TRICARE Pharmacy Services Contract Awarded to Express Scripts Inc. for $120.18 Million
Contract Overview
Contract Amount: $120,177,230 ($120.2M)
Contractor: Express Scripts Inc
Awarding Agency: Department of Defense
Start Date: 2022-10-26
End Date: 2022-12-31
Contract Duration: 66 days
Daily Burn Rate: $1.8M/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 $120.2 million to EXPRESS SCRIPTS INC for work described as: TRICARE PHARMACY SERVICES Key points: 1. Significant contract value of over $120 million for pharmacy services. 2. Express Scripts Inc. is a major player in the health insurance carrier sector. 3. Potential risk associated with reliance on a single large contractor. 4. Spending falls within the Direct Health and Medical Insurance Carriers sector.
Value Assessment
Rating: good
The contract value of $120.18 million for TRICARE pharmacy services appears reasonable given the scope. Benchmarking against similar large-scale government pharmacy 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 robust price discovery process. This method typically leads to more competitive pricing for the government.
Taxpayer Impact: Full and open competition likely resulted in favorable pricing, maximizing taxpayer value for essential pharmacy services.
Public Impact
Ensures access to prescription medications for military personnel and their families. Supports the health and readiness of the armed forces. Impacts the pharmaceutical supply chain and drug pricing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Contract duration is relatively short (66 days), potentially leading to frequent re-competition costs.
- No specific small business participation noted.
Positive Signals
- Awarded under full and open competition.
- Significant contract value indicates a critical service being provided.
Sector Analysis
This contract falls under the Direct Health and Medical Insurance Carriers sector, which involves providing health insurance and medical care services. Spending benchmarks for this sector are highly variable based on the specific services offered.
Small Business Impact
The provided data does not indicate any specific set-aside for small businesses. Further analysis would be needed to determine if small businesses had an opportunity to participate in this contract.
Oversight & Accountability
The Department of Defense, through the Defense Health Agency, is responsible for overseeing this contract. Standard oversight mechanisms for large contracts should be in place to ensure performance and accountability.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- Short contract duration may lead to inefficiencies.
- Lack of small business participation noted.
- Reliance on a single large provider.
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 $120.2 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 $120.2 million.
What is the period of performance?
Start: 2022-10-26. End: 2022-12-31.
What is the cost-effectiveness of Express Scripts Inc. in managing TRICARE pharmacy benefits compared to alternative providers?
Assessing cost-effectiveness requires a detailed analysis of per-unit drug costs, administrative fees, and overall program efficiency. Comparing Express Scripts' performance metrics against industry benchmarks and potentially other large pharmacy benefit managers would reveal if the government is receiving optimal value. Factors like formulary management and negotiation power play crucial roles in determining true cost-effectiveness.
What are the potential risks associated with a short-term contract for essential pharmacy services?
Short-term contracts, like this 66-day delivery order, can lead to increased administrative burden and costs associated with frequent re-procurement. There's also a risk of service disruption or a decline in quality if a new contractor is not seamlessly transitioned. Furthermore, it may limit the contractor's incentive to invest in long-term service improvements.
How does this contract contribute to the overall effectiveness of the TRICARE program?
This contract is crucial for the effective operation of the TRICARE program by ensuring beneficiaries have access to necessary medications. Efficient pharmacy services contribute to patient health outcomes, military readiness, and overall satisfaction with the healthcare system. The reliability and scope of services provided by Express Scripts directly impact the program's ability to meet its healthcare obligations.
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: $120,177,230
Exercised Options: $120,177,230
Current Obligation: $120,177,230
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: 2022-10-26
Current End Date: 2022-12-31
Potential End Date: 2025-03-20 00:00:00
Last Modified: 2025-08-19
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