Peace Corps Spends $39.3M on Pharmacy Benefit Management with International Medical Group Inc

Contract Overview

Contract Amount: $39,283,475 ($39.3M)

Contractor: International Medical Group Inc

Awarding Agency: Peace Corps

Start Date: 2017-02-21

End Date: 2022-06-30

Contract Duration: 1,955 days

Daily Burn Rate: $20.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: HEALTH CARE SERVICE BENEFITS PROCUREMENT. IGF::OT::IGF

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46208

State: Indiana Government Spending

Plain-Language Summary

Peace Corps obligated $39.3 million to INTERNATIONAL MEDICAL GROUP INC for work described as: HEALTH CARE SERVICE BENEFITS PROCUREMENT. IGF::OT::IGF Key points: 1. The contract awarded to International Medical Group Inc. for Pharmacy Benefit Management services is valued at $39.3 million. 2. This procurement utilized full and open competition, suggesting a competitive bidding process. 3. The contract duration is 1955 days, spanning from February 2017 to June 2022. 4. The service falls under Pharmacy Benefit Management and Third Party Administration of Insurance and Pension Funds.

Value Assessment

Rating: good

The contract's value of $39.3 million for pharmacy benefit management over approximately five years appears reasonable given the scope of services. Benchmarking against similar large-scale PBM contracts would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The use of full and open competition indicates that multiple vendors had the opportunity to bid, likely leading to competitive pricing. The agency aimed to secure the best value through this process.

Taxpayer Impact: Competitive bidding generally ensures taxpayer funds are used efficiently by driving down costs through market forces.

Public Impact

Ensures healthcare access and prescription drug affordability for Peace Corps personnel. Supports the health and well-being of individuals serving abroad. Provides essential administrative services for insurance and pension funds related to healthcare.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration is lengthy, potentially leading to price increases over time.
Lack of specific performance metrics makes it difficult to assess value for money.

Positive Signals

Full and open competition utilized.
Clear definition of services provided.

Sector Analysis

This procurement falls within the healthcare services sector, specifically focusing on the administration of pharmacy benefits. Spending benchmarks for PBM services can vary significantly based on the covered population size and complexity of services.

Small Business Impact

The data does not indicate whether small businesses were involved as subcontractors or prime contractors in this procurement. Further analysis would be needed to determine small business participation.

Oversight & Accountability

The contract was awarded by the Peace Corps, which has established oversight mechanisms for its procurements. However, the effectiveness of this oversight in ensuring optimal value and performance requires further investigation.

Related Government Programs

Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds
Peace Corps Contracting
Peace Corps Programs

Risk Flags

Potential for price increases over the contract's long duration.
Lack of transparency on performance metrics and evaluation.
Limited insight into specific cost drivers and savings achieved.
No indication of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Peace Corps awarded $39.3 million to INTERNATIONAL MEDICAL GROUP INC. HEALTH CARE SERVICE BENEFITS PROCUREMENT. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL MEDICAL GROUP INC.

Which agency awarded this contract?

Awarding agency: Peace Corps (Peace Corps).

What is the total obligated amount?

The obligated amount is $39.3 million.

What is the period of performance?

Start: 2017-02-21. End: 2022-06-30.

What was the specific methodology used to determine the $39.3 million contract value, and how does it compare to industry standards for similar services?

The contract value is likely based on estimated utilization rates, drug costs, and administrative fees over the contract period. A detailed cost breakdown from the agency would be needed for a precise comparison. Industry standards for PBM contracts vary widely, influenced by factors like the number of covered lives, formulary management complexity, and rebate negotiations. Without specific details on the Peace Corps's population and benefit design, a direct benchmark is challenging.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract, and how was International Medical Group Inc.'s performance measured?

The provided data does not specify the KPIs or SLAs for this contract. Effective oversight would typically involve tracking metrics such as prescription fill rates, cost savings achieved through formulary management, member satisfaction, and claims processing accuracy. Without this information, it's difficult to assess the contractor's performance and the overall value delivered to the Peace Corps.

Given the five-year duration, what provisions were in place to manage potential price escalations or changes in healthcare regulations that could impact the contract's cost-effectiveness?

The contract type is 'FIRM FIXED PRICE,' which generally locks in the price and shifts the risk of cost overruns to the contractor. However, long-term contracts may include clauses for economic price adjustments or allow for modifications if significant regulatory changes occur. The specific terms regarding price adjustments and contract modifications would need to be reviewed in the full contract document to fully assess risk management.

Industry Classification

NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: PC-16-R-007

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sirius International Insurance Group Ltd

Address: 2960 N MERIDIAN ST, INDIANAPOLIS, IN, 46208

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

Financial Breakdown

Contract Ceiling: $51,363,468

Exercised Options: $39,283,475

Current Obligation: $39,283,475

Actual Outlays: $22,873,699

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline