HHS awarded $372.7M for childhood vaccines, with Sanofi Pasteur as the sole awardee

Contract Overview

Contract Amount: $372,701,785 ($372.7M)

Contractor: Sanofi Vaccines US Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2013-04-01

End Date: 2014-03-31

Contract Duration: 364 days

Daily Burn Rate: $1.0M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: VACCINE FOR CHILDREN 2013

Place of Performance

Location: SWIFTWATER, MONROE County, PENNSYLVANIA, 18370

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $372.7 million to SANOFI VACCINES US INC. for work described as: VACCINE FOR CHILDREN 2013 Key points: 1. The contract value represents a significant investment in public health, specifically for childhood immunization programs. 2. Competition dynamics are limited, as Sanofi Pasteur was the sole awardee, raising questions about price discovery. 3. Risk indicators include potential over-reliance on a single supplier and the need for robust performance monitoring. 4. This award falls within the broader context of federal pharmaceutical procurement and vaccine supply chain management. 5. The pharmaceutical preparation manufacturing sector is characterized by high R&D costs and stringent regulatory oversight.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific per-unit cost data for each vaccine type. However, the total award of $372.7 million over one year suggests a substantial procurement. Comparing this to similar large-scale vaccine procurements would be necessary to assess if the pricing is competitive. The fixed-price nature of the contract provides some cost certainty, but the lack of competition could lead to less favorable pricing than if multiple vendors were involved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. However, only one award was made to Sanofi Pasteur. This suggests that while the process was open, Sanofi was either the only responsive bidder, the most advantageous offer, or potentially the only capable supplier for the specific requirements. The limited number of bidders (implied by the sole awardee) can impact price negotiation.

Taxpayer Impact: For taxpayers, a sole awardee in a full and open competition scenario may mean that the government did not achieve the lowest possible price due to a lack of robust bidding. This necessitates careful oversight to ensure the price paid is reasonable.

Public Impact

Children across the United States benefit from access to essential vaccines, contributing to herd immunity and disease prevention. The Centers for Disease Control and Prevention (CDC) receives the procured vaccines for distribution and administration through national immunization programs. The geographic impact is nationwide, ensuring vaccine availability across all states and territories. This contract supports jobs within the pharmaceutical manufacturing sector, particularly at Sanofi Pasteur's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price inflation due to sole awardee status.
Dependence on a single supplier could create supply chain vulnerabilities.
Need for stringent quality control and performance monitoring to ensure vaccine efficacy and safety.

Positive Signals

Awarded through full and open competition, suggesting a fair process.
Contract value indicates a significant commitment to public health.
Fixed-price contract provides cost predictability for the government.

Sector Analysis

The pharmaceutical preparation manufacturing sector is a critical component of the healthcare industry, involving the production of drugs and vaccines. This contract represents a significant federal investment in ensuring the availability of essential childhood vaccines. The market is characterized by high barriers to entry due to research and development costs, regulatory hurdles, and economies of scale. Comparable spending benchmarks would involve looking at other large-scale federal vaccine procurements or contracts for similar pharmaceutical products.

Small Business Impact

There is no indication that this contract included a small business set-aside. As a large-value pharmaceutical procurement, it is unlikely that small businesses would be primary awardees. However, the prime contractor, Sanofi Pasteur, may engage small businesses for subcontracting opportunities related to logistics, distribution, or support services, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services (HHS). Accountability measures would include performance standards, delivery schedules, and quality assurance protocols for the vaccines. Transparency is generally maintained through contract award databases, though specific performance details may be proprietary. The HHS Office of Inspector General (OIG) would have jurisdiction for audits and investigations related to potential fraud, waste, or abuse.

Related Government Programs

National Vaccine Injury Compensation Program
CDC Procurement and Assistance Management Manual
Federal Supply Schedule (FSS) for Pharmaceuticals
Department of Defense Vaccine Procurement

Risk Flags

Sole awardee in a full and open competition
Potential for price escalation due to limited competition
Supply chain risk associated with single-source dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $372.7 million to SANOFI VACCINES US INC.. VACCINE FOR CHILDREN 2013

Who is the contractor on this award?

The obligated recipient is SANOFI VACCINES US 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 $372.7 million.

What is the period of performance?

Start: 2013-04-01. End: 2014-03-31.

What is the historical spending pattern for childhood vaccines by the CDC over the last decade?

Analyzing historical spending patterns for childhood vaccines by the CDC reveals a consistent and significant investment in immunization programs. While specific figures fluctuate annually based on vaccine needs, public health initiatives, and emerging diseases, the overall trend indicates a sustained commitment. For instance, spending often increases during periods of heightened public health concern or the introduction of new vaccine recommendations. The CDC's budget allocation for vaccines is a critical component of its disease prevention mandate. Examining year-over-year data would show trends in the types of vaccines procured and the total expenditure, providing context for the $372.7 million awarded in 2013. This historical perspective is crucial for understanding the scale and importance of such procurements within the federal health budget.

How does the per-unit cost of vaccines procured under this contract compare to market rates or other federal contracts?

Determining the precise per-unit cost comparison for vaccines procured under this $372.7 million contract is challenging without access to the detailed pricing structure and specific vaccine types included. Federal contracts often negotiate bulk discounts, which may differ from standard market rates available to the general public or smaller healthcare providers. Furthermore, the 'market rate' for vaccines can vary significantly based on manufacturer, formulation, and volume. To conduct a thorough comparison, one would need to identify the specific vaccines (e.g., DTaP, MMR, Polio) and their quantities within the contract, then benchmark these against prices from other federal contracts (e.g., through the Federal Supply Schedule) or published pharmaceutical pricing indices. The fact that Sanofi Pasteur was the sole awardee under full and open competition might suggest less leverage for aggressive price negotiation compared to a scenario with multiple competitive bids.

What is Sanofi Pasteur's track record in supplying vaccines to the federal government, particularly the CDC?

Sanofi Pasteur has a long-standing and significant track record as a supplier of vaccines to the federal government, including the Centers for Disease Control and Prevention (CDC). As a major global vaccine manufacturer, the company has been a key partner in numerous public health initiatives. Their history with the CDC likely includes supplying a wide range of routine childhood vaccines, as well as vaccines for influenza and other infectious diseases. Past performance evaluations, contract awards, and any documented issues or successes would provide a comprehensive view of their reliability, quality control, and ability to meet federal demand. Federal procurement databases and past performance reviews are essential resources for assessing this track record in detail.

What are the potential risks associated with awarding a large vaccine contract to a single supplier?

Awarding a large vaccine contract to a single supplier, even under full and open competition, carries several potential risks. Firstly, it can reduce competitive pressure, potentially leading to higher prices than might be achieved through a multi-bidder scenario. Secondly, it creates a dependency on that specific supplier, making the government vulnerable to supply chain disruptions caused by manufacturing issues, natural disasters, geopolitical events, or the supplier's own business decisions. This single point of failure can jeopardize the consistent availability of critical vaccines. Thirdly, a lack of ongoing competition might disincentivize the supplier from innovating or improving efficiency. Robust contract management, including performance monitoring, contingency planning, and potentially exploring alternative suppliers for future procurements, is crucial to mitigate these risks.

How does this contract align with broader federal goals for public health and disease prevention?

This $372.7 million contract for childhood vaccines directly aligns with fundamental federal goals for public health and disease prevention. The Centers for Disease Control and Prevention (CDC), as the procuring agency, is mandated to protect the nation from health, safety, and security threats, both foreign and domestic. Ensuring a robust supply of vaccines for children is a cornerstone of this mission, aiming to prevent outbreaks of preventable diseases, reduce childhood mortality and morbidity, and achieve high vaccination coverage rates. This procurement supports the National Vaccine Plan and other public health strategies focused on maintaining herd immunity and eradicating vaccine-preventable diseases. The investment underscores the government's commitment to proactive health measures over reactive treatment.

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: Sanofi Pasteur Vaxdesign Corp (UEI: 739980787)

Address: 1 DISCOVERY DR, SWIFTWATER, PA, 18370

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

Financial Breakdown

Contract Ceiling: $943,194,500

Exercised Options: $943,194,500

Current Obligation: $372,701,785

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline