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Federal Bureau of Prisons - Is it an Opportunity?

Pharmaceutical manufactures approved under an NDA or BLA pathway are subject to statutory requirements that include contracting and price concessions to certain large Federal buyers, with statutory pricing concessions required for the largest four (4) Federal pharmaceutical buying agencies. There are also a number of lower volume Federal pharmaceutical buyers who cab access the same contracting vehicle, but are not entitled to mandatory statutory pricing discounts and instead pay a price negotiated by the Department of Veterans Affairs, who is responsible for establishing these agreements and negotiating the Other Government Agencies (OGA) pricing. One of these is the Federal Bureau of Prisons (FBoP).

Manufacturers often become curious about the scope of potential opportunity. They seek to understand how it differs from state correctional system opportunity and if it’s a business opportunity worth managing and/or pursing.

Our Take?

It depends. It may be worth having a conversation at the national pharmaco HQ, or, at the consortium level, if you have a therapy that treats one of the top prison system disease states. Here are some basics about the FBoP health system to help guide opportunity assessment.

General Structure

  • 122 Federal Prisons (referred to as "institutions")

  • Care setting varies widely by institution and disease state

  • Over 3K health care professionals, including 550 Public Health Service Commissioned Officers who are on details from the Department of Health and Human Services

  • Typical facility medical staffing include a medical director, with PA’s primary providers

  • Community-based specialists contracted on an as-needed basis

  • Each FBoP institution has a pharmacy staffed by pharmacists, pharmacy technicians, and support staff. They handle medication dispensing, counseling, monitoring, and ensure adherence to the formulary.

  • BOP facilities are classified into four levels based on the medical services offered. Level 1 facilities have minimal services, while Level 4 are essentially medical centers. This classification influences the scope of pharmaceutical management available.

  • Medications are typically dispensed in single doses and directly observed by staff to minimize the risk of diversion or tampering.

  • Electronic systems may be used to track medication orders, dispensing, and administration.

  • Inmates who require specialized medications or treatment not covered by the formulary may need to be transferred to a higher-level medical facility.

Top Disease States

The FBoP faces a unique challenge in providing healthcare, as they care for a population with significantly higher rates of chronic health conditions compared to the general population. The system presents with increased rates of infectious disease, hypertension, asthma, arthritis, mental illness, and substance abuse disorders (mental health management for antipsychotics ranks in the top 10 pharma line items). Several health concerns that stand out as particularly frequent within the FBoP system include:

Mental health

  • Mental health disorders: Depression, anxiety, and post-traumatic stress disorder (PTSD) are among the most common mental health concerns in incarcerated individuals.

  • Suicidal ideation and self-harm: The rate of suicide among incarcerated individuals is significantly higher than the general population. Additionally, self-harm, including cutting and substance abuse, is frequently used as a coping mechanism for mental health struggles.

Chronic health conditions

  • Infectious diseases: The close quarters can lead to the spread of infectious diseases, including tuberculosis, HIV/AIDS, and hepatitis C.

  • Cardiovascular disease: Heart disease, stroke, and other cardiovascular conditions are among the leading causes of death for incarcerated individuals. Likely, this is due to a combination of known risk factors, including poor diet, lack of vigorous exercise, and smoking.

  • Diabetes: Diabetes is also prevalent within the BOP population.

  • Substance abuse: Many incarcerated individuals have a history of substance abuse, and this can lead to a number of health problems, including liver damage.

Specific examples:

  • Hepatitis C medications: A significant increase in Hepatitis C treatment within the BOP has been observed, leading to increased use of antiviral drugs like sofosbuvir and velpatasvir.

  • Addiction treatment medications: Medications like methadone and buprenorphine are used in Medication-Assisted Treatment programs for opioid use disorder.

Pharmaceutical Management

  • FBoP maintains one National Formulary that is regularly reviewed and updated by a committee of healthcare professionals to ensure effectiveness, cost-effectiveness, and security considerations.

  • The FBoP National Formulary is highly centralized and controlled

  • While federal prisons aren't eligible for 340B on their own, they can participate by partnering with a covered entity like a 340B hospital or health center.

  • Most drugs are purchased off of the VA managed Federal Supply Schedules and VA National Contracts


What about state managed prison systems?

  • States do not purchase off of the VA managed Federal Supply Schedules

  • Pharmaceutical manufacturers will typically contract at only select large states or consortium level

  • Spend on pharmaceuticals in state managed prisons systems as a percentage of overall health care budget is highest in New York (32%) and lowest in Texas (7%)

  • Sixteen (16) state-level Department of Corrections access the 340B drug purchasing program through eligible hospitals


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