HHS awards $124.5M for Anthim, a critical pharmaceutical, with no competition

Contract Overview

Contract Amount: $124,523,123 ($124.5M)

Contractor: Elusys Therapeutics Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2024-05-01

End Date: 2028-12-31

Contract Duration: 1,705 days

Daily Burn Rate: $73.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ANTHIM (OBILTOXAXIMAB)

Place of Performance

Location: PARSIPPANY, MORRIS County, NEW JERSEY, 07054

State: New Jersey Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $124.5 million to ELUSYS THERAPEUTICS INC for work described as: ANTHIM (OBILTOXAXIMAB) Key points: 1. The contract's value of $124.5 million represents a significant investment in a specific pharmaceutical product. 2. The lack of competition raises questions about potential price inflation and the absence of market-driven cost efficiencies. 3. The contract duration of over 5 years suggests a long-term strategic need for this product. 4. The sole-source nature of this award warrants scrutiny regarding the justification for not seeking competitive bids. 5. Performance will be closely monitored given the critical nature of the pharmaceutical and the single-source award. 6. The award is positioned within the broader context of national biodefense and public health preparedness.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific, potentially unique, pharmaceutical product. Without competitive bids, it's difficult to assess if the $124.5 million represents a fair market price or if there's an opportunity for cost savings through competition. The fixed-price contract type provides some cost certainty, but the absence of competing offers means there's no direct comparison to gauge value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Elusys Therapeutics Inc. was the only bidder considered. The justification for this approach is not detailed here but typically involves circumstances where only one responsible source can provide the required product or service. The lack of competition limits price discovery and may result in a higher cost to the government than if multiple vendors had vied for the contract.

Taxpayer Impact: Taxpayers may be paying a premium for this pharmaceutical due to the absence of competitive pressure to lower prices. The government has limited leverage to negotiate a better deal when only one supplier is available.

Public Impact

The primary beneficiaries are the citizens of the United States, who will have access to Anthim for potential public health emergencies. The service delivered is the manufacturing and supply of a critical pharmaceutical product, Anthim (Obiltoxaximab). The geographic impact is national, ensuring availability across the US. Workforce implications are primarily within the pharmaceutical manufacturing sector, supporting jobs at Elusys Therapeutics Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source awards can reduce government leverage in future negotiations.
Dependence on a single supplier creates supply chain risk.
Limited transparency into the cost justification for the award.

Positive Signals

Ensures availability of a critical pharmaceutical for national health security.
Long-term contract provides supply chain stability for this specific product.
Fixed-price contract offers cost predictability for the government.

Sector Analysis

This contract falls within the pharmaceutical preparation manufacturing sector, a critical component of the healthcare and biodefense industries. The market for such specialized pharmaceuticals can be limited, often involving a small number of manufacturers with unique capabilities. Spending in this area is often driven by national security and public health preparedness needs, rather than purely commercial market dynamics. Comparable spending benchmarks are difficult to establish without more information on the specific therapeutic area and market exclusivity.

Small Business Impact

This contract does not appear to involve a small business set-aside, as the awardee is Elusys Therapeutics Inc. There is no information provided regarding subcontracting plans with small businesses. The focus on a single, large-value contract for a specialized pharmaceutical may limit opportunities for small businesses to participate in this specific procurement, though they may be involved in earlier stages of drug development or supply chains.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Health and Human Services (HHS), specifically the Office of the Assistant Secretary for Preparedness and Response (ASPR). Accountability measures will be tied to the contract's performance clauses, delivery schedules, and quality standards. Transparency may be limited due to the sole-source nature, but contract details and performance reports are typically subject to federal procurement regulations and potential Inspector General reviews.

Related Government Programs

Biodefense and Pandemic Preparedness Programs
Strategic National Stockpile
Medical Countermeasures

Risk Flags

Sole-source award lacks competitive justification.
Potential for overpayment due to lack of competition.
Supply chain vulnerability due to single-source dependency.
Limited transparency on cost-effectiveness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $124.5 million to ELUSYS THERAPEUTICS INC. ANTHIM (OBILTOXAXIMAB)

Who is the contractor on this award?

The obligated recipient is ELUSYS THERAPEUTICS 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 $124.5 million.

What is the period of performance?

Start: 2024-05-01. End: 2028-12-31.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source is available, or in cases of urgent and compelling need where competition is not feasible. For a pharmaceutical like Anthim, this could be due to patent protection, unique manufacturing capabilities, or its inclusion in specific government preparedness initiatives where only one vendor can meet the requirements within the necessary timeframe. A detailed review of the contract file and justification documents would be required to ascertain the precise reasons.

How does the $124.5 million award compare to historical spending on Anthim or similar biodefense pharmaceuticals?

Historical spending data for Anthim is not provided in the dataset. To compare this $124.5 million award, one would need to research past contracts awarded for Anthim by HHS or other agencies, as well as contracts for similar biodefense or emergency-use pharmaceuticals. Factors influencing historical spending include the quantity procured, the stage of the drug's development or approval, and the competitive landscape at the time of previous awards. Without this comparative data, it's difficult to assess if the current award represents an increase, decrease, or is in line with previous investments. The sole-source nature of this award also complicates direct comparisons to potentially competed contracts in the past.

What are the key performance indicators (KPIs) and deliverables expected under this contract?

The provided data does not specify the key performance indicators (KPIs) or detailed deliverables for this contract. However, for a pharmaceutical supply contract, typical KPIs would likely include adherence to delivery schedules, product quality and purity standards, proper storage and handling, and potentially responsiveness to surge demands. Deliverables would primarily involve the timely supply of specified quantities of Anthim, likely in accordance with agreed-upon specifications and packaging. The contract's fixed-price nature suggests that the government is paying a set amount for the successful delivery of these goods and services.

What is the risk associated with relying on a single supplier for this critical pharmaceutical?

Relying on a single supplier for a critical pharmaceutical like Anthim introduces several risks. The most significant is supply chain disruption; if Elusys Therapeutics Inc. faces manufacturing issues, natural disasters, or other operational challenges, the government's access to the drug could be jeopardized. This dependence also reduces the government's negotiating power in future procurements, potentially leading to higher prices or less favorable terms. Furthermore, it limits the opportunity for innovation or improvement that might come from competition among multiple suppliers. The government may mitigate some of these risks through robust inventory management, contingency planning, and potentially by encouraging the development of alternative suppliers over the long term.

What is the track record of Elusys Therapeutics Inc. in fulfilling government contracts, particularly for pharmaceuticals?

The provided data indicates Elusys Therapeutics Inc. is the awardee, but it does not offer details on their historical performance or track record with government contracts. To assess their reliability, one would need to examine past contract awards, performance evaluations (such as Contractor Performance Assessment Reporting System - CPARS), and any history of contract disputes or terminations. A positive track record would suggest a lower risk associated with this award, while a history of performance issues would raise concerns about the government's ability to secure timely and quality delivery of Anthim.

How does the contract duration of over 5 years (ending Dec 2028) align with the expected shelf-life and strategic need for Anthim?

The contract duration of approximately 5.5 years (May 2024 to December 2028) suggests a long-term strategic requirement for Anthim. This duration implies that the government anticipates a sustained need for this pharmaceutical, potentially as part of the Strategic National Stockpile or for ongoing preparedness initiatives. The alignment with the drug's shelf-life is a critical consideration; the contract must ensure that the procured quantities remain viable throughout the period of need, or include provisions for rotation and replacement. The extended duration also provides stability for the supplier, enabling them to plan production and investment accordingly.

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: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Nighthawk Biosciences, Inc.

Address: 2001 ROUTE 46 STE 310, PARSIPPANY, NJ, 07054

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

Financial Breakdown

Contract Ceiling: $124,523,123

Exercised Options: $124,523,123

Current Obligation: $124,523,123

Actual Outlays: $62,159,063

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline