HHS Purchased $130M in Antivirals for Strategic National Stockpile from GlaxoSmithKline
Contract Overview
Contract Amount: $130,319,999 ($130.3M)
Contractor: Glaxosmithkline Holdings (americas) Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2009-09-30
End Date: 2011-09-29
Contract Duration: 729 days
Daily Burn Rate: $178.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: ANTIVIRAL PURCHASE FOR THE STRATEGIC NATIONAL STOCKPILE (RELENZA)
Place of Performance
Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19102
Plain-Language Summary
Department of Health and Human Services obligated $130.3 million to GLAXOSMITHKLINE HOLDINGS (AMERICAS) INC. for work described as: ANTIVIRAL PURCHASE FOR THE STRATEGIC NATIONAL STOCKPILE (RELENZA) Key points: 1. The contract awarded to GlaxoSmithKline for Relenza antivirals represents a significant investment in national health security. 2. Competition was limited, raising questions about potential price discovery and value for money. 3. The firm fixed-price contract structure aims to control costs, but the lack of competition is a risk. 4. This procurement falls within the Pharmaceutical Preparation Manufacturing sector, crucial for public health preparedness.
Value Assessment
Rating: fair
The contract's value of $130.3 million for Relenza is substantial. Without competitive bidding, it's difficult to benchmark against similar large-scale antiviral procurements to definitively assess value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was not competed, indicating a limited competition approach. This likely impacts price discovery, as the government did not leverage multiple offers to negotiate the best possible price.
Taxpayer Impact: The lack of competition may have resulted in a higher cost to taxpayers than if multiple vendors had been considered.
Public Impact
Ensures availability of critical antiviral medication during public health emergencies. Supports national preparedness against influenza outbreaks. Investment in maintaining the Strategic National Stockpile. Potential for increased drug costs due to non-competitive award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpayment due to sole-source nature
Positive Signals
- Ensures critical supply
- Firm fixed-price contract
Sector Analysis
This procurement is within the pharmaceutical manufacturing sector, which is vital for national health security. Spending benchmarks for large-scale antiviral purchases can vary significantly based on market conditions and specific drug efficacy.
Small Business Impact
There is no indication in the provided data that small businesses were involved in this specific procurement. The contract was awarded to a large pharmaceutical corporation.
Oversight & Accountability
The contract was awarded by the Office of the Assistant Secretary for Preparedness and Response (ASPR), a key agency for managing national health emergencies. Oversight would focus on delivery, quality, and stockpile management.
Related Government Programs
- Pharmaceutical Preparation Manufacturing
- Department of Health and Human Services Contracting
- Office of Assistant Secretary for Preparedness and Response Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency on award justification
- Dependence on a single supplier for this specific stock
Tags
pharmaceutical-preparation-manufacturing, department-of-health-and-human-services, pa, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $130.3 million to GLAXOSMITHKLINE HOLDINGS (AMERICAS) INC.. ANTIVIRAL PURCHASE FOR THE STRATEGIC NATIONAL STOCKPILE (RELENZA)
Who is the contractor on this award?
The obligated recipient is GLAXOSMITHKLINE HOLDINGS (AMERICAS) INC..
Which agency awarded this contract?
Awarding agency: Department of Health and Human Services (Office of Assistant Secretary for Preparedness and Response).
What is the total obligated amount?
The obligated amount is $130.3 million.
What is the period of performance?
Start: 2009-09-30. End: 2011-09-29.
What was the rationale for not competing this contract, and were there any sole-source justifications provided?
The provided data states the contract was 'NOT COMPETED'. Without further documentation, the specific rationale is unknown. Typically, non-competitive awards require justification, such as urgency, lack of available sources, or specific proprietary requirements. This lack of transparency hinders a full assessment of value and fairness.
How does the per-unit cost of Relenza in this contract compare to historical or market benchmarks, considering the lack of competition?
Benchmarking the per-unit cost is challenging without competitive data. The firm fixed-price nature suggests an agreed-upon price, but the absence of competition means it's difficult to determine if this price represents fair market value or if taxpayers paid a premium. Further analysis would require access to pricing data from similar procurements or market research.
What is the long-term strategy for managing the Strategic National Stockpile's antiviral inventory, and does this contract align with it?
This contract represents a specific acquisition for the SNS. The long-term strategy would involve ongoing inventory management, expiration date tracking, and periodic replenishment or replacement of medications. The effectiveness of this particular purchase depends on its contribution to the overall readiness and responsiveness of the SNS to a public health crisis.
Industry Classification
NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation Manufacturing
Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Glaxosmithkline PLC
Address: ONE FRANKLIN PLAZA, PHILADELPHIA, PA, 19102
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $195,479,999
Exercised Options: $130,319,999
Current Obligation: $130,319,999
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Timeline
Start Date: 2009-09-30
Current End Date: 2011-09-29
Potential End Date: 2011-09-29 00:00:00
Last Modified: 2025-01-09
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