HHS Spends $101M on Tamiflu for Strategic National Stockpile via Sole-Source Contract
Contract Overview
Contract Amount: $100,975,014 ($101.0M)
Contractor: Roche Laboratories 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: $138.5K/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 (TAMIFLU(C))
Place of Performance
Location: NUTLEY, ESSEX County, NEW JERSEY, 07110
Plain-Language Summary
Department of Health and Human Services obligated $101.0 million to ROCHE LABORATORIES INC. for work described as: ANTIVIRAL PURCHASE FOR THE STRATEGIC NATIONAL STOCKPILE (TAMIFLU(C)) Key points: 1. Significant investment in pandemic preparedness with Tamiflu. 2. Sole-source procurement raises questions about price discovery and competition. 3. Contract duration of 729 days suggests a substantial supply acquisition. 4. Focus on pharmaceutical manufacturing highlights a critical sector for national health security.
Value Assessment
Rating: fair
The contract value of $101M for Tamiflu is substantial. Without comparable contracts or detailed cost breakdowns, assessing its pricing against similar pharmaceutical procurements is difficult. Benchmarking is needed to determine if the price reflects fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This method limits price negotiation and potentially leads to higher costs for taxpayers as competitive pressures are absent.
Taxpayer Impact: The lack of competition in this sole-source award may result in a higher cost to taxpayers than if the contract had been competitively bid.
Public Impact
Ensures availability of a critical antiviral medication for public health emergencies. Supports national biodefense and pandemic preparedness efforts. Potential for price overpayment due to sole-source nature impacts taxpayer funds. Highlights reliance on specific pharmaceutical manufacturers for essential medicines.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source procurement
- Lack of competition
- Potential for overpricing
Positive Signals
- Ensures critical supply
- Supports national security
Sector Analysis
This procurement falls within the Pharmaceutical Preparation Manufacturing sector, crucial for national health security. Spending benchmarks in this area are highly variable due to R&D costs, regulatory hurdles, and market exclusivity.
Small Business Impact
The contract was awarded to Roche Laboratories Inc., a large pharmaceutical company. There is no indication of small business participation in this specific sole-source award.
Oversight & Accountability
Oversight of sole-source contracts is critical to ensure fair pricing and prevent waste. The Department of Health and Human Services' acquisition process for this essential medicine warrants scrutiny regarding justification for non-competition.
Related Government Programs
- Pharmaceutical Preparation Manufacturing
- Department of Health and Human Services Contracting
- Office of Assistant Secretary for Preparedness and Response Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing.
- Lack of transparency in price justification.
- Reliance on a single supplier for a critical medication.
Tags
pharmaceutical-preparation-manufacturing, department-of-health-and-human-services, nj, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $101.0 million to ROCHE LABORATORIES INC.. ANTIVIRAL PURCHASE FOR THE STRATEGIC NATIONAL STOCKPILE (TAMIFLU(C))
Who is the contractor on this award?
The obligated recipient is ROCHE LABORATORIES 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 $101.0 million.
What is the period of performance?
Start: 2009-09-30. End: 2011-09-29.
What was the justification for awarding this contract on a sole-source basis, and were alternative sourcing strategies considered?
Sole-source awards typically require strong justification, such as unique capabilities, urgent need, or lack of viable alternatives. Without this information, it's difficult to assess if the government adequately explored competitive options or received the best possible value. Further documentation is needed to understand the rationale behind bypassing the competitive bidding process.
How does the per-unit cost of this Tamiflu purchase compare to historical government purchases or commercial market prices for the same drug?
Benchmarking the per-unit cost is essential for evaluating value for money. If this contract's pricing significantly exceeds historical averages or market rates, it suggests potential overpayment. A detailed cost analysis comparing this award to other government contracts or publicly available pricing data is necessary to determine if taxpayers received a fair price.
What measures are in place to ensure the effectiveness and timely delivery of Tamiflu from Roche Laboratories Inc. under this contract?
Ensuring the effectiveness and timely delivery of critical pharmaceuticals involves robust contract management, including performance metrics, quality assurance protocols, and delivery schedules. The government should have mechanisms to monitor Roche's compliance, verify product quality, and address any potential disruptions to guarantee the Strategic National Stockpile is adequately provisioned.
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: Genmark Diagnostics Inc.
Address: 340 KINGSLAND ST, NUTLEY, NJ, 07110
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $199,048,014
Exercised Options: $100,975,014
Current Obligation: $100,975,014
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
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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