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Office of Acquisition and Logistics (OAL)


Pharmaceutical Division

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The Department of Veterans Affairs (VA) is slashing costs by standardizing products and sources of supply while, simultaneously, balancing clinician considerations for obtaining quality products.  The National Contract Service (NCS) standardization contracts provide Veterans with high quality continuity of health care and afford concentrated buying power to our federal Government customers.  The NCS Pharmaceutical Division oversees two programs:  the Pharmaceutical Standardization Program and the Pharmaceutical Repackaging Program.

Pharmaceutical Standardization Program

The Pharmaceutical Standardization Program is responsible for support of VA and Other Government Agency pharmaceutical standardization contracts that strive for the best clinical outcomes at leveraged prices.  We work closely with the Veterans Health Administration’s Pharmacy Benefits Management team, the VISN Pharmacy Executives, the Medical Advisory Panel, the Department of Defense Pharmacy Operations Division/Defense Health Agency, and Defense Logistics Agency-Troop Support to coordinate clinical appropriateness with contracting requirements.

Additionally, we competitively negotiate some of NCS’ highest dollar volume contracts.  The indefinite delivery, requirements-type contracts are the most commonly used contracting vehicles.

Ordering Hierarchy Review for Pharmacy

VA Acquisition Regulation Part 808.002 lists the priorities for use of government supply sources.  This hierarchy was initiated, at least in part, by the Procurement Reform Task Force Report of May 2002.  The Pharmaceutical Prime Vendor contract with McKesson (VA797P-12-D-0001), awarded April 11, 2012, added the availability of Wholesale Acquisition Cost (WAC) based generics.  The hierarchy is set-up below to address it in terms of pharmaceutical purchases:

  • National Contract (NAT) - Mandatory (Should always be lowest price available)
  • Federal Supply Schedule Restricted (FSR) price (also sometimes identified as XBP (a synonym for FSR with no specific definition)) - If you see the FSR (or XBP), then your pharmacy is listed for a special negotiated price or temporary price reduction.  Some restricted Blanket Purchase Agreements (BPA) may also be listed as FSR (or XBP).  Most are mandatory, check with Pharmacy Benefits Management (PBM) if unsure.
  • Blanket Purchase Agreement (BPA) - Restricted BPA (Your Veterans Integrated Service Network (VISN) is moving market share to this product…it may not be the lowest price until all of market share is moved, so be sure your pharmacy is not an exception which sometimes happens.)
  • Big4 Prices - Special price for VA, Health and Human Services (HHS), Department of Defense (DoD) and Coast Guard which should always be lower than or equal to Federal Supply Schedule (FSS) for other agencies.  (Brand drugs are considered different from like generics, so a brand with a Big4 price is before the generic only if it has a lower price.)
  • FSS prices - When buying a generic drug, Big4 and FSS have equal hierarchy and you look at price.
  • Open Market or WAC Priced Generic/WAC Based Generics (WPG or WBG) - WPG or WBG is not part of the original established hierarchy.  It came about with the latest McKesson contract.  It makes it easier to buy non-FSS items but should always be compared to open market, since there may be major prices differences.  You may have local requirements to use WPG or WBG over credit card open market, but it is not part of the ordering hierarchy.

Pharmaceutical Standardization Program points of contact:

Pharmaceutical Repackaging Program

The Pharmaceutical Repackaging Program requires a contractor to serve as a unit-of-use re-packager and distributor for generic pharmaceuticals needed by the VA healthcare facilities.  Under the program, NCS purchases the bulk pharmaceuticals (e.g., in bottles of 1,000 or greater), utilizing the established Blanket Purchase Agreements, and arranges for delivery of such products to the contractor for processing into unit of use package sizes (e.g., 30s, 60s, 90s).  Once product is repackaged, the contractor warehouses the government-owned pharmaceuticals until such time orders are placed by the VA facilities.

Currently, there are a number of drugs in various strengths and package sizes included in the Pharmaceutical Repackaging Program.  View the specific ordering procedures and the products available for purchase under the Pharmaceutical Repackaging Program.

Pharmaceutical Repackaging Program points of contact: