HHS awards $392M contract for First Databank drug pricing tools, renewing services through 2026

Contract Overview

Contract Amount: $3,923,351 ($3.9M)

Contractor: First Databank Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2022-03-17

End Date: 2026-03-23

Contract Duration: 1,467 days

Daily Burn Rate: $2.7K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: FIRST DATABANK DRUG INFORMATION AND PRICING DATABASE AND DECISION SUPPORT TOOLS AND RENEWAL SERVICES

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20857

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $3.9 million to FIRST DATABANK INC for work described as: FIRST DATABANK DRUG INFORMATION AND PRICING DATABASE AND DECISION SUPPORT TOOLS AND RENEWAL SERVICES Key points: 1. The contract focuses on essential drug information and pricing decision support tools. 2. Competition was not pursued under Simplified Acquisition Procedures (SAP), raising questions about price discovery. 3. The renewal of services suggests a continued need and potential reliance on the incumbent provider. 4. The sector is healthcare information services, critical for pharmaceutical cost management.

Value Assessment

Rating: questionable

The contract value of $392.3M over four years for directory and mailing list services is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar data services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was 'NOT COMPETED UNDER SAP,' indicating a limited competition approach. This method may not yield the best prices for taxpayers as it bypasses a broader solicitation process.

Taxpayer Impact: The lack of full and open competition could lead to higher costs for taxpayers than a more competitive procurement might achieve.

Public Impact

Ensures access to critical drug pricing data for healthcare decision-making. Supports the Department of Health and Human Services in managing pharmaceutical costs. Potential for increased healthcare costs due to non-competitive award. Impacts pharmaceutical companies and healthcare providers relying on accurate pricing information.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
Lack of price discovery
Potential for overpayment

Positive Signals

Ensures continuity of essential services
Supports critical healthcare functions

Sector Analysis

This contract falls within the healthcare IT and data services sector, specifically focusing on pharmaceutical pricing and decision support. Benchmarks for similar data services are hard to establish without competitive data, but large-scale data subscriptions can be costly.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as the contractor is 'FIRST DATABANK INC'. There is no indication of small business participation or subcontracting goals.

Oversight & Accountability

The contract was awarded under a limited competition, suggesting that standard oversight mechanisms for competitive procurements may not have been fully utilized. Further review of the justification for limited competition is warranted.

Related Government Programs

Directory and Mailing List Publishers
Department of Health and Human Services Contracting
Office of the Assistant Secretary for Financial Resources Programs

Risk Flags

Limited competition
Potential for non-competitive pricing
Lack of transparency in award justification
Reliance on incumbent provider
Significant contract value without clear benchmarks

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $3.9 million to FIRST DATABANK INC. FIRST DATABANK DRUG INFORMATION AND PRICING DATABASE AND DECISION SUPPORT TOOLS AND RENEWAL SERVICES

Who is the contractor on this award?

The obligated recipient is FIRST DATABANK INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Financial Resources).

What is the total obligated amount?

The obligated amount is $3.9 million.

What is the period of performance?

Start: 2022-03-17. End: 2026-03-23.

What is the justification for not competing this contract more broadly, given its significant value?

The provided data states the contract was 'NOT COMPETED UNDER SAP.' This implies a justification was made, likely related to urgency, unique capabilities of the incumbent, or specific program requirements. However, without further documentation, the rationale remains unclear and warrants investigation to ensure taxpayer value.

How does the pricing of this contract compare to publicly available drug pricing databases or similar government contracts?

Direct comparison is challenging without access to the specific service levels and data granularity provided by First Databank. However, the $392M price tag for a four-year contract for directory and mailing list services is substantial. A review against commercial off-the-shelf (COTS) solutions or other government-wide contracts for similar data services would be prudent.

What are the risks associated with relying on a single-source provider for critical drug pricing information?

The primary risk is the potential for inflated costs due to a lack of competitive pressure. Additionally, there's a risk of service disruption if the sole provider faces issues, and a lack of incentive for the provider to innovate or improve services beyond the contract's minimum requirements.

Industry Classification

NAICS: Information › Newspaper, Periodical, Book, and Directory Publishers › Directory and Mailing List Publishers

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - DELIVERY

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 500 E. 96TH STREET, STE 500, INDIANAPOLIS, IN, 46240

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

Financial Breakdown

Contract Ceiling: $3,923,351

Exercised Options: $3,923,351

Current Obligation: $3,923,351

Actual Outlays: $3,099,460

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline