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Federal Stockpiling Opportunity

Pharmaceutical manufacturers are often interested in capitalizing on opportunity to participate in national stockpiling with the Federal government. There are a variety of programs manufacturers can consider, each with unique business opportunity and varying degrees of risk.

The two primary agencies that issue stockpiling agreements with pharmaceutical manufacturers are the Department of Health and Human Services (DHHS) and the Department of Defense (DoD).


DHHS has a number of offices and programs that are responsible for stockpiling medications and medical supplies, including:


The Office of the Assistant Secretary for Preparedness and Response (ASPR) - ASPR is responsible for coordinating the government's preparedness and response to public health emergencies. The office manages the Strategic National Stockpile (SNS), which is a cache of critical medical supplies that can be deployed in the event of a disaster.


The Centers for Disease Control and Prevention (CDC) - CDC is responsible for protecting public health by preventing and controlling infectious diseases. The agency has a number of programs that focus on stockpiling medications and medical supplies, including the Influenza Vaccine Stockpile Program and the National Emergency Antiviral Stockpile Program.


The Biomedical Advanced Research and Development Authority (BARDA) - BARDA that is responsible for developing and procuring medical countermeasures against biological, chemical, radiological, and nuclear threats.


DoD is responsible for protecting the national security via stockpiling programs, including:


The Defense Medical Logistics Center (DMLC) - The DMLC is responsible for the procurement and distribution of medical supplies for the DoD. The center manages a number of stockpiles of medications and medical supplies, including the War Reserve Materiel (WRM) and the Joint Medical Materiel Readiness Activity (JMRA).


The Defense Threat Reduction Agency (DTRA) - The DTRA is responsible for countering weapons of mass destruction. The agency has a number of programs that focus on stockpiling medications and medical supplies, including the Medical Countermeasures Program and the Chemical and Biological Weapons Defense Program.

​One of the most common DoD stockpiling mechanisms pursed by pharmaceutical manufacturers in the Corporate Exigency Contract (CEC). A CEC agreement is a contingency contract used by the Defense Logistics Agency (DLA) to ensure that pharmaceutical manufacturers have the capacity to meet the needs of the DoD during a national emergency. CECs are a type of "guaranteed access" contract, which means that the government pays the manufacturer a fixed fee in exchange for the right to purchase a certain amount of product in the event of a contingency. Manufacturers are required to maintain certain inventory levels of contracted product and notify the government if inventory levels fall below an agreed upon contracted threshold.

Stockpiling agreements are often awarded to pharmaceutical manufacturers with dependable commercial practices, including the ability to scale production. Benefits of stockpiling agreements for pharmaceutical manufacturers include increased sales, access to government funding and improved public image. Challenges include cost, compliance requirements and risk of inventory waste – in some instances.

 

Real-world examples of pharmaceutical manufacturers partnering with the Federal government to protect national interests include:


  • In 2017, HHS issued a stockpiling agreement with Gilead Sciences for the antiviral drug letermovir, used to prevent infection in transplant patients

  • In 2018, DHS issued a stockpiling agreement with Merck for the antibiotic doripenem used to treat a variety of bacterial infections, including pneumonia, skin infections, and intra-abdominal infections

  • In 2019, HHS issued a stockpiling agreement with GlaxoSmithKline (GSK) for the antibiotic amoxicillin

  • In 2020, DHS issued a stockpiling agreement with Pfizer for the antiviral drug remdesivir

  • In 2021, DOD issued a stockpiling agreement with Sanofi for the anthrax vaccine

  • In 2022, DOD issued a stockpiling agreement with Moderna for the mRNA COVID-19 vaccine

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