TRICARE Pharmacy Services Contract Awarded to Express Scripts Inc. for $660 Million
Contract Overview
Contract Amount: $660,326,034 ($660.3M)
Contractor: Express Scripts Inc
Awarding Agency: Department of Defense
Start Date: 2019-04-05
End Date: 2020-04-30
Contract Duration: 391 days
Daily Burn Rate: $1.7M/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 $660.3 million to EXPRESS SCRIPTS INC for work described as: TRICARE PHARMACY SERVICES Key points: 1. Significant contract value of $660.3 million for pharmacy services. 2. Express Scripts Inc. is the sole contractor, raising questions about competition. 3. The contract falls under the Defense Health Agency within the Department of Defense. 4. Potential risks associated with a single provider for essential healthcare services.
Value Assessment
Rating: good
The contract value of $660.3 million appears substantial for pharmacy services. Benchmarking against similar large-scale pharmacy benefit management contracts would be necessary for a precise pricing 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. However, the data indicates a single awardee, Express Scripts Inc., which warrants further investigation into the bidding dynamics and price discovery.
Taxpayer Impact: The firm fixed price contract aims to control costs for TRICARE pharmacy services, potentially leading to taxpayer savings if the pricing is competitive.
Public Impact
Millions of military personnel and their families rely on TRICARE for healthcare, including prescription drugs. The efficiency and cost-effectiveness of this contract directly impact the healthcare benefits provided to service members. A single provider for such a critical service raises concerns about service continuity and potential price increases in future contracts.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole awardee for a large contract
- Potential for price increases if competition is limited in practice
Positive Signals
- Firm fixed price contract structure
- Awarded under full and open competition
Sector Analysis
This contract falls within the Healthcare sector, specifically related to health insurance carriers and pharmacy benefit management. Spending benchmarks for similar large-scale government pharmacy contracts are typically in the hundreds of millions to billions of dollars annually.
Small Business Impact
The provided data does not indicate any specific set-asides for small businesses. Large contracts like this are often awarded to major corporations, potentially limiting opportunities for smaller entities in this space.
Oversight & Accountability
The Department of Defense, through the Defense Health Agency, is responsible for overseeing this contract. Robust oversight is crucial to ensure service delivery meets quality standards and cost-effectiveness, especially given the significant taxpayer investment.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- Sole awardee raises concerns about long-term competition.
- Potential for price escalation in future contract renewals.
- Dependence on a single provider for critical healthcare services.
- Need for robust performance monitoring to ensure quality and cost-effectiveness.
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 $660.3 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 $660.3 million.
What is the period of performance?
Start: 2019-04-05. End: 2020-04-30.
What was the competitive landscape during the bidding process, and were there any factors that limited the number of bids received?
While the contract was awarded under 'full and open competition,' the fact that only one awardee, Express Scripts Inc., was selected suggests that either only one entity met the stringent requirements, or other potential bidders were deterred. Further analysis of the solicitation documents and bid evaluation criteria would clarify the competitive dynamics and ensure maximum value for taxpayer dollars.
How does the per-unit cost of prescriptions under this contract compare to industry benchmarks for similar government and commercial pharmacy benefit management services?
A detailed cost-benefit analysis comparing the per-unit prescription costs under this TRICARE contract against established industry benchmarks is essential. This comparison should account for the specific services provided, volume discounts, and the unique requirements of serving a military population to determine if the $660 million expenditure represents a fair and efficient use of funds.
What mechanisms are in place to ensure the continued effectiveness and quality of pharmacy services provided by Express Scripts Inc. throughout the contract duration?
The contract's effectiveness relies on continuous monitoring and performance metrics. The Defense Health Agency should have established key performance indicators (KPIs) and quality assurance processes to track service delivery, patient satisfaction, and formulary management. Regular performance reviews and clear channels for addressing any deficiencies are critical to maintaining high-quality healthcare for beneficiaries.
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
Solicitation ID: HT940213R0001
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: $660,326,034
Exercised Options: $660,326,034
Current Obligation: $660,326,034
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: 2019-04-05
Current End Date: 2020-04-30
Potential End Date: 2020-04-30 00:00:00
Last Modified: 2025-08-07
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