HHS awarded $1.03B for vaccines, with Pfizer Inc. securing the majority share

Contract Overview

Contract Amount: $1,028,966,218 ($1.0B)

Contractor: Pfizer Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2017-04-01

End Date: 2018-03-31

Contract Duration: 364 days

Daily Burn Rate: $2.8M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::OT::IGF 2017 VACCINES FOR CHILDREN

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10017

State: New York Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $1.03 billion to PFIZER INC for work described as: IGF::OT::IGF 2017 VACCINES FOR CHILDREN Key points: 1. Value for money appears reasonable given the scale and nature of vaccine procurement. 2. The contract was awarded under full and open competition, suggesting a competitive market. 3. Risk indicators are moderate, typical for large-scale pharmaceutical procurements. 4. Performance context is critical for public health, requiring reliable vaccine supply. 5. This contract positions the CDC within the broader pharmaceutical sector for essential public health supplies.

Value Assessment

Rating: good

The contract value of over $1 billion for vaccine procurement is substantial. Benchmarking against similar large-scale pharmaceutical contracts for essential medicines suggests this is within a reasonable range, considering the volume and specific nature of the vaccines. The firm fixed-price structure provides cost certainty for the government. However, a detailed unit cost analysis would be needed to fully assess pricing efficiency against market rates for comparable vaccines.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of 7 bidders suggests a healthy level of competition for this significant pharmaceutical supply contract. This broad competition is generally expected to drive more competitive pricing and ensure a wider pool of qualified suppliers is available to the government.

Taxpayer Impact: The full and open competition likely resulted in better pricing for taxpayers by leveraging market forces to secure vaccines at a more favorable cost.

Public Impact

The primary beneficiaries are the recipients of the Vaccines for Children program, ensuring access to essential immunizations. Services delivered include the supply of critical vaccines to prevent infectious diseases. The geographic impact is national, covering all states and territories participating in the VFC program. Workforce implications include supporting the public health infrastructure responsible for vaccine distribution and administration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in future contract renewals.
Dependence on a single primary supplier (Pfizer Inc.) for a significant portion of the award.
Ensuring equitable distribution across all participating VFC program sites.

Positive Signals

Strong competition indicated by 7 bidders.
Firm fixed-price contract provides cost predictability.
Awarded by a key health agency (CDC) for a critical public health need.

Sector Analysis

The pharmaceutical manufacturing sector is characterized by high R&D costs, stringent regulatory requirements, and significant market concentration. This contract falls within the pharmaceutical preparation manufacturing sub-sector. Comparable spending benchmarks for national vaccine procurement programs are typically in the hundreds of millions to billions of dollars, reflecting the scale of public health initiatives. The market is dominated by a few large global players, making competition dynamics crucial.

Small Business Impact

This contract does not appear to have specific small business set-aside provisions mentioned. However, large pharmaceutical contracts often involve complex supply chains where small businesses can participate as subcontractors to prime contractors. The impact on the small business ecosystem would depend on the subcontracting opportunities generated by the prime awardee.

Oversight & Accountability

Oversight is primarily managed by the Centers for Disease Control and Prevention (CDC) through contract performance monitoring and adherence to delivery schedules. Accountability measures are embedded in the contract terms, including quality control and delivery requirements. Transparency is facilitated through federal contract databases. The Inspector General for the Department of Health and Human Services would have jurisdiction over any potential fraud or mismanagement.

Related Government Programs

Vaccines for Children Program
National Vaccine Injury Compensation Program
Strategic National Stockpile
Public Health Emergency Fund

Risk Flags

Potential for supply chain disruption
Dependence on key manufacturers
Ensuring vaccine efficacy through cold chain management

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $1.03 billion to PFIZER INC. IGF::OT::IGF 2017 VACCINES FOR CHILDREN

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 $1.03 billion.

What is the period of performance?

Start: 2017-04-01. End: 2018-03-31.

What is the historical spending trend for vaccines by the CDC over the past five years?

Historical spending data for vaccines by the CDC reveals a consistent and significant investment in public health immunizations. While specific figures fluctuate annually based on public health needs, disease outbreaks, and new vaccine introductions, the overall trend indicates a sustained commitment. For instance, spending in this category has often ranged in the high hundreds of millions to over a billion dollars annually, reflecting the scale of the Vaccines for Children program and other immunization initiatives. Factors influencing these trends include the introduction of new vaccines (e.g., for influenza, COVID-19), changes in recommended vaccination schedules, and the overall demand for preventative healthcare services. Analyzing these patterns helps in forecasting future budgetary needs and identifying potential areas for cost efficiencies or increased investment.

How does the unit cost of vaccines procured under this contract compare to market rates for similar products?

A precise comparison of unit costs for vaccines procured under this contract to general market rates is challenging without access to the specific vaccine types and quantities purchased, as well as detailed pricing information. However, given that this is a large-scale, firm-fixed-price contract awarded through full and open competition, it is reasonable to infer that the unit costs are likely competitive. Government bulk purchasing power, combined with the competitive bidding process, typically allows for favorable pricing compared to smaller, retail-level purchases. To conduct a thorough benchmark, one would need to identify the specific National Drug Codes (NDCs) for the vaccines procured and compare their contracted prices against publicly available wholesale acquisition costs or prices negotiated by other large healthcare systems or government entities for the same or equivalent products. Variations can arise due to different contract terms, volumes, and specific formulations.

What are the primary risks associated with this large-scale vaccine procurement contract?

The primary risks associated with this large-scale vaccine procurement contract include supply chain disruptions, potential for vaccine shortages, and quality control issues. Given the critical nature of vaccines for public health, any interruption in supply can have severe consequences. Dependence on a limited number of manufacturers, even with competitive bidding, can exacerbate these risks. Furthermore, ensuring the integrity of the cold chain during storage and transportation is paramount to maintaining vaccine efficacy. Other risks involve potential adverse events, although these are typically managed through rigorous testing and post-market surveillance, and the possibility of price increases in future contract renewals if competition diminishes. The government also faces the risk of contractor non-performance or default, necessitating robust oversight and contingency planning.

What is the track record of Pfizer Inc. in fulfilling large government pharmaceutical contracts?

Pfizer Inc. has a long and extensive track record of fulfilling large government pharmaceutical contracts, both domestically and internationally. They are a major global pharmaceutical company with significant experience in manufacturing and distributing a wide range of vaccines and medications. Historically, Pfizer has been a key supplier to government health agencies, including the Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC), for various immunization programs. Their involvement in large-scale vaccine procurements, such as those for influenza and more recently for COVID-19, demonstrates their capacity to handle substantial orders and complex logistical challenges. While specific performance metrics for every contract are not publicly detailed, their continued selection for major government procurements suggests a generally reliable performance history in terms of quality, delivery, and compliance.

How does the competition level (7 bidders) impact the overall value for money achieved in this contract?

A competition level involving seven bidders is generally considered robust and is highly likely to have positively impacted the value for money achieved in this contract. A larger number of bidders typically intensifies competition, driving down prices as companies vie for the contract award. It also increases the likelihood that the government will receive proposals that offer innovative solutions or superior value. For taxpayers, this means that the funds allocated for vaccine procurement are likely being used more efficiently, as the government benefits from the competitive pressure to secure goods and services at a more optimal price point. Furthermore, a competitive process can lead to better contract terms and conditions, as bidders seek to differentiate themselves beyond just price. The presence of multiple qualified bidders also provides a degree of assurance regarding the availability of supply and reduces the risk of sole-source dependency.

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

Solicitation ID: 2017N18099

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 235 E 42ND ST, NEW YORK, NY, 10017

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: $1,347,249,175

Exercised Options: $1,347,249,175

Current Obligation: $1,028,966,218

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline