HHS awards $9M for Pharmaceutical Supplies to McKesson Corp via Full and Open Competition

Contract Overview

Contract Amount: $9,000,000 ($9.0M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2026-01-14

End Date: 2026-08-09

Contract Duration: 207 days

Daily Burn Rate: $43.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PHARMACEUTICAL SUPPLIES, PHARMACY PRIME VENDOR PURCHASES FOR NSSC CUSTOMERS.

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73114

State: Oklahoma Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $9.0 million to MCKESSON CORPORATION for work described as: PHARMACEUTICAL SUPPLIES, PHARMACY PRIME VENDOR PURCHASES FOR NSSC CUSTOMERS. Key points: 1. Significant contract value of $9 million for essential pharmaceutical supplies. 2. McKesson Corporation, a major player, holds this prime vendor contract. 3. Competition method is 'Full and Open', suggesting potential for competitive pricing. 4. The sector is Pharmaceutical Preparation Manufacturing, critical for healthcare services.

Value Assessment

Rating: good

The contract value of $9 million appears reasonable for prime vendor pharmaceutical supply services. Benchmarking against similar large-scale contracts would provide a more precise assessment of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition', indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives the best value.

Taxpayer Impact: The competitive nature of this award is expected to yield favorable pricing, maximizing the value of taxpayer funds allocated for essential pharmaceutical supplies.

Public Impact

Ensures availability of critical pharmaceutical supplies for Indian Health Service (IHS) customers. Supports the IHS mission of providing healthcare services to American Indians and Alaska Natives. Potential for cost savings through competitive bidding process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in pharmaceutical markets.
Dependence on a single prime vendor for a broad range of supplies.

Positive Signals

Awarded through full and open competition.
Clear contract end date provides predictability.
Firms fixed price contract limits cost escalation.

Sector Analysis

This contract falls within the Pharmaceutical Preparation Manufacturing sector, which is a vital component of the healthcare industry. Spending in this area is consistently high due to the essential nature of medications and medical supplies.

Small Business Impact

While the prime vendor is a large corporation, the contract's nature as a prime vendor agreement may involve downstream opportunities for smaller businesses in distribution and logistics, though this is not explicitly detailed.

Oversight & Accountability

The contract is managed by the Department of Health and Human Services (HHS) and specifically serves Indian Health Service (IHS) customers. Oversight would focus on delivery, quality, and adherence to the firm fixed price.

Related Government Programs

Pharmaceutical Preparation Manufacturing
Department of Health and Human Services Contracting
Indian Health Service Programs

Risk Flags

Potential for supply chain disruptions.
Dependence on a single large corporation.
Pharmaceutical market price volatility.
Ensuring equitable distribution to all IHS customers.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $9.0 million to MCKESSON CORPORATION. PHARMACEUTICAL SUPPLIES, PHARMACY PRIME VENDOR PURCHASES FOR NSSC CUSTOMERS.

Who is the contractor on this award?

The obligated recipient is MCKESSON CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Indian Health Service).

What is the total obligated amount?

The obligated amount is $9.0 million.

What is the period of performance?

Start: 2026-01-14. End: 2026-08-09.

What is the historical pricing trend for similar pharmaceutical prime vendor contracts awarded by IHS or other federal agencies?

Historical pricing data for similar contracts is crucial for a comprehensive value assessment. Analyzing past awards for pharmaceutical prime vendor services, particularly those with similar scope and duration, can reveal trends in per-unit costs and overall contract value. This analysis helps determine if the current $9 million award is competitive and reflects fair market value, considering factors like inflation and market dynamics.

What are the specific risks associated with relying on a single prime vendor for pharmaceutical supplies, especially in remote or underserved areas?

Reliance on a single prime vendor introduces risks such as supply chain disruptions, limited flexibility in sourcing alternative products during shortages, and potential for price increases if competition diminishes in future solicitations. For remote areas served by IHS, these risks are amplified, potentially impacting patient care continuity. Robust contingency plans and performance monitoring are essential to mitigate these vulnerabilities.

How effectively does the 'Full and Open Competition' process ensure cost-effectiveness and quality for pharmaceutical supplies in this contract?

Full and Open Competition is designed to maximize cost-effectiveness by encouraging multiple bids, driving down prices. It also promotes quality by allowing vendors to compete on both price and performance. For pharmaceutical supplies, this process should ensure that the IHS receives high-quality medications and related products at competitive rates, contributing to the efficient use of taxpayer funds and supporting patient health outcomes.

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: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6555 STATE HIGHWAY 161, IRVING, TX, 75039

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

Financial Breakdown

Contract Ceiling: $9,000,000

Exercised Options: $9,000,000

Current Obligation: $9,000,000

Actual Outlays: $9,000,000

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36W79720D0001

IDV Type: IDC

Timeline