HHS awards $47.7M for critical Ciprofloxin injection, ensuring National Stockpile readiness

Contract Overview

Contract Amount: $47,750,653 ($47.8M)

Contractor: Sagent Pharmaceuticals, Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2022-09-26

End Date: 2024-12-31

Contract Duration: 827 days

Daily Burn Rate: $57.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: CIPROFLOXACIN 5% DEXTROSE, INJECTION, 400MG/200ML, (2MG/ML) IS A MEDICAL COUNTERMEASURE (MCM) REQUIRED BY THE SNS

Place of Performance

Location: SCHAUMBURG, COOK County, ILLINOIS, 60195

State: Illinois Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $47.8 million to SAGENT PHARMACEUTICALS, INC for work described as: CIPROFLOXACIN 5% DEXTROSE, INJECTION, 400MG/200ML, (2MG/ML) IS A MEDICAL COUNTERMEASURE (MCM) REQUIRED BY THE SNS Key points: 1. Contract ensures availability of a vital medical countermeasure for the Strategic National Stockpile. 2. Sole awardee suggests potential concentration in this specific pharmaceutical niche. 3. Long-term contract duration indicates a sustained need for this product. 4. Fixed-price contract type offers cost certainty for the government. 5. Geographic location of performance is Illinois, potentially impacting regional logistics. 6. The contract value represents a significant investment in public health preparedness.

Value Assessment

Rating: good

The contract value of $47.7 million over approximately two years for Ciprofloxacin injection appears reasonable given its critical nature as a medical countermeasure. Benchmarking against similar large-volume pharmaceutical procurements for the Strategic National Stockpile (SNS) is challenging without more specific market data. However, the firm fixed-price structure provides cost predictability. The per-unit cost, while not explicitly detailed, is implicitly managed through the overall contract value and delivery schedule.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The fact that there was one award suggests that Sagent Pharmaceuticals, Inc. was the most advantageous offer based on the evaluation criteria. The level of competition, while resulting in a single award, likely contributed to achieving a competitive price for this essential medical countermeasure.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives market forces to secure the best possible pricing and quality for critical supplies like this pharmaceutical.

Public Impact

The primary beneficiaries are the American public, who gain access to a critical medical countermeasure during public health emergencies. The service delivered is the provision of Ciprofloxacin 5% Dextrose Injection, a key component of the Strategic National Stockpile. Geographic impact is national, ensuring availability across the United States. Workforce implications are likely within the pharmaceutical manufacturing and logistics sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for single-source dependency if market competition diminishes in the future.
Reliance on a single contractor for a critical SNS item could pose supply chain risks.
Limited transparency into the specific cost breakdown of the pharmaceutical preparation.

Positive Signals

Ensures a consistent and reliable supply of a vital medical countermeasure.
Long-term contract provides stability for both the government and the contractor.
Firm fixed-price agreement locks in costs, protecting against price fluctuations.

Sector Analysis

The pharmaceutical preparation manufacturing sector is highly regulated and characterized by significant research and development costs, stringent quality control, and complex supply chains. This contract falls within the broader healthcare and life sciences industry, specifically focusing on the production of essential medicines. The market for medical countermeasures is often driven by government stockpiling initiatives and public health needs, which can lead to large, long-term contracts with specific manufacturers.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor is there information suggesting subcontracting opportunities for small businesses. The award to Sagent Pharmaceuticals, Inc., a known entity in the pharmaceutical space, suggests a focus on established manufacturers capable of meeting the scale and regulatory requirements for producing medical countermeasures for the Strategic National Stockpile.

Oversight & Accountability

Oversight for this contract is likely managed by the Office of the Assistant Secretary for Preparedness and Response (ASPR) within HHS. Accountability measures would include adherence to delivery schedules, quality standards, and reporting requirements outlined in the contract. Transparency is facilitated through contract award databases, though detailed cost breakdowns may be proprietary. The Inspector General's office would have jurisdiction for audits and investigations into potential fraud, waste, or abuse.

Related Government Programs

Strategic National Stockpile (SNS) procurements
Medical Countermeasures (MCM) acquisition
Antimicrobial drug supply chain
Pharmaceutical manufacturing contracts

Risk Flags

Potential supply chain concentration risk
Long-term reliance on a single supplier for critical MCM

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $47.8 million to SAGENT PHARMACEUTICALS, INC. CIPROFLOXACIN 5% DEXTROSE, INJECTION, 400MG/200ML, (2MG/ML) IS A MEDICAL COUNTERMEASURE (MCM) REQUIRED BY THE SNS

Who is the contractor on this award?

The obligated recipient is SAGENT PHARMACEUTICALS, 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 $47.8 million.

What is the period of performance?

Start: 2022-09-26. End: 2024-12-31.

What is the historical spending pattern for Ciprofloxacin injection by HHS or related agencies?

Analyzing historical spending for Ciprofloxacin injection by HHS and related agencies requires access to comprehensive federal procurement data. While this specific contract is for $47.7 million, understanding the broader trend involves looking at prior awards for similar formulations and quantities, especially those designated for the Strategic National Stockpile (SNS). Factors such as previous contract durations, awarded amounts, and the number of competing vendors over time would provide context. A significant increase or decrease in spending could indicate shifts in public health priorities, changes in threat assessments, or evolving market dynamics within the pharmaceutical sector. Without specific historical data points for this exact product, it's difficult to ascertain if this award represents a typical investment or a notable deviation.

How does the per-unit cost of this Ciprofloxacin injection compare to market rates or similar government contracts?

Determining the precise per-unit cost and comparing it to market rates or similar government contracts for this Ciprofloxacin injection is challenging without access to the detailed pricing structure within the contract. The total award of $47.7 million is for a specific quantity and duration, and the unit price is embedded within this figure. To perform a robust comparison, one would need to know the total number of units (e.g., vials or doses) procured under this contract and then divide the total award amount by that quantity. Subsequently, this calculated unit price would be benchmarked against publicly available pharmaceutical pricing databases, commercial sales data, or other government contracts for the same or comparable products. Factors like formulation, concentration, packaging, and delivery terms significantly influence pricing, making direct comparisons complex.

What are the specific risks associated with relying on a single contractor for this critical medical countermeasure?

Relying on a single contractor, even one selected through full and open competition, for a critical medical countermeasure like Ciprofloxacin injection presents several risks. Firstly, supply chain disruptions, whether due to manufacturing issues, raw material shortages, natural disasters, or geopolitical events affecting the sole awardee, could lead to immediate shortages. Secondly, a lack of ongoing competition could reduce the incentive for the contractor to innovate or maintain the most cost-effective production methods over the long term. Thirdly, if the contractor faces financial instability or decides to exit the market, the government would need to rapidly procure a replacement, potentially at a higher cost and with delays. Finally, the government's negotiating leverage diminishes significantly once a critical supply chain is dependent on a single entity.

What is the track record of Sagent Pharmaceuticals, Inc. in fulfilling government contracts, particularly for medical countermeasures?

Assessing the track record of Sagent Pharmaceuticals, Inc. in fulfilling government contracts, especially for medical countermeasures, requires a review of their past performance data. This includes examining their history with HHS, the Department of Defense, and other relevant agencies. Key performance indicators would involve on-time delivery rates, adherence to quality specifications, responsiveness to government needs, and any instances of contract disputes or terminations. Information from sources like the Federal Procurement Data System (FPDS) or Contractor Performance Assessment Reporting System (CPARS) can provide insights. A positive track record suggests reliability and capability, while past issues might raise concerns about their ability to consistently meet the demands of this significant contract for the Strategic National Stockpile.

How does the duration and value of this contract align with the typical lifecycle and demand for Ciprofloxacin as a medical countermeasure?

The duration of this contract (approximately 2 years, from late 2022 to late 2024) and its value ($47.7 million) should be evaluated in the context of Ciprofloxacin's role as a medical countermeasure (MCM) and its typical demand patterns. Ciprofloxacin is a broad-spectrum antibiotic used to treat various bacterial infections and is often included in national stockpiles for potential use during public health emergencies or bioterrorism events. The demand for MCMs can be sporadic, driven by specific threats or preparedness exercises. A contract of this length and value suggests a sustained need for maintaining a certain level of inventory, potentially reflecting updated threat assessments or a strategic decision to bolster national reserves. The lifecycle of such stockpiled medications often involves periodic replenishment and rotation to ensure efficacy, making long-term contracts a common procurement strategy.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Nichi-Iko Pharmaceutical CO.,Ltd.

Address: 1901 N ROSELLE RD STE 700, SCHAUMBURG, IL, 60195

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $47,750,653

Exercised Options: $47,750,653

Current Obligation: $47,750,653

Actual Outlays: $47,750,653

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: V797D40094

IDV Type: FSS

Timeline