TRICARE Pharmacy Services Contract Awarded to Express Scripts Inc. for $647.4M
Contract Overview
Contract Amount: $647,401,029 ($647.4M)
Contractor: Express Scripts Inc
Awarding Agency: Department of Defense
Start Date: 2018-03-22
End Date: 2019-04-30
Contract Duration: 404 days
Daily Burn Rate: $1.6M/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: TRICARE PHARMACY SERVICES
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63121
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $647.4 million to EXPRESS SCRIPTS INC for work described as: TRICARE PHARMACY SERVICES Key points: 1. Significant contract value of over $647 million for pharmacy services. 2. Express Scripts Inc. is the sole contractor for this delivery order. 3. Potential risk associated with single-source provider for essential healthcare services. 4. Spending falls within the Defense Health Agency's sector.
Value Assessment
Rating: good
The contract value of $647.4M for TRICARE Pharmacy Services appears reasonable given the scope of providing prescription drug benefits to military personnel and their families. Benchmarking against similar large-scale government health insurance contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. This method is generally expected to yield fair pricing and good value for the government.
Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently for essential pharmacy services.
Public Impact
Ensures prescription drug access for millions of TRICARE beneficiaries. Impacts the cost and availability of medications for military families. Contributes to the overall healthcare delivery system for the Department of Defense.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price increases in future contract renewals.
- Dependence on a single vendor for critical pharmacy services.
Positive Signals
- Awarded through full and open competition.
- Provides essential healthcare services to a large beneficiary population.
Sector Analysis
This contract falls under the Healthcare sector, specifically direct health and medical insurance carriers. Government spending in this area is substantial, driven by the need to provide comprehensive health benefits to federal employees and military personnel.
Small Business Impact
The data does not indicate any specific set-asides for small businesses in this contract, suggesting it was awarded to a large prime contractor. Further analysis would be needed to determine if small businesses are involved as subcontractors.
Oversight & Accountability
The contract was awarded by the Defense Health Agency, part of the Department of Defense, which has established oversight mechanisms for healthcare contracts. Monitoring performance and costs is crucial for accountability.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- Sole provider risk
- Potential for price escalation in future
- Dependence on contractor performance
- Limited visibility into subcontractor performance
Tags
direct-health-and-medical-insurance-carr, department-of-defense, mo, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $647.4 million to EXPRESS SCRIPTS INC. TRICARE PHARMACY SERVICES
Who is the contractor on this award?
The obligated recipient is EXPRESS SCRIPTS INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $647.4 million.
What is the period of performance?
Start: 2018-03-22. End: 2019-04-30.
What is the projected cost savings or value added by using Express Scripts Inc. compared to alternative pharmacy benefit managers?
Without specific comparative data on alternative bids or performance metrics, it's challenging to quantify the exact value added. However, the full and open competition process implies that Express Scripts' proposal was deemed the most advantageous. Future contract performance reviews and comparisons with industry benchmarks will be key to assessing long-term value.
What are the key performance indicators (KPIs) used to evaluate Express Scripts Inc.'s service delivery under this contract?
Key performance indicators likely include metrics such as prescription fulfillment rates, drug cost containment, beneficiary satisfaction, claims processing accuracy, and adherence to formulary requirements. The Defense Health Agency would monitor these KPIs to ensure the contractor meets contractual obligations and provides high-quality pharmacy services.
How does this contract contribute to the overall cost-effectiveness of the TRICARE program?
This contract is a significant component of the TRICARE program's pharmacy benefit. By leveraging Express Scripts' capabilities, the DoD aims to achieve economies of scale and potentially negotiate favorable drug pricing. The effectiveness in controlling overall healthcare costs depends on ongoing contract management and market dynamics.
Industry Classification
NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers
Product/Service Code: MEDICAL SERVICES › GENERAL HEALTH CARE SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Priority Healthcare Distribution Inc
Address: 1 EXPRESS WAY, SAINT LOUIS, MO, 63121
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $647,401,029
Exercised Options: $647,401,029
Current Obligation: $647,401,029
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HT940214D0002
IDV Type: IDC
Timeline
Start Date: 2018-03-22
Current End Date: 2019-04-30
Potential End Date: 2019-04-30 00:00:00
Last Modified: 2025-08-06
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