HHS awarded $19.6M to Chronimed Inc. for state AIDS drug assistance program medications
Contract Overview
Contract Amount: $19,575,844 ($19.6M)
Contractor: Chronimed Inc
Awarding Agency: Department of Health and Human Services
Start Date: 2004-09-28
End Date: 2006-09-30
Contract Duration: 732 days
Daily Burn Rate: $26.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: COST NO FEE
Sector: Healthcare
Official Description: STATE AIDS DRUG ASSISTANCE PROGRAM WAITING LIST MEDICATIONS
Place of Performance
Location: EDEN PRAIRIE, HENNEPIN County, MINNESOTA, 55344
Plain-Language Summary
Department of Health and Human Services obligated $19.6 million to CHRONIMED INC for work described as: STATE AIDS DRUG ASSISTANCE PROGRAM WAITING LIST MEDICATIONS Key points: 1. Contract value appears reasonable given the duration and scope of providing essential medications. 2. Full and open competition suggests a competitive bidding process, potentially leading to better pricing. 3. The contract duration of two years indicates a stable supply chain for critical medications. 4. Performance context is tied to the critical need for AIDS drug assistance, impacting patient health outcomes. 5. This contract falls within the Healthcare sector, specifically focusing on pharmaceutical supply for vulnerable populations.
Value Assessment
Rating: good
The contract value of $19.6 million over two years for the State AIDS Drug Assistance Program (ADAP) medications appears to be a fair allocation of resources. Benchmarking against similar contracts for pharmaceutical distribution to state programs would provide a more precise value assessment. However, considering the critical nature of the medications and the administrative overhead involved in distribution, the pricing seems within a reasonable range. The contract type 'COST NO FEE' suggests that the government reimburses the contractor for allowable costs plus a fixed fee, which can be efficient if costs are well-managed.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 5 bidders suggests a healthy level of competition for this contract. This broad competition is generally favorable for price discovery and ensures that the government receives offers from a diverse range of qualified vendors, potentially leading to more competitive pricing.
Taxpayer Impact: Taxpayers benefit from full and open competition as it drives down costs through market forces, ensuring that federal funds are used efficiently for essential healthcare services.
Public Impact
Individuals enrolled in Minnesota's State AIDS Drug Assistance Program (ADAP) benefit from uninterrupted access to necessary medications. The contract ensures the reliable supply and distribution of critical pharmaceuticals, supporting the health and well-being of individuals living with HIV/AIDS. The geographic impact is focused on the state of Minnesota, ensuring that residents within the state receive these vital services. Workforce implications include employment opportunities within Chronimed Inc. and potentially within the network of pharmacies involved in dispensing the medications.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if 'COST NO FEE' structure is not tightly managed.
- Dependence on a single contractor for a critical healthcare supply chain.
- Ensuring equitable distribution across all eligible recipients within Minnesota.
Positive Signals
- Full and open competition suggests a robust selection process.
- Contract duration provides stability for program beneficiaries.
- Focus on a critical public health need (AIDS drug assistance).
Sector Analysis
This contract operates within the broader healthcare and pharmaceutical sector, specifically addressing the supply chain for life-saving medications. The market for pharmaceutical distribution services is competitive, with numerous companies capable of fulfilling such requirements. The government's role in funding and facilitating access to these medications through programs like ADAP is crucial for public health. Comparable spending benchmarks would involve analyzing other state-level ADAP contracts or federal procurements for similar pharmaceutical distribution services.
Small Business Impact
The provided data does not indicate any specific small business set-aside provisions for this contract. As it was awarded under full and open competition with 5 bidders, it's possible that small businesses could have participated if they met the qualifications. Further analysis would be needed to determine if subcontracting opportunities were made available to small businesses by the prime contractor, Chronimed Inc.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS), specifically the Health Resources and Services Administration (HRSA). Mechanisms likely include regular reporting requirements from the contractor, performance reviews, and financial audits to ensure compliance with the contract terms and efficient use of funds. The 'COST NO FEE' contract type necessitates close monitoring of incurred costs.
Related Government Programs
- State AIDS Drug Assistance Programs (ADAPs)
- Ryan White HIV/AIDS Program
- Pharmaceutical Supply Chain Management
- Federal Drug Procurement
Risk Flags
- Potential for supply chain disruption
- Cost management under 'COST NO FEE' contract
- Ensuring equitable access for all beneficiaries
Tags
healthcare, pharmaceuticals, hiv-aids, state-aid, cost-plus-fixed-fee, full-and-open-competition, minnesota, department-of-health-and-human-services, health-resources-and-services-administration, medications, drug-distribution
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $19.6 million to CHRONIMED INC. STATE AIDS DRUG ASSISTANCE PROGRAM WAITING LIST MEDICATIONS
Who is the contractor on this award?
The obligated recipient is CHRONIMED INC.
Which agency awarded this contract?
Awarding agency: Department of Health and Human Services (Health Resources and Services Administration).
What is the total obligated amount?
The obligated amount is $19.6 million.
What is the period of performance?
Start: 2004-09-28. End: 2006-09-30.
What is Chronimed Inc.'s track record with federal contracts, particularly in pharmaceutical distribution?
Chronimed Inc. has a history of federal contracting, with this specific contract valued at $19.6 million for ADAP medications being a significant award. While the provided data doesn't detail their entire federal contract history, their selection for this role suggests they met the qualifications and demonstrated capability in pharmaceutical supply and distribution. Further investigation into their past performance on similar contracts, including any past performance evaluations or awards/debarments, would provide a more comprehensive understanding of their reliability and expertise in managing federal healthcare procurements.
How does the $19.6 million contract value compare to similar state ADAP medication procurements?
Direct comparison of the $19.6 million contract value to other state ADAP medication procurements requires access to specific data for those contracts. However, the value represents a substantial investment in ensuring access to critical medications for individuals with HIV/AIDS in Minnesota over a two-year period. Factors influencing this value include the number of beneficiaries, the specific medications procured, prevailing drug prices, and the scope of distribution services. The 'COST NO FEE' structure implies that the government reimburses allowable costs plus a fixed fee, making the total value dependent on actual expenditures. A comprehensive benchmark would involve analyzing the per-patient cost or per-medication cost across various state ADAP programs.
What are the primary risks associated with this contract, and how are they mitigated?
Key risks include potential disruptions to the pharmaceutical supply chain, ensuring equitable distribution to all eligible beneficiaries, and managing costs effectively under the 'COST NO FEE' structure. Mitigation strategies likely involve robust inventory management, strong relationships with pharmaceutical manufacturers, clear distribution protocols, and diligent oversight by HRSA to monitor expenditures and performance. The contract's two-year duration provides some stability, but unforeseen market fluctuations or public health emergencies could still pose challenges. The competitive nature of the award may also incentivize the contractor to maintain high performance standards to secure future contracts.
How effective is the State AIDS Drug Assistance Program (ADAP) in Minnesota, and how does this contract contribute to its effectiveness?
The State AIDS Drug Assistance Program (ADAP) in Minnesota, like other ADAPs nationwide, plays a critical role in ensuring that individuals with HIV/AIDS who are uninsured or underinsured can access necessary antiretroviral medications. This contract directly contributes to the program's effectiveness by securing a reliable supply of these vital drugs through Chronimed Inc. The program's overall effectiveness is measured by its ability to reduce viral load, improve patient health outcomes, and prevent transmission. By ensuring timely and consistent access to medications, this contract supports these critical public health goals within Minnesota.
What are the historical spending patterns for ADAP medications in Minnesota or similar federal procurements?
Historical spending patterns for ADAP medications in Minnesota would reveal trends in drug costs, patient enrollment, and program utilization over time. This contract's value of $19.6 million over two years can be compared to previous funding levels for ADAP medications in the state. Federal procurements for similar pharmaceutical distribution services can also offer context. Analyzing these patterns helps in understanding the long-term financial commitment required for such programs, identifying any significant cost escalations, and assessing the efficiency of federal funding allocation for HIV/AIDS treatment.
Industry Classification
NAICS: Retail Trade › Health and Personal Care Stores › Pharmacies and Drug Stores
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 5
Pricing Type: COST NO FEE (S)
Evaluated Preference: NONE
Contractor Details
Address: 10900 RED CIRCLE DRIVE, MINNETONKA, MN, 03
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $39,575,844
Exercised Options: $39,575,844
Current Obligation: $19,575,844
Timeline
Start Date: 2004-09-28
Current End Date: 2006-09-30
Potential End Date: 2006-09-30 00:00:00
Last Modified: 2008-12-09
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