities and auditing quality control processes to ensure compliance with FDA regulations and contract specifications.

What is Pfizer's track record with large federal vaccine contracts prior to and following this award?

Pfizer has a long and extensive track record of supplying vaccines to the U.S. government, both before and after this 2010-2011 contract. As a major global pharmaceutical company, Pfizer is a key partner in federal public health initiatives, including routine childhood immunization programs and pandemic preparedness efforts. They have historically secured numerous large-scale contracts for various vaccines, including influenza, pneumococcal, and more recently, COVID-19 vaccines. Their experience with complex manufacturing, regulatory compliance, and large-volume distribution is well-established, making them a frequent recipient of such federal awards.

What are the potential risks associated with a single large contract for a critical public health supply like pediatric vaccines?

A significant risk associated with a single large contract for a critical public health supply like pediatric vaccines is supply chain vulnerability. If the sole contractor, Pfizer in this case, faces production issues (e.g., manufacturing defects, raw material shortages, natural disasters affecting facilities), it could lead to widespread vaccine shortages, impacting national immunization efforts and potentially leading to outbreaks of preventable diseases. Additionally, over-reliance on one supplier can reduce negotiating leverage for future contracts and may stifle innovation from potential competitors. Robust contingency planning, including maintaining strategic stockpiles and fostering competition for future awards, is crucial to mitigate these risks.

How does the competition level (6 bidders) for this contract inform the potential for price discovery and value for money?

Receiving six bids for this pediatric vaccine contract suggests a moderate level of competition. While more bidders could potentially drive prices lower, six offers indicate that the market was sufficiently aware of and interested in the opportunity. This level of competition likely allowed the CDC to compare different pricing structures and technical proposals, facilitating price discovery and enabling the selection of a vendor offering good value. However, the pharmaceutical sector can have high barriers to entry, so the number of bidders might be constrained by the specialized nature of vaccine manufacturing. A deeper analysis would involve understanding the specific capabilities of each bidder and the nature of the product being procured.

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: 6

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: $21,494,073,685

Exercised Options: $16,814,823,685

Current Obligation: $1,216,905,023

Timeline