DoD awards $1.29B for 614K monoclonal antibody doses from Eli Lilly
Contract Overview
Contract Amount: $1,289,400,000 ($1.3B)
Contractor: ELI Lilly and Company
Awarding Agency: Department of Defense
Start Date: 2021-11-01
End Date: 2022-02-15
Contract Duration: 106 days
Daily Burn Rate: $12.2M/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: PURCHASE OF A TOTAL OF 614,000 DOSES OF COMBINATION MONOCLONAL ANTIBODY.
Place of Performance
Location: INDIANAPOLIS, MARION County, INDIANA, 46285
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $1.29 billion to ELI LILLY AND COMPANY for work described as: PURCHASE OF A TOTAL OF 614,000 DOSES OF COMBINATION MONOCLONAL ANTIBODY. Key points: 1. Significant investment in critical pharmaceutical supplies. 2. Single awardee suggests potential for limited competition or specialized product. 3. High value contract warrants scrutiny for cost-effectiveness and market alternatives. 4. Sector: Healthcare/Pharmaceuticals, a high-demand and often high-cost area.
Value Assessment
Rating: good
The contract value of $1.29 billion for 614,000 doses equates to approximately $2,100 per dose. This pricing needs to be benchmarked against similar government and commercial contracts for monoclonal antibody treatments to assess value.
Cost Per Unit: $2,100
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method is generally expected to yield competitive pricing, though the specific nature of combination monoclonal antibodies might limit the number of capable bidders.
Taxpayer Impact: Taxpayers benefit from a competitive bidding process designed to secure the best possible price for essential medical supplies.
Public Impact
Ensures availability of critical medical countermeasures for national health needs. Supports the pharmaceutical manufacturing sector and associated supply chains. Potential for follow-on procurements based on demand and effectiveness.
Waste & Efficiency Indicators
Waste Risk Score: 75 / 10
Warning Flags
- High per-unit cost requires validation against market benchmarks.
- Dependence on a single supplier for a large quantity.
- Short delivery window may impact production capacity and pricing.
Positive Signals
- Awarded under full and open competition.
- Addresses a critical public health need.
- Firm fixed price contract provides cost certainty.
Sector Analysis
This procurement falls within the Pharmaceutical Preparation Manufacturing sector, which is characterized by high R&D costs, stringent regulatory requirements, and significant market demand, especially during public health crises. Benchmarks for similar large-scale drug procurements are essential for cost evaluation.
Small Business Impact
While the primary awardee is Eli Lilly and Company, a large pharmaceutical firm, subcontracts to small businesses for raw materials, logistics, or specialized services may exist within the supply chain. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
The Department of the Army, under the Department of Defense, managed this procurement. Oversight would involve monitoring contract performance, delivery schedules, and adherence to the firm fixed price. Post-award audits could verify cost reasonableness.
Related Government Programs
- Pharmaceutical Preparation Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- High per-unit cost.
- Sole source for a large quantity.
- Short delivery timeline.
- Potential for price escalation in future procurements.
- Dependence on specific manufacturing capabilities.
Tags
pharmaceutical-preparation-manufacturing, department-of-defense, in, delivery-order, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.29 billion to ELI LILLY AND COMPANY. PURCHASE OF A TOTAL OF 614,000 DOSES OF COMBINATION MONOCLONAL ANTIBODY.
Who is the contractor on this award?
The obligated recipient is ELI LILLY AND COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $1.29 billion.
What is the period of performance?
Start: 2021-11-01. End: 2022-02-15.
What is the historical pricing trend for this specific combination monoclonal antibody, and how does this award compare?
Analyzing historical pricing data for this specific combination monoclonal antibody is crucial. This award's per-unit cost of approximately $2,100 needs to be compared against previous government contracts, commercial sales, and competitor pricing. Significant deviations could indicate market shifts, increased production costs, or potential overpricing that warrants further investigation.
What are the specific risks associated with relying on a single supplier for such a large quantity of a critical medical product?
Reliance on a single supplier for a large quantity of a critical medical product presents several risks. These include potential supply chain disruptions due to manufacturing issues, natural disasters, or geopolitical events affecting the sole manufacturer. It also limits leverage in future negotiations and could lead to price increases if demand remains high and alternatives are scarce.
How effectively does this procurement strategy ensure long-term availability and affordability of essential medical countermeasures?
This procurement strategy, while addressing immediate needs, may not guarantee long-term availability and affordability. Full and open competition is positive, but the single award for a large quantity might not incentivize multiple manufacturers to maintain production capacity. Future strategies could involve diversifying suppliers or using longer-term agreements to ensure sustained access at competitive prices.
Industry Classification
NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation Manufacturing
Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1 LILLY CORPORATE CTR, INDIANAPOLIS, IN, 46285
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,289,400,000
Exercised Options: $1,289,400,000
Current Obligation: $1,289,400,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W911QY21D0012
IDV Type: IDC
Timeline
Start Date: 2021-11-01
Current End Date: 2022-02-15
Potential End Date: 2022-12-31 00:00:00
Last Modified: 2022-06-28
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