CDC spent $143M on pediatric flu vaccines from Sanofi, awarded via full and open competition

Contract Overview

Contract Amount: $143,228,059 ($143.2M)

Contractor: Sanofi Vaccines US Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2015-02-06

End Date: 2016-02-28

Contract Duration: 387 days

Daily Burn Rate: $370.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 2015-2016 PEDIATRIC FLU VACCINES

Place of Performance

Location: SWIFTWATER, MONROE County, PENNSYLVANIA, 18370

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $143.2 million to SANOFI VACCINES US INC. for work described as: 2015-2016 PEDIATRIC FLU VACCINES Key points: 1. Value for money appears reasonable given the scale of the procurement for essential public health supplies. 2. Full and open competition suggests a robust market for pediatric flu vaccines. 3. The contract was awarded as a definitive contract, indicating a commitment to a specific supplier for a defined period. 4. The firm-fixed-price structure provides cost certainty for the government. 5. The contract duration of approximately 13 months aligns with typical flu season procurement cycles. 6. The award to a single contractor, Sanofi Vaccines US Inc., warrants a review of market concentration for this product.

Value Assessment

Rating: good

The total award amount of $143.2 million for pediatric flu vaccines over a 13-month period represents a significant investment in public health. Benchmarking this against other large-scale vaccine procurements would be necessary for a precise value-for-money assessment. However, the firm-fixed-price contract type suggests that the government secured pricing upfront, mitigating the risk of cost overruns. The scale of the procurement implies that the price per dose is likely competitive within the market for such a critical public health commodity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors were solicited and had the opportunity to bid. The presence of five bidders (no=5) suggests a healthy level of competition for this significant procurement. This competitive environment is generally expected to drive down prices and encourage innovation, leading to better value for the government and taxpayers.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are used efficiently by leveraging market forces to obtain the best possible pricing and quality for essential pediatric flu vaccines.

Public Impact

Beneficiaries include children across the United States requiring protection against influenza. The service delivered is the provision of critical pediatric flu vaccines to support public health initiatives. The geographic impact is national, ensuring vaccine availability throughout the country. Workforce implications include support for the pharmaceutical manufacturing sector and public health vaccination programs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential over-reliance on a single supplier (Sanofi) for a critical public health product.
The definitive contract nature, while providing certainty, could limit flexibility if market conditions or needs change rapidly.

Positive Signals

Awarded through full and open competition, indicating a competitive marketplace.
Firm-fixed-price contract provides cost certainty and budget predictability.
Procurement addresses a critical public health need for pediatric vaccination.

Sector Analysis

The procurement falls within the pharmaceutical preparation manufacturing sector, specifically focusing on vaccines. This is a critical area of the healthcare industry, driven by public health needs and regulatory oversight. The market for vaccines is often characterized by large, established players due to the high R&D costs, stringent regulatory pathways, and economies of scale required for production. Comparable spending benchmarks would involve looking at other large-scale government vaccine procurements, such as those for seasonal flu or other public health emergencies.

Small Business Impact

The data does not indicate any specific small business set-aside provisions for this contract (sb=false). Given the nature of vaccine manufacturing, it is likely that large pharmaceutical companies are the primary participants. There is no information provided on subcontracting plans, but typically, large prime contractors may engage small businesses for ancillary services or components, though this is not guaranteed.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services (HHS). The contract's performance would be monitored against the terms and conditions, including delivery schedules and quality standards. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Pediatric Vaccine Procurement
Influenza Prevention Programs
Public Health Emergency Preparedness
Pharmaceutical Manufacturing Contracts

Risk Flags

Potential single-source dependency for critical vaccine supply.
Market concentration in vaccine manufacturing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $143.2 million to SANOFI VACCINES US INC.. 2015-2016 PEDIATRIC FLU VACCINES

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 $143.2 million.

What is the period of performance?

Start: 2015-02-06. End: 2016-02-28.

What is Sanofi Vaccines US Inc.'s track record with the federal government, particularly in vaccine procurement?

Sanofi Vaccines US Inc. is a major global pharmaceutical company with a significant history of supplying vaccines to government agencies, including the U.S. Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC). Their track record typically involves large-scale contracts for seasonal influenza vaccines, as well as other critical vaccines. Historical data from federal procurement databases would likely show numerous awards to Sanofi for various vaccine products over many years. While this specific contract was for pediatric flu vaccines, Sanofi is a known entity in this space, suggesting a level of established capability and reliability that likely influenced their selection as a potential awardee under full and open competition.

How does the $143.2 million contract value compare to historical federal spending on pediatric flu vaccines?

The $143.2 million expenditure represents a substantial investment in pediatric flu vaccines for the 2015-2016 period. To assess historical context, one would need to analyze federal spending data for pediatric flu vaccines in preceding years. Factors influencing year-to-year spending include the total number of doses procured, the negotiated price per dose, and the specific strains of influenza targeted for vaccination. If this contract represents a significant increase or decrease compared to prior years, it could indicate shifts in public health strategy, vaccine efficacy, or market pricing. Without comparative data for other years, it's difficult to definitively state if this amount is high or low, but it underscores the government's commitment to ensuring vaccine availability for children.

What are the primary risks associated with a definitive contract for vaccine supply?

A definitive contract, like the one awarded to Sanofi, establishes a clear commitment between the government and the contractor for a specified period and scope. For vaccine supply, a primary risk is potential inflexibility. If public health needs change rapidly, or if a more effective or cost-efficient vaccine becomes available from another source mid-contract, the government may be locked into the existing agreement, potentially missing out on better alternatives. Another risk relates to supplier dependency; if Sanofi faces production issues, supply chain disruptions, or quality control problems, it could directly impact the availability of critical pediatric flu vaccines. However, definitive contracts also offer benefits like price stability and guaranteed supply, which are crucial for public health planning.

How effective are federal procurement processes in ensuring the quality and efficacy of pediatric flu vaccines?

Federal procurement processes for vaccines are designed with quality and efficacy as paramount concerns, given the public health implications. Agencies like the CDC and FDA have stringent requirements that manufacturers must meet, including adherence to Good Manufacturing Practices (GMP) and successful completion of clinical trials. Before any vaccine is procured, it must be licensed and approved by the FDA. During the procurement process, solicitations often include detailed specifications regarding vaccine composition, purity, potency, and packaging. Post-award, contracts typically include quality assurance clauses, and the government may conduct inspections or require batch testing. The competitive bidding process itself can also incentivize contractors to maintain high quality standards to secure and retain contracts.

What is the market concentration for pediatric flu vaccines, and how does this contract reflect it?

The market for pediatric flu vaccines is generally concentrated among a few large pharmaceutical manufacturers due to the high barriers to entry, including research and development costs, regulatory hurdles, and the need for large-scale manufacturing capabilities. Sanofi is one of the major global players in this market. The award of a $143 million contract to a single entity, Sanofi, for a specific period suggests that, at the time of procurement, they were a primary or sole provider meeting the government's specific requirements for pediatric formulations. While the contract was competed, the outcome indicates that Sanofi was the successful bidder, potentially reflecting the existing market structure where a limited number of companies dominate supply. This concentration warrants ongoing monitoring to ensure continued competition and prevent supply vulnerabilities.

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: $330,149,915

Exercised Options: $330,149,915

Current Obligation: $143,228,059

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline