The OIG examines individual pharmaceutical proposals submitted by commercial contractors for Federal Supply Schedule contracts that have an anticipated annual value of $5 million or more or that VA has asked the OIG to review. The OIG’s oversight work helps VA contracting officers negotiate fair and reasonable prices for the government and taxpayers. The OIG’s reports on individual proposals are not published because they contain sensitive commercial information protected from release under federal law. To promote transparency, this report summarizes the 14 preaward reports provided to VA contracting officers in FY 2024. The 14 pharmaceutical proposals had a cumulative estimated contract value of approximately $34.4 billion and included 1,361 offered items.
The OIG found that commercial sales practice disclosures were accurate, complete, and current for six proposals. The remaining eight proposals could not be reliably used by VA for negotiations until noted deficiencies were corrected. The OIG also determined that proposed tracking customers for all 97 sampled items were suitable for the purpose of the price reductions clause. Tracking customers are customers that serve as a benchmark for potential price reductions during the life of the contract; if tracking customers receive a price reduction, the government’s price should also be reduced. Contract negotiations for 10 proposals had been completed as of May 6, 2025, and the OIG recommended lower prices than offered for five of the proposals, assisting contracting officers in obtaining approximately $36.8 million in savings for VA over the life of the contracts.
