TRICARE Pharmacy Services Contract Awarded to Express Scripts Inc. for $336.7 Million
Contract Overview
Contract Amount: $336,695,481 ($336.7M)
Contractor: Express Scripts Inc
Awarding Agency: Department of Defense
Start Date: 2022-04-19
End Date: 2022-10-31
Contract Duration: 195 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 $336.7 million to EXPRESS SCRIPTS INC for work described as: TRICARE PHARMACY SERVICES Key points: 1. The contract is for pharmacy services under the TRICARE program. 2. Express Scripts Inc. is the primary contractor. 3. The Department of Defense, specifically the Defense Health Agency, is the awarding agency. 4. The contract was awarded via full and open competition. 5. The contract duration is 195 days.
Value Assessment
Rating: good
The award amount of $336.7 million for a 195-day period suggests a substantial but potentially variable per-diem cost. Benchmarking against similar large-scale pharmacy benefit management contracts would be necessary for a precise value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating a competitive bidding process. This method is generally expected to yield fair market prices and encourage cost-effective solutions.
Taxpayer Impact: The competitive nature of the award aims to ensure taxpayer funds are used efficiently for essential pharmacy services.
Public Impact
Ensures access to prescription medications for TRICARE beneficiaries. Maintains the continuity of pharmacy services for military personnel and their families. Supports the overall health and readiness of the armed forces.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Short contract duration (195 days) may indicate a bridge contract or a need for re-competition.
- Lack of specific performance metrics or outcome data in the provided summary.
- Potential for price fluctuations in pharmaceutical costs over the contract period.
Positive Signals
- Awarded through full and open competition, suggesting a competitive pricing environment.
- Supports a critical healthcare program for military beneficiaries.
- Contract is for a defined period, allowing for future evaluation and adjustments.
Sector Analysis
This contract falls within the Healthcare sector, specifically related to health insurance carriers and pharmacy benefit management. Spending benchmarks in this area are highly variable due to drug costs and service scope.
Small Business Impact
The provided data does not indicate any specific set-asides for small businesses. The nature of this large-scale pharmacy contract may limit direct participation by small businesses, though they could be subcontractors.
Oversight & Accountability
The Defense Health Agency is responsible for overseeing this contract. Standard government oversight mechanisms, including contract performance reviews and audits, would be expected to ensure accountability.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- Short contract duration.
- Limited performance data provided.
- Potential for price volatility in pharmaceutical markets.
- Dependence on a single large contractor for essential services.
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 $336.7 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 $336.7 million.
What is the period of performance?
Start: 2022-04-19. End: 2022-10-31.
What is the projected cost per beneficiary or per prescription under this contract, and how does it compare to industry benchmarks?
The provided data does not offer a per-beneficiary or per-prescription cost. The total award of $336.7 million over 195 days ($1.7 million per day) needs to be contextualized with the number of beneficiaries served and the volume of prescriptions dispensed to establish a meaningful cost per unit. Without this, direct comparison to industry benchmarks is not feasible.
What are the key performance indicators (KPIs) for this contract, and how will contractor performance be measured and incentivized?
The provided data does not specify the key performance indicators (KPIs) or the performance measurement and incentive structure for this contract. Effective oversight would require clearly defined metrics related to prescription fulfillment rates, drug cost management, beneficiary satisfaction, and adherence to formulary requirements.
Given the short duration, what is the strategy for ensuring long-term stability and cost-effectiveness of TRICARE pharmacy services beyond October 2022?
The 195-day duration suggests this may be a bridge contract or part of a larger procurement strategy. The strategy for long-term stability likely involves a subsequent, potentially longer-term contract award following a competitive process. The agency's plan for re-competition or extension will be critical for sustained service delivery and cost control.
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: $336,695,481
Exercised Options: $336,695,481
Current Obligation: $336,695,481
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: 2022-04-19
Current End Date: 2022-10-31
Potential End Date: 2025-03-19 00:00:00
Last Modified: 2025-08-18
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